When you say withdrawing, do you mean from a 401K? If so, then yes, you can ‘settle’ up at year end by making a final tax payment from your IRA distribution to the IRS. As I commented above, this did not satisfy my state’s Safe Harbor requirement.
2 Likes
It’s really important to change your mode from saving to spending. My mother who died of pancreatic cancer at age 54 once told me money is never yours unless you spend it. We splurge on comfort, convenience and experience. I don’t worry about the future too much (I’m already late 60’s and DH is early 70s) since if worse comes to worse, we can always sell our investment properties (no mortgages) or even our house and rent in our remaining years. This mindset takes a couple of years to adjust and change but in our case I need a reminder from time to time that money is to be spent not hoarded.
4 Likes
We found it difficult to change our mindset in retirement from saving to spend-down. It did help that I worked (and carried medical coverage) for a year after my husband retired and was waiting to turn 65/Medicare. That way we eased into it. We have two pensions, but due to corporate scale-backs they are much smaller than originally envisioned. So we do milk our savings - not a financial concern (except a bit in this market) since we were good savers, but it makes me feel old to be at this stage.
2 Likes
A similar point of view from “Hello Dolly” : Dolly Levi : Money, pardon the expression, is like manure. It’s not worth a thing unless it’s spread around, encouraging young things to grow.
13 Likes
Thanks So much. Yes from our 401k.
1 Like
Interesting graph I saw from my mother’s Vanguard advisor. Over the last 100 years, after every single bear market, there is a massive rally. Every single time. A picture really is worth a thousand words.
5 Likes
Yes, but the trick is calling the bottom.
5 Likes
Yeah, and who can do that! I just try to buy when it dips down, and keep buying as it goes lower. My problem is taking too many little profits when it starts going back up and missing most of the rally.
You mean the feeling of missing the 40% off sale because you bought during the 20% off sale?
5 Likes
That’s one thing. The other is the pain that comes from buying in a falling market well before it bottoms out, hence the expression, “don’t try to catch a falling knife”.
3 Likes
In taxable accounts, use that opportunity to tax-loss harvest. (yeah, no one likes losses, but it helps reduce the pain.)
1 Like
Just remember the wash sale rules! 
1 Like
Cheap money, anyone have any ideas of how to get it? Refinance, nope. HELOC, nope. Boat or car loans, nope. Second mortgage, nope. The cheapest money I see out there to borrow is on my credit card, surprisingly (3.99%). Just trying to delay cashing money out of our Roths to pay taxes on a large 401K withdrawal for awhile.
3.99% seems pretty cheap to me. I don’t expect you can do any better than that.
1 Like
You could be right. I’ve heard of some zero percent interest rate cards, but sometimes it’s a bait and switch. They approve you for a new card, but with a tiny credit limit, so you can’t really use it. Hard to fathom that the cheapest rate out there is on an Amex credit card, but maybe it is.
4% rate on a cash advance from a credit card seems incredibly cheap. Are you sure about that that? My credit card charges 28% lol.
4 Likes
I thought paying your taxes with a credit card incurs a fee?
If it’s a cash advance, see if there is an extra fee or different interest rate on that?
I had to get extra cash at one point to pay a contractor in a hurry. I had spent down the emergency fund (new roof) and my usual way of getting cash was going to take too long. So I withdrew money from my longer term fund but took a cash advance to pay for the gutters. Because he could come a certain day and needed his money right away.
It was expensive. And the interest rate started on day 1 instead of the grace period that usually happens when you make a credit purchase. So a fee plus incurring interest.
2 Likes
That rate is probably just the interest rate. You likely have to pay one-time additional cash advance fee (up to 5%). The interest rate also isn’t directly comparable to that of a “bullet” loan (which requires no repayment of principal each month), because the credit card loan requires monthly minimum payment (including some portion of the loan principal).
2 Likes
It’s an American Express deal of 3.99% for six months, for what we put on the credit card. We aren’t looking for a cash advance, so it would be without a fee, though certainly with a minimum monthly payment. There is a 1.89% fee for using a credit card to make tax payments, but I would consider that a reasonable trade for the credit card (hotel) points. We could also consider putting other expenses on that card if we didn’t want to pay the 1.89% fee.
Yeah, I don’t think those cash advances are a good deal at all. Low interest rates, but if you have to pay 3-5% as a fee, that’s not a deal. We used a USAA card for that several years ago, because though they had a 3% fee, they maxed it out at $75. Those days are long gone, I think.
1 Like