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    paying off or selling my car?

    I have a 2009 vehicle with 35,000 miles on it. My loan payment is 317.65 with interest at 2.99% balance due is 11,938.44. The insurance is 556.00 every 6 months. Blue book is 20,000.00.

    My income is 69,700.00, home mortgage is 113,401.00 payment 1015.57, interest 3.125%. Property tax 2100.00 annually

    My credit card is used for household utilities and some misc. and is usually under $400 paid off each month.

    I deposit everything into a checking account paying 3%

    I have started a new job and do not contribute to the 403 B because there is no match until after one year, I will probably start to contribute but not sure how much to contribute.

    Had planned on retiring at 62 but now 60 I don't see that I can retire for 10 years because I have very little in past 401 K's I missed out on a pension early on in my career as I left a job short of the 10 years required for vesting. The other 29 years I invested the minimum but lost a lot in 2008. The financial planners I have had said because I don't take risks I can't make any money. My emergency fund is $7500.00. I have a couple other savings accounts worth $1000.00

    I feel that I cannot afford this vehicle but they have a history of lasting a long time but gas mileage is average maybe 23 mpg. and when I have listed it for sale have had no offers.

    Any suggestions would be appreciated.

    #2
    Is $69,700 your gross or your net? If it's your gross, net is probably about 50K or about $4,150/month. Rule of thumb on car loans is not to exceed 10% of take home so the $318 payment is affordable by that measure.

    I'm wondering how you have a 5-year-old car with only 35,000 miles and you still owe 12K on it.

    How much is it worth? You say you've tried to sell it without success. That tells me you're asking too much (or not advertising in the right places).

    I think a much bigger problem than the car is the retirement planning considering you are 60 years old. How much do you currently have in retirement plans and any other investment accounts?
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

    Comment


      #3
      Originally posted by schneidl View Post
      I have started a new job and do not contribute to the 403 B because there is no match until after one year, I will probably start to contribute but not sure how much to contribute.

      Had planned on retiring at 62 but now 60 I don't see that I can retire for 10 years because I have very little in past 401 K's I missed out on a pension early on in my career as I left a job short of the 10 years required for vesting. The other 29 years I invested the minimum but lost a lot in 2008.

      You should probably contribute the maximum, $17,500.00 to your 403b, especially since you are behind in retirement savings.

      And lower the asking price on the car. What are similar vehicles going for?

      Comment


        #4
        should I sell or keep the car

        The 2009 IS 250 Lexus loaded I purchased had 18,000 miles on it, I only drove 24 miles round trip to work, but more recently changed jobs and drive 40 and have done more weekend travel to visit my new grandson. I believe the vehicle sold for 38K new. My original thought was that this car would last a long time according to reports and with the low mileage several things are still under warranty. I slowed my driving to the speed limit to get better gas mileage and checked for the least expensive insurer. I could go with PL/PD coverage since the car is a 09

        The miles are piling up fast, I listed for under Kelly blue book and have lookers but no offers, when searching similar cars are going for the same. I pay a higher insurance rate even though it's a 09 in fact checked insurance on a new car and the insurance was the same, obviously not the same car but a nice one just the same.

        I am afraid to put money into a 401 K because of my past loss and the little time I have left to save. I suppose an Roth may be better?

        I'm guessing my situation must seem pretty bleak since I got only 1 response.

        Thank-you.

        Comment


          #5
          Hi, schneidl. First I want to say that I'm impressed that you were able to start a new position at such a good salary at the age of 60. I think you should be proud of yourself for that.

          I am a bit on the fence with your situation. I'll tell you the way I am leaning though: I'm tempted to suggest that you go "all in" on your retirement. Sell your house, sell your car (even if it means taking a bit of a loss on each.) Dramatically cut down ALL of your expenses. Rent an inexpensive apartment.

          Essentially, put as much money as you possibly can into a retirement account. Consult with a financial advisor as to the most appropriate vehicle for investment, giving your circumstances.

          Plan as if you will live *at least* another 40 years because there is a very good chance that you will! Centurions are one of the fastest growing populations. So, don't be too short-sided with your retirement planning.

          I hesitated posting this message, though, because I have mixed feelings about my response. My gut feeling is that you should be treating your retirement needs as a major emergency right now. I would love to hear from others in this forum, too, though for other perspective.

          Comment


            #6
            Originally posted by schneidl View Post
            I am afraid to put money into a 401 K because of my past loss and the little time I have left to save. I suppose an Roth may be better?
            If you are earning $70k per year now and expect to have less income in retirement, then the 401k is much better than a Roth, because you can defer the taxes until you are in a lower tax bracket. The 401k is a tax advantaged account, and it doesn't have to be risky. You can put money into it with a more conservative asset allocation, reducing your current taxes, then pull the money out later when you are in a lower tax bracket.

            What are the investment options within your 401k?

            Comment


              #7
              Originally posted by schneidl View Post
              I have a 2009 vehicle with 35,000 miles on it. My loan payment is 317.65 with interest at 2.99% balance due is 11,938.44. The insurance is 556.00 every 6 months. Blue book is 20,000.00.

