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western iowa,by Denison | I would cash 1/3rd of the money you need-do 1/2 your tiling job this year-figure out how the taxs come out year 2016-as you pay 2015 tax"s
Things work out better then planned cash another 1/3 of the money needed -do the other 1/2 of the tiling-repeat year 2-
now you have made it to year 3-things going ok-you have 20,000 out of 401k-your tile cost $30,000-you will know what to do-but you have done tiling in 2 years-with only 2/3rds of the money you took out of 401k-about year 3-to year 5 you start seeing some real benfits from the tile-you have spread your risk 3 fold-you have tiled-you have sold some 401k-and the peneltys will probably be offset with tile-plus year 2 you might be taxed harder-so you probably can offset income with a 179 deduction
Tile is a great return if needed-401k is a piece of paper that you can convert to a longer term goal-doing it over 3 years gives you more flexability
Your longterm goal probably as a farmer is to own ground not paper-gathering that paper with less tax is the goal so that you can invest that money where it returns more to yourself-I have money invested that will never return 1% the stuff that returns 7% doesnt mean as much-I wouldnt take a loan out against the 401k-not worth the hassele
the naysayers say leave it alone-gosh why do we have it if you never touch it-doing step by step you are not 100% rite or wrong-know one knows where the market can go-
I have stock,and ground-some of my best money spent is on things that look hard for a return
not being stuck in a field because I tiled was always worth more to me then a return at my 401k-getting it out of there is what bites-hint-so much at a time-less tax -offset with expenditure on tile!
Good Luck Grain trader-your post has had me thinkin a couple of days-It is a very good question with not very many good answers-hopefully you will read my post-I usually tile tell it hurts-finiancelly-same as pouring concrete! | |
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finance/Ag loan question/scenario - 401K loan to pay for tile
