The Intersection of FIRE and Disney

[platamama]

Help me with your thought process on this, as I have struggled with the balance between good debt and bad debt. I've got the cash on hand to pay outright for a car, but it would severely deplete my savings. Instead, I try to make a decent down payment (on a credit card, of course), and then finance the remainder at a low interest rate to keep my savings intact in the event of an emergency. But, it's not just cars, as I think about extra payments against the mortgage and retirement savings. I don't want a chunk of money hanging around earning 1% interest, but I love the peace of mind of knowing that it is there if absolutely needed. Would love to hear how others deal with savings versus debt.

I would keep money in an emergency account. You can get 2.1% or better at Discover or Ally. You can't get your money out of a car if you need it in an emergency. I don't look at mortgage and retirement savings as the same kind of debt as a car loan. There are ways to access your money in your home equity and retirement accounts (though there would be early withdrawal penalties) but no way of doing that with a car short of selling it, but then life would get much more difficult.

ETA: no way retirement accounts are debt, I miswrote that bit

 

[platamama]

Since we are talking retirement accounts, I would like some input. My wife has a 401 (k) from her previous employer that has been sitting there for years and earning a great return. Her new employer did not begin offering 401 (k) until about a year or so ago. Now her employer has sold the business and the new company again does not offer 401 (k). They have told her she has to move the money out this week (really want her to do in the next couple of days). Can/should I roll over to her existing old employer 401 (k), or could/should she roll to a Vanguard Roth IRA account that she has. Looking for the easiest/quickest and lowest tax implication option. Thanks!

Pretty sure you can't roll over into a prior employer's 401(k). That's usually done the other way around, where you rollover the old employer's 401(k) into the new employer's 401(k), since you need to be currently employed by the employer to contribute to their 401(k). Most of the time, if you have to rollover the 401(k) it goes into a rollover/traditional IRA. That's the simplest/quickest with no tax hit. If you go this route, and are interested in earning a bonus for opening an account at a brokerage, there are several companies that offer cash and/or free trades depending on the balance you transfer to them: TD Ameritrade, Etrade, Merrill Edge off the top of my head. And if you want to stick with Vanguard, it would certainly make it easier to see all her balances with one login.

Are you asking about a Roth conversion for the current 401(k)? Could you take the tax hit on that this year? Otherwise, there's no way to roll the current 401(k) to her Roth IRA, plus she would still need to open a non-deductible IRA first. Here's an interesting read on how someone did that with their Vanguard account. If she already has a traditional IRA that she's contributed to in the past, then this won't work. Plus, if you rollover the 401(k) into a regular IRA then you won't be eligible for this approach in the future...unless somehow you can take the rollover IRA and transfer it back into a 401(k) down the line.

It's a little complicated, and I'm no accountant. Just sharing my own experiences and what I've looked into for myself.

 

[BridgetBordeaux]

Would love to hear how others deal with savings versus debt.

Here are some recent money events and how we handled it...............

--Bought a boat in 2017 and a boat loan was going to be about 6 or 7 percent. We put a large cash down payment and have a short term.
I felt that rate was high at the time

--Bought a new car back in 2014. Rate was 1.75 percent. Put zero down and pushed it out 60 months.
I felt this was a cheap rate at the time

--Refi'd our house a few years ago at 3.5 percent/30 years. I did not pull any cash out. I borrowed the balance of the original loan and simply lowered my payment.
I felt this was a cheap rate

* even after all these events, our emergency fund has always been a decent size. Sometimes I had to put a small dent in it, but it was replenished in 60 days.

When I deal with these issues I ask myself the following question................
What will a CD pay for the next few years? (short term like 1,2,3 years etc)
What kind of investment return is most likely for the long term? (10-30 years)

 

[BamaBoy]

Pretty sure you can't roll over into a prior employer's 401(k). That's usually done the other way around, where you rollover the old employer's 401(k) into the new employer's 401(k), since you need to be currently employed by the employer to contribute to their 401(k). Most of the time, if you have to rollover the 401(k) it goes into a rollover/traditional IRA. That's the simplest/quickest with no tax hit. If you go this route, and are interested in earning a bonus for opening an account at a brokerage, there are several companies that offer cash and/or free trades depending on the balance you transfer to them: TD Ameritrade, Etrade, Merrill Edge off the top of my head. And if you want to stick with Vanguard, it would certainly make it easier to see all her balances with one login.

