Thoughts on 'the market' and retirement fund, election, etc.?

[tRidiot]

So I'm a bit skeptical about the immediate future. Obviously, we've nearly rebounded to where we were early this year in terms of the general market (26k-27k), although my funds are still 3-5% down.

But with adding $4T (and soon another $1T+) in printed money to the market as well as a 32%+ decline in the economy, etc., I expect inflation is going to hit us at some point, regardless of if they raise interest rates, etc.

So with the CARES Act, there is access for people with withdraw up to $100k from their 401k funds to do things they need to do. I've considered doing this to pay off some debt, you can take this out without penalty, and have several years to try to repay it. Taxes can also be spread out over several years if you don't put it all back in.

So some would say it is shortsighted. I get that. But if the market isn't likely to rise and stay up for several years, and you're paying interest say on business loans, then this might be a strategy, then take that money you would normally be paying in payments and put it back in.

So it's a thought. Any discussion?

 

[Shadowrider]

Well it's always a good idea to pay off debt. If Biden does somehow pull off a win I think you are going to be glad to be rid of it for the basic reasoning you state and you won't have that ball and chain to drag while you are fighting to get by when things do go south.

Of course you got to weigh out the other side too. Can you replace it in a workable time frame for your financial condition and goals?

 

[tRidiot]

Well it's always a good idea to pay off debt. If Biden does somehow pull off a win I think you are going to be glad to be rid of it for the basic reasoning you state and you won't have that ball and chain to drag while you are fighting to get by when things do go south.

Of course you got to weigh out the other side too. Can you replace it in a workable time frame for your financial condition and goals?

That's part of the problem, even not figuring in lost interest in the market (potential), saved interest on a loan, having to pay taxes on that amount if you don't put it ALL back in over the three year allowable timeframe (I think), I'm afraid it might come out a wash for me.

 

[John6185]

Take it out, pay off the debts and later pay it back with inflated dollars. Right now the debt is killing you and if it were paid off you could breath easier and sleep better.

 

[Glocktogo]

It really depends on the interest rates and tax advantages (if any) you currently have. If you pay stuff off, the question then becomes what you do with the extra available income? If you're gonna either put it right back into the retirement fund or throw money at investments if they suddenly become lucrative, good. If not, probably bad?

Compound interest is hard to beat. Just sayin...

 

[tRidiot]

Take it out, pay off the debts and later pay it back with inflated dollars. Right now the debt is killing you and if it were paid off you could breath easier and sleep better.

Wouldn't even be close to ALL my debt. It would be one loan - either a business loan or my mortgage. But the other would still remain, along with a ton of student loan debt.

 

[Shadowrider]

In that case I'd probably just look at how my investments were structured and try to make sure they can yield more than the interest you are paying.

 

[tRidiot]

I don't know this is what I need to do... I'm just exploring options, and I'm NOT very hot on the idea of drawing out of my retirement. I went something like 38 years with ZERO, retirement, and just was able to start contributing, so now I've been maxing it out since then, but obviously, at 45, I am way way behind where I need to be to be prepared for the future - IF I even live long enough to retire.

 

[crrcboatz]

It really depends on the interest rates and tax advantages (if any) you currently have. If you pay stuff off, the question then becomes what you do with the extra available income? If you're gonna either put it right back into the retirement fund or throw money at investments if they suddenly become lucrative, good. If not, probably bad?

Compound interest is hard to beat. Just sayin...

Roth IRA ????

 

[crrcboatz]

Just sat down with 2 friends in their late 60s. Both feel they must get out of the stock marker BEFORE the election. Since there would a short time before the end of the year after the election they could get back in if Trump wins or run like **** if Biden won I don’t know if that’s sound strategy or not but they are not going to take any chances