The Jalopy Journal
Discussion in 'The Hokey Ass Message Board' started by low budget, Oct 27, 2019.
Now go buy some cars
I had to withdraw from mine to keep from losing my house due to wife's medical bills. Not long after that, I quit my job and became self employed, damn government took half of what was left in my 401 for taxes and penalties. I invested what was left into my trucking business. Now, I have no 401k because I never set another one up, but when I close my business I will have some assets to sell, but they won't amount to what that 401k would have. But I'm not complaining, I only have a couple of credit card payments and my semi truck payment, when that is paid I'll be debt free. I can live off of what SS will be no problem, I just won't have a lot of disposable income. It would have been better to have that 401k, but life didn't turn out that way.
I would not advise it but... I did do that once. I think it depends on the situation.
I had the opportunity to buy back my first hot rod and I was already retired. I did a lot of figuring and my house was paid for, no outstanding debts so I went for it. I didn't cash it all out but I sold 4 cars and cashed out enough to buy it back.
It should be a last resort in my opinion. Sure, it was just an old car, but it was something special to me. I would not have done it for just any old car. You can't replace the money if you are already retired and no longer receiving income so its gone for good.
That made me laugh.
Years ago back during the bad times around 2009 or maybe 2010,,,,there was a guy around Mount Juliet that had a light blue coupe,,,maybe a deuce,,,,I’m not sure.
But his personal license plate read. 401K GON.
I got a big kick out of that,,,Lol
i was going to but all i could get with it was a rusted out Yugo with no wheels and a seized engine so i figured id save it for a couple cases of beer and and a pizza instead
I feel bad when I see a car being kept in a garage and rarely driven because they don't want to devalue it, or whatever. It's like owning a pair of shoes that you'll never use. Doesn't make sense to me.
If you want an investment, there are many other ways to use your money that will yield a great return later on.
I use my 401 to purchase lottery tickets then use lottery winning to buy hot rods.............(just kidding).
I wonder what Suze Orman thinks..........nevermind!
I have never used 401K money for anything-let it ride. For cars etc, used OT and extra side money. Now at 76 I have had to take distribution for the last few years-whether I wanted to or not. Spend some and bank the rest. Wife's is still intact until she must draw it at 70 1/2.
Never considered touching it for toys-always found the money elsewhere.
At the drag strip a while back I saw a gasser that had painted on the side "sponsored by 401K". I thought that was pretty cool...……...
I borrowed from my 401K to build an addition to our home. I thought I might as well borrow the money from myself and pay the interest back to myself rather than to a bank. I never regretted that decision. Everybody's situation is different however so look into it with eyes wide open. I'm greedy I guess but I think I'd like to enjoy some of the money I've worked all these years saving rather than have my heirs enjoy it after I'm gone! A quality rod is most likely just as good as money in the bank.
One of my self rules is never borrow money for toys.
I like cars but I'm never going to risk not working for a car. I just turned 58 the other day. Tomorrow I go in and tell work I am retiring within the next 3-4 months.
Back in the '70s I bought a Prudential life policy. Paid on it religiously for about 5-6 years. Heard about a black, Solex glassed, OD equipped '52 Plymouth Club Coupe for sale for $400 … called insurance agent to ask how much my life policy had accumulated. It was $425 …..
I live a pretty good life, home etc. paid for but still need a ace in the hole, thats why I would also need to look at it as an investment, I suppose having the money there (cash is king in an emergency) would be the wisest,safest decision but it sure would be nice to have the cake and eat it too
I have a 457 retirement account (similar to a 401K but a few special perks for Gov't employees). I recently made $20,000 in a quarter year and decided it was "found" money. My time is limited so I was going to pull some out to buy a car I wanted. The wife stomped on that idea but did let me take some out of savings to do what I wanted to.
I doubt I would pull a big percentage out of my retirement account but I have a good setup in place. I get a pension that has nothing to do with my 457. She has a pension she can start any time she wants. My pension will go to her when I'm gone and it will be exactly what we are getting now, plus she's still employed so that's our insurance. Things kind of just fell in place at the right time. I wouldn't pull money for a car if I had to depend on my 457 money for the rest of my life.
If you lived through the crash of 2008, you would find other ways to invest or double your money than a 401K or IRA. I have bought and sold for years making 2-3 times what I paid / invested. There are other options if you are willing to do the work. If you want to give your money to a banker who got a gold parachute in 2008 - then that's your problem
Obviously........a wife (4 letter word) was not involved in his decision.
Its true......most/some classic cars INCREASE in value were you DD Honda(or whatever) goes DOWN in value but........I doubt the inventor of 401K's intended it for buying hot rods!
I did It to buy my 53 Dodge....
I could have taken out a personal loan or a Equity Loan on my house,For me it was the most
economical & quickest loan ... filled out the paper work and had the money in 2 days .
I would not have done it to buy a car that depreciates ... Classic Cars go up in value (IF) you take care of them & I have it insured for what I owe on it in case something happens to it .
If you do decide to by a car. Make sure it is a really nice car. Don't lose your money on a questionable car. I had the same idea and lost money when the car was not what I thought it was.
Years before the 401K was ever dreamed up, my wife and I set up a "retirement account" We put money into that thing for several years, and it was starting to grow pretty fast. Then I got the brilliant idea to start a business. Over the course of about 2 years, we pulled about 25% of the value of that retirement account out (no tax penalty at that time). We had every intention of paying it back. The withdraw of the money from that account pretty much stopped its growth. Even after we put about 1/2 of what we took out back into it, it never really took off again. That was when we discovered the time value of an investment. When you loose time for an investment to work, the value seldom reaches anywhere near what it would have had the money not been taken out. For what it was worth, I retired from the business last year, it was a good investment.
As a whole, cars should never be thought of as an investment. With the way things are currently going, if the fools in charge manage to wipe out gas as we know it, any auto investment better have been for rare artistically done rides, they may retain some value.
Now to be fair, had you had a pile of money in an account just before 2008 and took out 40K, after the crash, you probably would have been better off, at least you had some fun with the money you would have lost. Gene
Wife and I are both at the age that we have to take mandatory withdrawals. We live well and the tax man loves us. I always resisted withdrawing when I worked but it did cross my mind. I was always putting the maximum allowed into mine each year. I was even limited to contributing less than the maximum allowed because I was considered highly compensated.
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I pulled out of mine to buy a home. Which I still haven’t moved into yet. But I did pull a little extra out and maybe used that down at the speed shop. I do plan on borrowing from it again to buy a 32 coupe, or 67-69 camaro.
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The fools are those that pulled their money out of their 401k after the 2008 crash but didn’t really have to. The market fully recovered, and then some.
I retired almost 11 years ago, but didn’t touch the 401k until a month ago, when I used a little to buy a winter house in Az. With 3% mortgage rates, the minimum withdrawal will cleanly cover the mortgage when I have to begin the withdrawal, meanwhile, it’s still growing.
I wouldn’t finance a car, or any other toy with 401k money.
I also wouldn’t want to have to live on SS alone. It’s a fine supplement, but living like a pauper in retirement was never a life goal for me.
Never pulled money from a 401 account. The coupe was built years ago, I sold a bike to help build it, also did a lot of side mechanic work to help build it. When I built the convertible I borrowed money to buy the car, worked a second job, and did my side mechanic jobs to build the car
I’m old enough now that I have to take some out every year. Problem is I don’t have any more room left to buy more.
Never unless you can "afford" to lose the money...It's all fine until out of nowhere you have a life threatening disease that despite health insurance can cost quite a bit out of pocket...Choose wisely, dead men don't have use for hot rods..
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