Are you asking about a Roth conversion for the current 401(k)? Could you take the tax hit on that this year? Otherwise, there's no way to roll the current 401(k) to her Roth IRA, plus she would still need to open a non-deductible IRA first. Here's an interesting read on how someone did that with their Vanguard account. If she already has a traditional IRA that she's contributed to in the past, then this won't work. Plus, if you rollover the 401(k) into a regular IRA then you won't be eligible for this approach in the future...unless somehow you can take the rollover IRA and transfer it back into a 401(k) down the line.

It's a little complicated, and I'm no accountant. Just sharing my own experiences and what I've looked into for myself.

If I am understanding correctly, it seems that I don't have any options without taking a tax hit. I can't keep it where it is, I can't rollover to the old 401(k), can't rollover to her Roth IRA without a tax hit, and she has a previous traditional IRA so no backdoor Roth. Sounds like my only option is to rollover to the Roth and just take the tax hit correct? Thanks for all of the good information.

 

[FairestOfThemAll37]

Have we had a car buying discussion? I don't think I remember seeing one, but it's a decently long thread.

I was wondering what everyone's thoughts are on how you buy cars. Do you buy new or used? Do you pay cash, charge as much as possible to a credit card for churning, or finance at a low rate because you can earn more on your investments than you would be paying in interest? Thoughts?

Most FI/RE resources say that a car isn’t even a true necessity and to never buy new and basically drive it until the wheels fall off.

I don’t roll this way due to several reasons:

1) I’m a car person. It’s not about an image or keeping up with the Joneses. I love cars. I specifically love sporty touring cars that have some oomph but are a little too chubby (because of the comforts) to be a true track car. I don’t have a project car (yet), but having a car that I appreciate really adds to my happiness and enjoyment of life. As a suburban dweller, I spend a lot of time in my car. Not everything for me is a purely financial decision.

2) I really like having a car in warranty. I live alone so how difficult it is to fix minor repairs is a concern. I don’t have access to another car unless I bum rides off friends. When under warranty, I get a loaner from the dealership and don’t have to worry about finding a ride. It’s also a consideration for getting a new car before things start to go wrong. I’m not saying it’s ever easy to have car problems, but it takes the edge off when you can call your spouse to pick you up or x,y,z because your car won’t start.

3) Technology and safety seems to have major improvements in cars (and brands tend to have similar cycles) every 5-7 years.

I have so far bought a new car around every 7 years. I’ve paid cash (put as much as the dealer would let me for CC points) unless they were offering 0% financing. For me leasing would actually make sense because ideally I’d get a new car every 2-3 years, but there is some comfort in owning a paid off car. Even though it’s a quickly depreciating asset, it gives me some options if things were to go pear shaped financially. I’d still have access to transportation without a monthly payment and could always downgrade if things got dire.

 

[platamama]

If I am understanding correctly, it seems that I don't have any options without taking a tax hit. I can't keep it where it is, I can't rollover to the old 401(k), can't rollover to her Roth IRA without a tax hit, and she has a previous traditional IRA so no backdoor Roth. Sounds like my only option is to rollover to the Roth and just take the tax hit correct? Thanks for all of the good information.

No, just roll it over into her previous traditional IRA. Then there's no tax hit. Preferably you do this directly, rather than indirectly where you receive a check from the 401(k) that you have to turn around and deposit within a certain timeframe into the IRA. Less messy if done directly.

Most of the time, if you have to rollover the 401(k) it goes into a rollover/traditional IRA. That's the simplest/quickest with no tax hit. If you go this route, and are interested in earning a bonus for opening an account at a brokerage, there are several companies that offer cash and/or free trades depending on the balance you transfer to them: TD Ameritrade, Etrade, Merrill Edge off the top of my head. And if you want to stick with Vanguard, it would certainly make it easier to see all her balances with one login.

​

 

[castoral]

Joining here! I saw this thread but then forgot to see what it was all about. We’ve been “officially” working towards FIRE for about 18 months after finding the podcast ChoseFI. We’ve unofficially been doing it since we were about 16. After about our 3rd date my now husband looked at me and said...”you know, if we keep eating out, we’ll never be able to buy a house.” Haha! DH had a lawn business and at 19 we bought our first house ($87k with $44,000 down). We made triple payments and collected cans at my college to remodel it (no joke, new roof, new windows, finished the basement). We made triple payments which equaled a typical $900/mo rent in the area. Then we moved on up, had 4 kids. Kept Savings as high as we could. About had the house paid off and bought our dream home in the country. 2012 we started getting into rental properties. We currently have one paid off profiting about $800/mo and rehabbing another (our 7th since 2012). We’ll have about $105k in it and it’ll be worth about $180k, profiting $1200/mo in rent. DH and I both work part time (federal gov’t and UPS) and will both retire with pensions. DH can retire in 5 yrs at age 40. I’ll have to be super part time to 57 to keep health care. Plan is to have 4 rentals by age 40 (4.5 yrs) producing $3500/mo profit, DH can retire by then with $1800/mo pension and I’ll work 2.5 days.

