Split: F-150 EB 3.5 versus Ram 1500 or 2500 - Financial decisions

[Nan]

Thank you everyone for your wonderful advice.  Now I have another dilemma and I think this is probably not the forum to use, but since I am on it, I will.  All my life I have saved using the 401 at work. (And this was working at a paper mill).  After retiring, I transferred the money into Wells Fargo.  This is what they are saying:  I will be paying too many taxes to draw from my account.  I absolutely do not want to go in debt for a new truck and an Oliver when I have the money in Wells Fargo.  I also do not want to sell the house unless I am sure that I want to go full time.  I am toying with just throwing caution to the wind and do it, but also am a little scared.  Has anyone been in this same boat?  What did you do?   Thanks again.

[topgun2]

Nan -

 

I split this discussion off from your original post because it doesn't specifically have to do with a truck in and of itself.

 

First of all - congrates on your participation in the 401K program of your company.  As you are now finding out - these tax advantaged programs can mean a great deal to you in your retirement.  When you say that you moved your 401K to Wells Fargo, I assume that you moved it into another tax advantaged account (i.e. IRA or Roth IRA).  If you moved it into a Roth IRA then you have already paid taxes on this amount and no further taxes are due (this is most likely NOT the case though).

 

Given your questions, there are a number of things that should be considered:

 

1.  Your age, health and overall financial standing.

 

2.  Your overall tax status (both Federal and State)

 

3.  Going into debt is "usually" not good, but, could be OK in certain circumstances (see number 2 above particularly in regards to any current stock holdings that may be at a loss from your original "basis" (the price you originally paid) or other losses that you may have recently incurred.

 

4.  Selling your house?  What is your "equity" position in the house?  What other financial resources might you have?  If you are not sure about this decision then I would say a big NO.

 

5.  Throwing caution to the wind is not a very good idea since (depending on number one above) you probably do not have time to recover in the event something should go wrong.

 

It appears to me that what you could use is a good financial advisor - someone that is certified as a financial planner.  If you are not familiar with investments and general financial matters then a visit to your bank can serve as a starting place.  They should be able to direct you to a number of certified financial planners in your area.  Sometimes your insurance company can also get you this type of information.  But, please, do not be afraid to ask for proof of certification AND how they will get paid for the service that they will give you.  If at any time you do not feel comfortable - leave and seek someone that you DO feel comfortable with that can explain exactly what they are talking about to you in language that YOU understand.

 

Bill

[STEVEnBETTY]

Hi Nan, you need to do a cost benefit analysis between borrowing the money and withdrawing the money from your brokerage acct. If you borrow all, or part of the money you need to figure the amount you’ll pay yearly in finance charges and compare that to the additional taxes you have to pay by moving up to a different tax bracket. A good “fee”based financial advisor can help you with this, if you can’t figure it out on your own. Actually using credit can make sense if you use it wisely.

 

Goodluck, Steve

[John E Davies]

One interesting thing about an Oliver that sets it apart from all other (mass produced) RVs is the resale value. In the current economy their values are holding very high, they hardly depreciate at all, so if you needed to sell yours, it would not be a huge financial loss like for a Thor-built plywood junker.

 

HOWEVER, when the US economy tanks again, in a year or two or five, the artificially booming RV market will definitely collapse with it and it will be much harder to sell your Ollie, and the price will inevitably be lower. Because the production numbers are so low, there is no real way to know a used one’s true Blue Book value and RV dealers are reluctant to buy and sell them. So you have to sell privately. When the economy tanks your financial investments will too. Especially if they are based on the stock market. Not good.

 

The point is that it is a real gamble if your finances are shaky in any way, and as we turn grey you never know when a medical emergency might happen. Some of the trailers listed here have been due to unexpected medical bills. It is unfortunate but a fact of life.

 

In your shoes instead of raiding my money reserves I probably would be shopping for an older easy to handle self contained Class B motorhome like a Roadtrek that has already depreciated, to buy outright and use for a year or more. The shorter ones can even be used as a daily driver. If you like the lifestyle you can sell the house while living in the RV, order an Ollie and look for a low miles Certified Used truck, or a new heavily discounted one, and then sell the current RV for a minimal loss.