              My income is 69,700.00, home mortgage is 113,401.00 payment 1015.57, interest 3.125%. Property tax 2100.00 annually

              My credit card is used for household utilities and some misc. and is usually under $400 paid off each month.

              I deposit everything into a checking account paying 3%

              I have started a new job and do not contribute to the 403 B because there is no match until after one year, I will probably start to contribute but not sure how much to contribute.

              Had planned on retiring at 62 but now 60 I don't see that I can retire for 10 years because I have very little in past 401 K's I missed out on a pension early on in my career as I left a job short of the 10 years required for vesting. The other 29 years I invested the minimum but lost a lot in 2008. The financial planners I have had said because I don't take risks I can't make any money. My emergency fund is $7500.00. I have a couple other savings accounts worth $1000.00

              I feel that I cannot afford this vehicle but they have a history of lasting a long time but gas mileage is average maybe 23 mpg. and when I have listed it for sale have had no offers.

              Any suggestions would be appreciated.
              How much have you tried advertising it and what are you asking for it? I'd expand advertising beyond the local paper. Maybe try an online advertiser like Auto Trader. Maybe you need to lower the asking price as well.
              Brian

              Comment


                #8
                My short answer is to keep the car, save aggressively (invest), and get your home paid off if you can.

                Also, plan to meet with a qualified retirement planner to set some expectations for retirement and devise a plan to arrive there in the next 10 years or so. Determine eligibility and estimated payout for social security and any other benefits that may be due to you and factor all of it in to your plan.

                Comment


                  #9
                  coednfus

                  thanks for the advise

                  i took my car to 4 dealerships and post on autotrader, the offers were very low.
                  While taking a lower price may be okay, where would I find a dependable vehicle.
                  My total monthly expenses without gas or groceries is around $1700.00.
                  I checked apartments in safe areas and they are much or more than my current house payment not many had any heat etc added in.
                  I just got my car insurance and it has been raised $85, no claims, older car but a Lexus, and a small one at that.
                  I have a high deductable health plan that my employer contributes to and so do I, that money can be invested into mutual funds I believe. I went with it because I thought I would have no expenses and ended up with a slip and fall at another person's home, I pay the first $1500.00 of expense which was met in the emergency room. Their homeowners policy will pay $1000.00 only. There is no liability
                  to home owners in MI for slip and falls, So there goes another $500. I thought about small claims court to ask for just the $500.00 claiming they were under-insured which places no liability but not sure if that is even a possibility.

                  My house is 63 degrees, I eat yogurt and peanut butter, I have a new grandson over 150 miles away and it is a costly trip gas wise. but I try to visit 2x/month. Someone mentioned a widow's pension but my husband was killed short 1 year shy of the 10 years required to draw widow's pension, however, our children did receive ssi as minors

                  I had my home sold, FSBO, full price but backed out because we found out my daughter was pregnant,this was a miracle. My plan would be to move closer to them but they are uncertain where to go. They have low paying jobs in East MI the armpit of the state. I live in West MI which is very nice just a higher cost of living, and I'm getting old to change jobs. Geesch writing it down makes it worse but I've had a good life, career and now a grandson, Doesn't get much better than that.

                  Comment


                    #10
                    You may be more or less locked in to the car you have right now.

                    A couple suggestions:

                    1. Have you asked your insurer if you can take an on-line defensive driver course and receive a discount on your insurance? (I get a 10% discount on my insurance because I took the course.)

                    2. Could you take in a roommate? If rents in your area are high, there may be other single women in a situation similar to yours who would jump at the chance to rent a room in your house. The extra income from a renter would certainly help.

                    3. Please seriously consider contributing to your company retirement plan even if there is no match. It sounds like getting yourself financially prepared for retirement is a top priority.

                    4. Is there any chance that your late husband had assets such as a life insurance policy that you do not know about? You can do a search for unclaimed property. Search under every state he ever lived in. http://unclaimed.org/

                    5. I know you want to see your grandson as much as possible, but if he is still an infant keep in mind that while you will remember the visits you make now, he won't. And every visit you make now puts you one step further away from being able to retire. If the plan is to move near to him when you retire, think about the trade-off ... visits every 2 weeks now that he won't remember with delayed retirement, or fewer visits with an earlier retirement and the ability to spend more time with him that he will remember for the rest of his life. It may make sense to reduce the frequency of the visits now, even though it would be hard. And when you do visit, could you ride the bus instead of drive?

                    Best wishes to you.
                    Last edited by scfr; 02-19-2014, 07:19 PM.

                    Comment


                      #11
                      This was bad advise, selling a car that would have lasted me most likely until I could no longer drive. Saving, saving for what?

                      I sold the car and now am renting one and have paid much more than my 317.00 payment because after payoff the difference has proved hard to find a reliable vehicle.

                      Max out my 401 you said, why, from what I see are people in nursing homes who had money but still wake up, eat when and whatever someone else tells them to, one of the activities is watching someone clean the bird cage. Wow that be a blast.