Savings rate is honestly kind of annoying for me because there is so many variables. We track net worth on a yearly basis. 2018 was actually my first year budgeting and keeping track to the penny. It was a big spending year with a $35,000 remodel after a kitchen/basement flood among other big home repairs. 2019 were buying a $30k+ boat which is STUPID but something we love and our kids LOVE! We’re waiting for the next downturn to buy vacation rentals.

That’s pretty much is in a nutshell....happy to find a group working towards the same goals!

 

[alryan]

Joining here! I saw this thread but then forgot to see what it was all about. We’ve been “officially” working towards FIRE for about 18 months after finding the podcast ChoseFI. We’ve unofficially been doing it since we were about 16. After about our 3rd date my now husband looked at me and said...”you know, if we keep eating out, we’ll never be able to buy a house.” Haha! DH had a lawn business and at 19 we bought our first house ($87k with $44,000 down). We made triple payments and collected cans at my college to remodel it (no joke, new roof, new windows, finished the basement). We made triple payments which equaled a typical $900/mo rent in the area. Then we moved on up, had 4 kids. Kept Savings as high as we could. About had the house paid off and bought our dream home in the country. 2012 we started getting into rental properties. We currently have one paid off profiting about $800/mo and rehabbing another (our 7th since 2012). We’ll have about $105k in it and it’ll be worth about $180k, profiting $1200/mo in rent. DH and I both work part time (federal gov’t and UPS) and will both retire with pensions. DH can retire in 5 yrs at age 40. I’ll have to be super part time to 57 to keep health care. Plan is to have 4 rentals by age 40 (4.5 yrs) producing $3500/mo profit, DH can retire by then with $1800/mo pension and I’ll work 2.5 days.

Savings rate is honestly kind of annoying for me because there is so many variables. We track net worth on a yearly basis. 2018 was actually my first year budgeting and keeping track to the penny. It was a big spending year with a $35,000 remodel after a kitchen/basement flood among other big home repairs. 2019 were buying a $30k+ boat which is STUPID but something we love and our kids LOVE! We’re waiting for the next downturn to buy vacation rentals.

That’s pretty much is in a nutshell....happy to find a group working towards the same goals!

Love your story!! I think a common theme to all those who have or will achieve FIRE is the willingness to do things that many others are not. Stop going out to eat to save for a house? Collecting aluminum cans? Paying triple house payments?? Crazy... but now you are in a position to buy a 30k boat, all while working part time and saving. For most people in their 30s that would probably be a horrible financial decision, but I doubt for you....Enjoy it!!

 

[alryan]

Have we had a car buying discussion? I don't think I remember seeing one, but it's a decently long thread.

I was wondering what everyone's thoughts are on how you buy cars. Do you buy new or used? Do you pay cash, charge as much as possible to a credit card for churning, or finance at a low rate because you can earn more on your investments than you would be paying in interest? Thoughts?

Good discussion here. There has already been a few different takes on what works for everyone. Different strategies work for different people. I am in the buy a few years old car and drive until it dies camp, but I don’t really care about cars. I just read an article in the paper that the average car payment is now $561 for 69 months, which just seems crazy to me. For the average middle class family it would be very hard to save money and build wealth with those kind of payments.

 

[SouthFayetteFan]

Good discussion here. There has already been a few different takes on what works for everyone. Different strategies work for different people. I am in the buy a few years old car and drive until it dies camp, but I don’t really care about cars. I just read an article in the paper that the average car payment is now $561 for 69 months, which just seems crazy to me. For the average middle class family it would be very hard to save money and build wealth with those kind of payments.

And yet many are unwilling to ask themselves the tough questions...does having that car bring you $20 of happiness each and every day?? OR What could you do with an additional $7,000 each year??