 

Don’t liquidate your retirement savings unless you have a very dependable second income. I am not a financial advisor, nor do I play one on the Internet, so don’t believe me or anyone here. Talk with a trustworthy one who charges for his services and who is NOT trying to sell you something on commission. This is my own advisor, look at her description, and try to find somebody close by who is similar. Or give her a call, I highly recommend her and she might be able to offer a referral, or she can do everything for you remotely. If you hire her, she is not cheap but you won’t end up with some weird annuity you don’t need and you can trust her to be completely working for your best interests. .... https://www.financialtrex.com/faq/

 

https://www.financialtrex.com/blog/how-to-choose-a-financial-planner/

 

Get your investments “tuned up” for a coming downturn. Change banks (Wells Fargo is plain BAD - Google “Wells Fargo problems”.) Don’t make any major moves before confirming that they are good moves. Remember - I said to don’t trust me! ;)

 

Good luck.

 

John Davies

 

Spokane

 

 

 

 

[BackofBeyond]

I will be paying too many taxes to draw from my account

 

I just don't understand this comment. You should fully.

 

As the other folks have advised, your best bet is to review your situation with a Financial planner who has a  fiduciary role : someone who is bound ethically to act in the client’s best interest.

 

My one piece of advise: DO NOT make any moves with your money until you fully understand what you are doing and feel confident with your choices.

 

There is no reason to make a hurried, bad decision, especially with retirement funds. Take your time.

 

JD's comment on Wells, are fair criticisms.

 

But, you get what you pay for here, and we are all free.....

 

Good luck, please keep asking if your unsure.

[Overland]

My wife and I ended up financing for exactly those reasons - for us the cost of the money was less than what we earn from it, and of course pulling the money out would have meant taking a capital gains hit.  So in the end, the financial benefit of financing outweighed our psychological resistance to debt.  But we're both still earning incomes and the debt will be gone by the time we retire, so perhaps our resistance wasn't so great.  If we were retired, we might have made a different decision - who knows.  The great thing about the Ollie is that so long as I don't drive it off a cliff, it will still be going strong when the debt is payed.

 

I'm not sure if you can really go wrong by financing, barring some market disaster, so long as you don't need the credit for something else.  What I mean is that you can always pull the money out later if you decide to pay it off.  And I think with the Ollie's resale value, you're unlikely to ever be upside down on the loan.  The truck may be a different matter, of course.

 

Then again, my wife keeps the checkbook, so my advice probably isn't worth much more than maybe the comfort of knowing that most all of us have weighed the same decision.

[John E Davies]

https://money.cnn.com/2018/09/07/news/companies/wells-fargo-scandal-two-years/index.html

 

I was a WF customer for a few years, I never felt that they cared an iota about me as a person and the customer service was dismal. In 2004 in a face to face meeting I was promised a great deal for a home mortgage, for new construction, with no points and a competetive interest rate. It sounded wonderful and I was immediately a little suspicious. I demanded a signed letter stating the terms with the company letterhead as insurance. Sure enough, the loan officer was fired, his replacement told me he was going to have to charge points and that the guy had made a bunch of “verbal promises he should not have made”. I waved the letter in the new guy’s face and told him he had better honor those written promises. He looked pretty depressed, but he did it.

 

Always get it in writing.

 

A good local credit union for banking, credit card and personal loans, and a good broker like Vanguard for investments, makes way more sense. I joined BECU right after the Wells Fargo mortgage incident and never looked back. These newest scandals you read about? Old news to me.

 

John Davies

 

Spokane WA

[BackofBeyond]

I’m not sure if you can really go wrong by financing, barring some market disaster, so long as you don’t need the credit for something else. What I mean is that you can always pull the money out later if you decide to pay it off. And I think with the Ollie’s resale value, you’re unlikely to ever be upside down on the loan. The truck may be a different matter, of course.