                      Congratulating me on finding a job at 60 and telling people to save as if they will live into there 90's BS, that doesn't happen trust me I'm a nurse,

                      I truly regret taking the advise to sell the best car i ever owned. Contribute 10 percent of my income into a 401K where I risk the chance of losing it as it was in 08.

                      I have no life now but going to work, I have taken the basic cable/internet, had unlimited everything on my phone got that lowered, watch church on mu computer because it does cost gas money to drive the rental to church. pack my lunch have always shopped at Aldi's, had already rented my basement out which really costs me more that what I get in rent, have a mortgage in a town where I know nobody. Don't visit the grand baby until he was old enough to remember me was another suggestion from this site, (as if a little personal satisfaction didn't matter).

                      Thought about suicide but then decided I could probably sell my glock and add it to that fund for finding that reliable car because my 09 with 36K at 317.00 a month with 40 payments to go was too much. Max out that 401K for what reason.

                      My advise to all of you, live for the moment spend all you have on whatever you want. Do it today, tomorrow is no guarantee.

                      Comment


                        #12
                        how much profit did you make on the sale of the vehicle. if it was anywhere near 5000 there are about 20 million cars on craigslist that will be twice as dependable and affordable as your car you just sold. My great grandparents lived to 88 and 103. no issues and no nursing home till the day they died. If you dont plan and you live longer then expected you will be miserable but if you do plan and you live longer you will be thankful. if you die early you can leave some cash for your beloved family.

                        Comment


                          #13
                          Originally posted by schneidl View Post
                          This was bad advise, selling a car that would have lasted me most likely until I could no longer drive. Saving, saving for what?

                          I sold the car and now am renting one and have paid much more than my 317.00 payment because after payoff the difference has proved hard to find a reliable vehicle.

                          Max out my 401 you said, why, from what I see are people in nursing homes who had money but still wake up, eat when and whatever someone else tells them to, one of the activities is watching someone clean the bird cage. Wow that be a blast.

                          Congratulating me on finding a job at 60 and telling people to save as if they will live into there 90's BS, that doesn't happen trust me I'm a nurse,

                          I truly regret taking the advise to sell the best car i ever owned. Contribute 10 percent of my income into a 401K where I risk the chance of losing it as it was in 08.

                          I have no life now but going to work, I have taken the basic cable/internet, had unlimited everything on my phone got that lowered, watch church on mu computer because it does cost gas money to drive the rental to church. pack my lunch have always shopped at Aldi's, had already rented my basement out which really costs me more that what I get in rent, have a mortgage in a town where I know nobody. Don't visit the grand baby until he was old enough to remember me was another suggestion from this site, (as if a little personal satisfaction didn't matter).

                          Thought about suicide but then decided I could probably sell my glock and add it to that fund for finding that reliable car because my 09 with 36K at 317.00 a month with 40 payments to go was too much. Max out that 401K for what reason.

                          My advise to all of you, live for the moment spend all you have on whatever you want. Do it today, tomorrow is no guarantee.
                          Are you trolling? There are a lot of cars out there that gets 40mpg and has a lease of 199, or cost 17000 to buy new so I have no idea what you are renting that cost more than a lexus (look into a mazda 3). Go buy a used toyota for 10k and get 150k miles out of them without ever changing the spark plugs.

                          If you want to play it super safe, max out your 401k in the most conservative model, or just go and buy treasury bonds. Why should you max it out? Because you obviously have a spending problem all your life. Money you don't see is money you can't spend.

                          Lastly, maybe you should live closer to your grandson and rent out your house. You're a nurse, you can get a job anywhere.

                          Your last piece of advice about living for the moment is exactly why you are on this forum asking people what kind of compromises you should make so you can eventually retire. I will not congratulate you, because I would probably end my life too if I find 7k in my savings at age 60.
                          Last edited by Singuy; 04-13-2014, 03:28 PM.

                          Comment


                            #14
                            The "live for the moment" attitude is the exact mentality that results in people nearing 60 with a mortgage and car payment, and barely any retirement/EF money. It also sets them up for a rebellious attitude when people offer clear paths toward success, because they don't understand why sacrifices have to be so deep now (hint: it is because you've deferred a few simple steps early on in exchange for instant gratification).

                            Regarding the Lexus, some people feel a "reward" is due them when they reach a certain age...I get that. But if that plan puts you in a financial situation where you end up regretting the purchase because money is so tight now, then the plan is flawed; you should have saved up cash, made paying cash for the car the goal, and the car itself the reward.

                            Comment


                              #15
                              Hi schneidl,

                              I know your current circumstances may seem a bit bleak, but you are definitely starting to take steps in the right direction! Don't think that you are not. You said you have a rental car now?

                              There is not much of a need to have a rental car, just go find a used car, probably compact. You can spend $10,000 on a fantastic used car and get 30+ mpg. I would drop the rental car for sure.

                              As far as your living situation, perhaps think about moving closer to your grandson and downsizing if needs be.

                              Comment

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