 

[alryan]

And yet many are unwilling to ask themselves the tough questions...does having that car bring you $20 of happiness each and every day?? OR What could you do with an additional $7,000 each year??

Yes, and even if you decide you do get that much happiness from it, something else will probably have to give. Whether that’s eating out, house size, vacations, etc.

It’s kind of like me and my house upgrades. Talking about our tax refund and my DH will ask, "Well, are you finally going to get your hard wood floors?" I think about for a little while, but then always come back to, "Nah, maybe next year." Because in reality I know that for me I would rather spend our extra money on another vacation with the family!

 

[1st*toright]

And yet many are unwilling to ask themselves the tough questions...does having that car bring you $20 of happiness each and every day?? OR What could you do with an additional $7,000 each year??

Yes, and even if you decide you do get that much happiness from it, something else will probably have to give. Whether that’s eating out, house size, vacations, etc.

It’s kind of like me and my house upgrades. Talking about our tax refund and my DH will ask, "Well, are you finally going to get your hard wood floors?" I think about for a little while, but then always come back to, "Nah, maybe next year." Because in reality I know that for me I would rather spend our extra money on another vacation with the family!

The thing is, I really like knowing I COULD do the frivolous thing and buy something silly (not that hardwood floors are silly, but a fancy car might be). I fell in love with a painting we saw in a gallery - it was like $4k, and it was wonderful. I knew I could buy it if I wanted to, and thinking about it made me happy. And then I didn't buy it - the opportunity cost of owning that painting was in now way worth it. On the other hand, I have been known to blow money (or credit card points) staying at swanky hotels that are ridiculously expensive. Yes, a Fairfield Inn is totally fine, and we stay in them happily, but I don't feel bad about spending silly money to stay in a penthouse suite at the Bellagio - the experience was worth it (it was only 1 night, and it was a slow time of year, and I got a great rate - but it was still silly!)

@castoral - that's where the $30k boat comes in. Or the DVC contract. Or whatever. Having the resources to make those silly purchases that enrich your life is a nice counterpoint to the satisfaction of making sensible financial choices most of the time! I'm always interested to hear about how other people approach this stuff!

 

[castoral]

The thing is, I really like knowing I COULD do the frivolous thing and buy something silly (not that hardwood floors are silly, but a fancy car might be). I fell in love with a painting we saw in a gallery - it was like $4k, and it was wonderful. I knew I could buy it if I wanted to, and thinking about it made me happy. And then I didn't buy it - the opportunity cost of owning that painting was in now way worth it. On the other hand, I have been known to blow money (or credit card points) staying at swanky hotels that are ridiculously expensive. Yes, a Fairfield Inn is totally fine, and we stay in them happily, but I don't feel bad about spending silly money to stay in a penthouse suite at the Bellagio - the experience was worth it (it was only 1 night, and it was a slow time of year, and I got a great rate - but it was still silly!)

@castoral - that's where the $30k boat comes in. Or the DVC contract. Or whatever. Having the resources to make those silly purchases that enrich your life is a nice counterpoint to the satisfaction of making sensible financial choices most of the time! I'm always interested to hear about how other people approach this stuff!

Yes, 100%! Years ago we started with a camper. Frivolous purchase BUT we always did it smart. Found someone desperate to sell, bought about $1500 under value and sold for about $1,000 more. Used it FREE. Same with the next camper, bought it for $6500. Used it 2 years, just sold it last month for $8450. Our first boat we purchased 3 yrs ago. Honestly, some of our best memories the last 4 years have been boating. We just LOVE it. We bought the first "starter boat" for $7k. But family of 6 was pushing it as it was, kids kept getting bigger and wanted to bring friends. So now looking at something you can surf with and holds 12. Not a lot of options. Would be buy new for $110k? NOOOO! Can we find one a family cared for and wants to pass along to another good family.....yes. We're patient and we'll wait for it. We won't take a loan on it and actually we HOPE to keep this one through the years.

 

[castoral]

Have we had a car buying discussion? I don't think I remember seeing one, but it's a decently long thread.

I was wondering what everyone's thoughts are on how you buy cars. Do you buy new or used? Do you pay cash, charge as much as possible to a credit card for churning, or finance at a low rate because you can earn more on your investments than you would be paying in interest? Thoughts?

