Retirement Planning - Lessons Learned

[California]

...after the bust, Congress required us to take their money even though we were one of the banks that past the 'stress' test.

I hope that wasn't WF. We discovered for both FIL and then Mom, several new checking accounts (or credit cards?) had been established in their names without telling them. FIL was very confused by all the invoices for late charges. My wife cleaned up the mess for him.

Mom asked me to take over her financial records at her age 95 when she discovered she was suddenly being billed $65/month for 'Credit Protection' (useless duplication of the existing disputed-charge provision) on each of multiple credit cards that she didn't recognize. They halted that charge and closed the unneeded cards as soon as we requested it.

And when I closed Dad's WF checking as Executor, I was told to send a notarized request and an original death certificate to a special branch in Oregon. Twice. Both instances were ignored by that special 'cheat the widows and orphans' Oregon office, they had no record of my responses. I finally cashed a check for the last $1k in the account less 5 cents, then ignored the Low Balance Penalty letters they sent me for months. So sue Dad! He donated his body to science, you'll never find him.

 

[Larry Caldwell]

Im thinking about using my 401k to pay off my house early next year. I will pay 10% penalty fee and they will deduct state and federal taxes which comes out to this as an example. If I remove 100,000 out of my 401k, that means they will hand me a check for 65,000 dollars. I would have to withdraw 155,000 assuming 10% penalty fee, 20% fed taxes and Maines 5.5% tax rate(total 35.5%) in order to get the 100,000 to pay of the mortgage.

1-I would own the hose after that so if stock crashed-I got something out of it.

2-I should get some taxes back after filing taxes?

3-If I font pay of the loan early i will pay on interest which is 5% now foe me for 15 more years. Thats about 75,000 in interest I would save vs 65,000 in taxes and fees withdrawing from my 401k.

4-I would lose compound interest earnings but then again the stock market isnt going to continue to go up like this...no way no how.

5-I would have 750 a month less to pay for bills meeting meeting and exceeding my budget.

Anyone think of any more pros or cons? My medical is mostly paid for for life and I already have a soc security and two small pensions and one medium sized pension for life. I am also mostly debt free.

You can refi for way under the inflation rate. It's free money. Let your 401k ride; if the market crashes it will recover. You should be able to get a 15 year fixed for under 2%.

 

[RickB]

I hope that wasn't WF. We discovered for both FIL and then Mom, several new checking accounts (or credit cards?) had been established in their names without telling them. FIL was very confused by all the invoices for late charges. My wife cleaned up the mess for him.

Mom asked me to take over her financial records at her age 95 when she discovered she was suddenly being billed $65/month for 'Credit Protection' (useless duplication of the existing disputed-charge provision) on each of multiple credit cards that she didn't recognize. They halted that charge and closed the unneeded cards as soon as we requested it.

And when I closed Dad's WF checking as Executor, I was told to send a notarized request and an original death certificate to a special branch in Oregon. Twice. Both instances were ignored by that special 'cheat the widows and orphans' Oregon office, they had no record of my responses. I finally cashed a check for the last $1k in the account less 5 cents, then ignored the Low Balance Penalty letters they sent me for months. So sue Dad! He donated his body to science, you'll never find him.

Wells has passed bank stress tests. They are still working on basic human decency and honorable business practice skills.

 

[kenmac]

We were not allowed to do that until we had X dollars in equity in the house. Probably something like 20% paid off. Escrow paid insurance and property taxes. We took those over as soon as we were able to.

I forgot about the dreaded taxes. LOL. Yes, I pay those as well.

When I bought the place (four yrs. ago) I paid 25% down to avoid PMI.
I have always paid HO insurance and PT instead of escrow.

I also self insure a portion of my HO insurance to keep the rates down.
Perhaps it's up to each individual lending institution's requirements.

 

[California]

I also self insure a portion of my HO insurance to keep the rates down.
Perhaps it's up to each individual lending institution's requirements.

Heck yes. Insurance should be for expensive disasters, and for a representative to defend you from liability. Not for an expense on the level of a blown-down fence etc.

 

[MossRoad]

I forgot about the dreaded taxes. LOL. Yes, I pay those as well.

When I bought the place (four yrs. ago) I paid 25% down to avoid PMI.
I have always paid HO insurance and PT instead of escrow.

I also self insure a portion of my HO insurance to keep the rates down.
Perhaps it's up to each individual lending institution's requirements.

Yep. We had to start from scratch on our 1st house. Double payments made the 30yr go away in less than 5. Then we put that house and 20 acres under a blanket mortgage. The value of the house and land together, less the equity in the house, meant we owned more than 25% of the total value, so no money down and no mortgage insurance required. Paid that off pretty quick as well. 5 years later, we did another blanket mortgage on that same house and the house we are currently in. Again, since the values of that house plus this house, less the equity we had in the first house, meant we owned more than 25% of the total value, so again, no money down and no mortgage insurance required.

When we first heard about blanket mortgage it seemed like "creative financing" and kinda shady, but it was the Savings And Loan's idea to help us get around the 25% down and insurance requirements. It worked out great both times.

 

[MossRoad]

Self insured...

Our current house is valued at just a tad over $100K. The replacement cost is estimated to be over $250K. Our home owner's insurance is currently around $1K per year. I don't think self-insuring would save me much on premiums.

I'm sure other people it works out numbers-wise though. Just not for us.

 

[RickB]

Self insured...

Our current house is valued at just a tad over $100K. The replacement cost is estimated to be over $250K. Our home owner's insurance is currently around $1K per year. I don't think self-insuring would save me much on premiums.

I'm sure other people it works out numbers-wise though. Just not for us.

My self insured portion is called a deductible.

 

[grsthegreat]

In today’s market I thought all houses were worth over 100K.

 

[Torvy]

I hope that wasn't WF.

Momma always said if I don't have something nice to say, don't say anything... So I will not say anything about WF except that I have never worked for them.