 

It is amazing to me what some businesses do to entice you to use their credit agency. When I purchased my truck, GM wanted me to use their credit, I said no thanks I'm using cash.  Says the dealer -  Well it will save you $1000+ if you finance. Ok, I ask -  is there a minimum holding period, minimum finance amount, early payoff fee - none, no.  I made my best deal, and used their $$ Risk free.

 

I  pay one note, call GM financial, payoff entire thing, receive the title in one week - saved decent cash. I asked - why don't you just give me the $$ upfront, and leave out all the other . Seems people don't pay off the loans early most of the time....

 

Was a tough decision, using credit - haven't done that in a long time. It pays well in modern marketing it seems.

 

RB

 

 

[KountryKamper]

 

It is amazing to me what some businesses do to entice you to use their credit agency. When I purchased my truck, GM wanted me to use their credit, I said no thanks I’m using cash. Says the dealer – Well it will save you $1000+ if you finance. Ok, I ask – is there a minimum holding period, minimum finance amount, early payoff fee – none, no. I made my best deal, and used their $$ Risk free.

 

I pay one note, call GM financial, payoff entire thing, receive the title in one week – saved decent cash. I asked – why don’t you just give me the $$ upfront, and leave out all the other . Seems people don’t pay off the loans early most of the time….

 

RB

 

 

I did the same thing. Financed the minumin I could and took their $1000 dollar discount and paid it off before the first payment was due when they sent me the loan information. Paid no interest and had my title in about 2 weeks. A lot of paperwork for them just to try to get me to finance it.

[Nan]

Thanks to everyone who responded.

 

I do have a good financial planner and one that I trust (even though he works for WF). He has advised me to get a loan for the Oliver and not take it from savings.  He said it would cost me $30,000 in taxes next year and $9,000 the year after..a snowball effect.   It makes me sick when I think I saved all of those years to pay a hospital bill or some whacko thing like that.  I am 72 years old and in no way am I  thinking about going back to work.  I volunteer at Kairos Prison Ministry and am a caregiver for Hospice in Savannah..and love both.  If I had it to do over, I would put the savings in a safety deposit box and be able to pull it out as I wanted.  Again, thank you all and hope to meet some of you at the rally in May.

[topgun2]

Nan -

 

None of us like paying taxes!  But, try to put that tax paying chore into a bit of perspective.

 

Back when you started saving your money into that 401K plan (and/or IRA) you didn't pay taxes on that money (at least on the Federal level).  Then, for all those years that you had that money in those plans you earned interest and dividends on BOTH the money that you deposited AND the tax amount that you didn't have to pay when you made the original deposit.  So, now when you want to withdraw those funds you have to pay the taxes but you are at least paying with some of the monies that you have earned on those tax monies that you didn't originally pay.

 

Certainly a classic case of "pay me now" or "pay me later" (from the government's point of view) but at least it is a bit comforting (to me at least) to know that I've been earning money on those taxes that I should have paid originally.

 

A second thought - please don't take the broad brush negative comments by some people about Wells Fargo as proof positive that the entire organization is BAD.  In any organization of ANY size, there are good and bad people and things that should be avoided.  Yes, Wells Fargo got caught doing things in parts of that organization that were not according to law, regulation or common decency.  However, that does not mean that everyone in that organization or every part of that organization is/was bad.  Financial institutions are constantly reviewed by several Federal and State regulatory agencies and "must" adhere to volumes of standards and regulations that touch virtually every part of that business.  It is one of the higher regulated businesses that we have.

 

Certainly when an institution (your bank, auto mechanic, airline, hair dresser, etc., etc.) fails to abide by acceptable standards and/or regulations (and are caught - which I believe they all will be caught in due time) our trust in them is somewhat eroded.  When that happens (and ideally we should be doing this at all times) we should take a closer look at our dealings with them and decide for ourselves if that institution and the people within it continues to warrant our trust and/or business.

 

Having said all this, I believe that depending on your own amount of financial expertise, you should treat major financial decisions in a manner similar to how you should treat major health decisions - if there is ANY doubt in your mind as to your course of action, you should seek a second opinion.

 

Bill