Lol, again, my stories.....the first summer my husband and I dated, I was a lifeguard at a pool. He came to pick me up for a date and was late. I finally look way across the parking lot and see his truck (into the neighborhood). I start walking and realize there was an old Toyota Truck for sale. $500 with like 250,000 miles on it (4x4 didn't work) but the kids drove it back and forth from Ohio to Cali all through college and law school and just got his first big job. My husband bought it that night and so began his love for Toyota trucks. He had quite a few through the years.....finding them cheap, selling for more. When we had the first kid in 2007 he had to grow up and get an extended cab that fit a car seat so he got an older Tundra. Then kid 2 and 3 came along.....4 did us in and he had to buy a quad cab. Found a year old F150 for $30k. He had that since 2013.

I got wrapped up in the Jonses for a bit. Got out of college and demanded a grown up car. I went on graduation day and got a loan for a Grand Jeep Cherokee (used but still). The second the warrant went out, problem after problem. My dad bought it from us and hubby told me I had $13,000 to buy a car not a penny more. Found a 2003 Honda Accord. In 2010 we finally needed that 3rd row. The Jonses were getting Suburbans. I wanted one SOOOO bad. I promised to keep it 10 yrs and run it into the ground. We paid $42k cash! Jonses won again.....problem after problem. We kept fixing...and even finding cash deals and buying parts from a junk yard....we put over $8,000 into it! (Rebuilt trans, tires, rear shock issues, etc) Mechanic finally said at 110l miles to drop it QUICK because the engine was going to blow. April 2017 we dropped it off at Carmax on the way home from the mechanic and got a whopping $11,000 (more than they were selling for privately). One of our biggest mistakes ever. SOOO....fast forward a few years, we now have a 2014 Honda Pilot (had shipped to us from Miami, FL to save $5k) for $22,000. Paid cash. Sold the F150 and bought a 2002 Excursion for $5,000 (hauls the boat/camper/million kids) and hubby has a $5,000 civic he drives to and from work. People have legit made comments about WHY we'd want old cars. We just laugh. The solution actually works perfect for our needs. The kids HATE the Pilot though lol. We leave for a 14 hr road trip in a week and I'm secretly dying inside. 6 people and 10 days worth of luggage. I wont lie and pretend its fun. It's not. But we'll survive and I'll tell the kids to be quite and use their ipads, lol.

 

[castoral]

So, in terms of retirement planning, hubby and I have a constant disagreement.

Our combined income is typically around $105k (this year closer to $140k with capital gains, yuck). With rentals we'll be steady around $120k. Yes, lots of deductions from that and 4 kids credits. I'm a federal employee and put my funds into a TSP, but its basically like a regular 401k. I put 7% in (and they match 4%). I'm good with this because I personally think this is the time when our income will be the highest. DH thinks are income will be higher in retirement so we need to do the Roth TSP (so tax free when it comes out right?) But I just cant see any reason we'd need over $120k a year to live in our retirement years. Granted, we are planning to move to a higher cost of living area (Charelston, SC vs Cincinnati OH) BUT still.....we'll have house paid for, cars paid, likely $4,000/mo rental income by then that we'll use to live off of + 2 pension funds totaling $3,000/mo-ish at a minimum and healthcare paid/covered. (We'll also have about $2.5M in retirement accounts at a minimum). Am I missing something?

 

[1st*toright]

So, in terms of retirement planning, hubby and I have a constant disagreement.

Our combined income is typically around $105k (this year closer to $140k with capital gains, yuck). With rentals we'll be steady around $120k. Yes, lots of deductions from that and 4 kids credits. I'm a federal employee and put my funds into a TSP, but its basically like a regular 401k. I put 7% in (and they match 4%). I'm good with this because I personally think this is the time when our income will be the highest. DH thinks are income will be higher in retirement so we need to do the Roth TSP (so tax free when it comes out right?) But I just cant see any reason we'd need over $120k a year to live in our retirement years. Granted, we are planning to move to a higher cost of living area (Charelston, SC vs Cincinnati OH) BUT still.....we'll have house paid for, cars paid, likely $4,000/mo rental income by then that we'll use to live off of + 2 pension funds totaling $3,000/mo-ish at a minimum and healthcare paid/covered. (We'll also have about $2.5M in retirement accounts at a minimum). Am I missing something?

The only reason I can see that you might want to do a Roth is if you think that the current individual income tax rates are not going to stick around. The personal tax cuts are all temporary and will need to be extended to remain in effect when you retire. The current tax regime looks like it is adding to the deficit (yes, its early days yet, so the long term impact remains to be seen) but I would not be surprised if personal income tax rates go up over the long term - they are historically low at the moment, and I'm not sure it is sustainable. With lots of kid credits and other opportunities to minimize tax today, a Roth might be a good idea.

