[buzzy]

Originally Posted by JMEZARIC3

A RV is not an investment.After 5 years your RV is worth a lot less than you paid.A RV is a life style.If you cannot afford the monthly payments without using your retirement funds,don't buy.You can stay many nights at the Holiday Inn for the cost and expense of a RV.
Do not finance the RV for 15 years,the most commonly quoted monthly payment in the RV dealer ads. You will be upside down for 14 years.Payoff the loan in 5 years.
But if you have money in your retirement fund that you will never need.Buy the RV.Don't worry about the kids.

I expect to be upside down when I sell it in 5 - 10 years. That's part of the cost of ownership. I know that some say to never finance a depreciating asset. But, the tax burden of drawing from an IRA changes the situation. Down the road, I'll take something out of the IRA to cover the shortfall, and only pay income taxes on that amount.

[rjm1cc]

I think I would look at financing if you can get a good interest rate. Your tax situation over you life would be important so ask your adviser if it isn't better to let the IRA alone.
Question if you paid taxes on the IRA funds how would this compare to interest on the loan. Would you be better off with a personal loan and taking a little out of your IRA each year to pay off quicker than just monthly payments. Assume you do not have withdraw penalties due to age.

[TexaninVA]

Originally Posted by leftyf

Do like we did when we bought our house. It was the advice from our Financial Adviser and our Accountant. Pay the minimum down payment required then finance the rest. Get your Financial Adviser to automatically withdraw the payment from your IRA every month and direct deposit it into your bank account. Then do a direct payment from your bank account for the motor home. This way, you are only withdrawing a minimum amount every year and it keeps the taxes very low and your money should grow more than enough to cover the payments so you never miss it. Our house is like we got it for free. Hope this helps.

Somehow, when you say you got it for "free," it just seems like that's too good to be true in the real world and that, over time, it will not prove to be the case.

[Villageswimmer]

Originally Posted by buzzy

I expect to be upside down when I sell it in 5 - 10 years. That's part of the cost of ownership. I know that some say to never finance a depreciating asset. But, the tax burden of drawing from an IRA changes the situation. Down the road, I'll take something out of the IRA to cover the shortfall, and only pay income taxes on that amount.

All of these strategies seem to make sense to some degree. I guess it's critical, though, to keep in mind the fact that sooner or later, taxes will need to be paid on the IRA funds--by you or your heirs. I don't know, but depending on individual circumstances, it might be good to withdraw IRA dollars rather than pay loan interest. Possibly a combination of both would be ideal. JMO.

[Villageswimmer]

Forgot to say I think it's cool that you're following your dream. I hope you enjoy your RV a long time!

[jimmy D]

Free who are you kidding?? Not all Ira s grow everyyear back to Free come on now who are your kidding???? Its a good idea but free

[wendyquat]

Originally Posted by jimmy D

Free who are you kidding?? Not all Ira s grow everyyear back to Free come on now who are your kidding???? Its a good idea but free

I'm glad someone else found this odd! I went to bed trying to figure it out! Thought maybe I was missing something!

[2BNTV]

Please keep in mind, no institution will give you a HELO, if you home is on the market for sale!!!

I like the idea of financing, while your money is growing, tax deferred. You can make payments and minimize the effect of having a chunk of money withdrawn, and with tax implications.

I think it is smart to buy a used motor that has a depreciated value, and resell it when you are through with it. This will minimize the monies spent on it, and the money needed to be withdrawn in small amounts, over the payment period.

Almost all parents want to leave their children something. Their children will appreciate the efforts of the parents, to give them, some financial stability.
Never forget, it's your money, to do as you please.

Do whatever is best, that lets you sleep at night, with your decision.

[SantaClaus]

I like the classic formulation regarding inheritance, "Leave your kids enough that the can do anything! but not so much that they can do nothing!" Wish I knew the attribution. Like I said above, unless we live far longer than expected (given current health and family histories) then we will be leaving a little too much for their own good. Even if we linger into our mid- to late-90s then we will be leaving them our home and possessions, which will liquidate to no small sum. Of course, something catastrophic could happen to deplete our funds and all we leave the kids is the junk we couldn't pawn and a fat reverse mortgage!

[2BNTV]

Originally Posted by SantaClaus

I like the classic formulation regarding inheritance, "Leave your kids enough that the can do anything! but not so much that they can do nothing!" Wish I knew the attribution. Like I said above, unless we live far longer than expected (given current health and family histories) then we will be leaving a little too much for their own good. Even if we linger into our mid- to late-90s then we will be leaving them our home and possessions, which will liquidate to no small sum. Of course, something catastrophic could happen to deplete our funds and all we leave the kids is the junk we couldn't pawn and a fat reverse mortgage!

It's all guesswork when it comes to our health.

Went to a reverse mortgage seminar and I came away thinking I could never do that to my son. It just another way to spend more money, and leave your kids less. I'm sure in some cases, it may be a necessary evil.

A friend of mine father is 79, Took out a reverse mortgage for 100K and spent it in two years on stupid stuff. IMHO

He looks good, smells good, and is broke, comes to my mind.

[leftyf]

The reason I say "Free" is because we take $1,000 a month from our conventional IRA to pay the house payment. It is paid bi-weekly to give a shorter payback time. The $12,000 a year we withdraw from our IRA is a minimal amount and our earnings over the past have far out paced this amount. We look at it as we just reduced the earnings on our IRA. We withdraw so little this way that our taxes on this money are usually nothing. Our accountant then tells us how much more we can transfer from our conventional IRA to our Roth IRA before we have to pay any taxes. Talk to your accountant, A good accountant is kind of expensive, but he should be worth it. He is not just there to do your taxes once a year.

[2BNTV]

Originally Posted by leftyf

The reason I say "Free" is because we take $1,000 a month from our conventional IRA to pay the house payment. It is paid bi-weekly to give a shorter payback time. The $12,000 a year we withdraw from our IRA is a minimal amount and our earnings over the past have far out paced this amount. We look at it as we just reduced the earnings on our IRA. We withdraw so little this way that our taxes on this money are usually nothing. Our accountant then tells us how much more we can transfer from our conventional IRA to our Roth IRA before we have to pay any taxes. Talk to your accountant, A good accountant is kind of expensive, but he should be worth it. He is not just there to do your taxes once a year.

Good advice.

BTW - My accountants nickname is lefty.

[SantaClaus]

Totally agree on the reverse mortgage, it should be a last resort. If nothing else the origination fees are ridiculous.

[tcxr750]

Originally Posted by leftyf

I also like my IRA, but as soon as I turned 59 1/2, I began drawing out the max that my accountant could write off and put it in a Roth IRA. That way when I turn 70 1/2, the amount I must draw from my regular IRA is vastly reduced I can withdraw tax free at any time from my Roth IRA. Don't leave all your money in a regular IRA until you turn 70 1/2, the taxes will be much higher.

I have thought of doing a partial rollover from my IRA to a Roth for several years. My Investment Adviser and Accountant both presented arguments against doing a rollover. Using a Fidelity Minimum Required Distribution Calculator, I got a rude awakening. The value of my IRA peaks at age 81, but the RMDs keep getting bigger. I'm assuming a conservative 6% return per year.
Assuming retirement income from Social Security and pensions goes up every year and adding IRA distributions...a higher tax bracket is inevitable.
I would ROTH IRA it all. Oops, I'm 70+!