 

[pillow]

So, in terms of retirement planning, hubby and I have a constant disagreement.

Our combined income is typically around $105k (this year closer to $140k with capital gains, yuck). With rentals we'll be steady around $120k. Yes, lots of deductions from that and 4 kids credits. I'm a federal employee and put my funds into a TSP, but its basically like a regular 401k. I put 7% in (and they match 4%). I'm good with this because I personally think this is the time when our income will be the highest. DH thinks are income will be higher in retirement so we need to do the Roth TSP (so tax free when it comes out right?) But I just cant see any reason we'd need over $120k a year to live in our retirement years. Granted, we are planning to move to a higher cost of living area (Charelston, SC vs Cincinnati OH) BUT still.....we'll have house paid for, cars paid, likely $4,000/mo rental income by then that we'll use to live off of + 2 pension funds totaling $3,000/mo-ish at a minimum and healthcare paid/covered. (We'll also have about $2.5M in retirement accounts at a minimum). Am I missing something?

When you're 70.5, you MUST take the required minimum distribution (RMD) from your retirement accounts. That would be $91K on $2.5 million (assuming you still have that much at age 70.5). Then add in your rental income and pensions. I would actually sit down and run a tax return pretending you're retired (and taking the RMD). See what tax bracket you're in at retirement and compare with today. I'm thinking your DH might be right and funds should go into a Roth, but you'll have to run the numbers. Also note that Roth accounts don't count when figuring the RMD.

 

[punkin]

Good discussion here. There has already been a few different takes on what works for everyone. Different strategies work for different people. I am in the buy a few years old car and drive until it dies camp, but I don’t really care about cars. I just read an article in the paper that the average car payment is now $561 for 69 months, which just seems crazy to me. For the average middle class family it would be very hard to save money and build wealth with those kind of payments.

Average doesn't really count on this thread. LOL. My current car payment for a car I bought new is just over $300 per month for 60 months (almost paid off) at 0.9% interest (that was the financing offer when I bought). A used car, while less expensive would not get me anywhere near these financing terms. Yes, I could have paid cash (I could have paid cash for the new car too), but at .9% I just couldn't. So I agree with you. Everything depends on what works for you.

 

[BridgetBordeaux]

Yes, 100%! Years ago we started with a camper. Frivolous purchase BUT we always did it smart. Found someone desperate to sell, bought about $1500 under value and sold for about $1,000 more. Used it FREE. Same with the next camper, bought it for $6500. Used it 2 years, just sold it last month for $8450. Our first boat we purchased 3 yrs ago. Honestly, some of our best memories the last 4 years have been boating. We just LOVE it. We bought the first "starter boat" for $7k. But family of 6 was pushing it as it was, kids kept getting bigger and wanted to bring friends. So now looking at something you can surf with and holds 12. Not a lot of options. Would be buy new for $110k? NOOOO! Can we find one a family cared for and wants to pass along to another good family.....yes. We're patient and we'll wait for it. We won't take a loan on it and actually we HOPE to keep this one through the years.

Your story is great and I only quoted this one to reply. (your other stories have also been great)
I wanted to pass on to anyone how we were able to save almost 15 percent off a brand new boat.
Once we did a nationwide search, we found a dealer in MI that had what we wanted. They were a high volume dealer with great prices.
We live in GA.
Once we got all the details nailed down, we drove about 525 miles to Indianapolis to get it. They towed it south from MI to Indy.
We had about 1000 mile round trip and one night hotel stay to pay for. We literally saved thousands and felt the effort was worth it.
Where else could we make over $2000 a day for our efforts?
We love boating and will keep it probably longer than our cars.
Disney vacations and boating have provided many great memories over the years.

 

[castoral]

When you're 70.5, you MUST take the required minimum distribution (RMD) from your retirement accounts. That would be $91K on $2.5 million (assuming you still have that much at age 70.5). Then add in your rental income and pensions. I would actually sit down and run a tax return pretending you're retired (and taking the RMD). See what tax bracket you're in at retirement and compare with today. I'm thinking your DH might be right and funds should go into a Roth, but you'll have to run the numbers. Also note that Roth accounts don't count when figuring the RMD.

My work computer is acting funny, but both of you made really valid points I hadn't thought about. Wait till I have to tell him he's right.....ugh. JK.