Paying taxes

[Taylor2000]

So I fI was going to put 30,000 in retirement can I use that as collateral or finance a toyhauler?

[_Sea_Of_No_Care]

Well bee, what you are implying is that one should only pay cash for the purchase of an RV, because that is what you have done. Sounds kinda high and mighty to me. Contrary to what you might think I like many other people on this site can afford to pay all my bills on time, save for retirement, and partially finance my MH. People choose to finance for many reasons, not because they can't afford them. This is sound advice that I have gotten from my financial advisor not granny. Have a good day!!

[tatest]

You want to put everything you can, IRS permitting, into your retirement savings.

That has nothing to do with avoiding taxes, now or later, it is all about having enough there to live on. When you retire, you will have to live on SSI retirement and earnings or scheduled withdrawals from those savings.

Whether you save pretax, after tax, that is up to you, (and IRS limits on pre-tax savings). Saving pre-tax, you are taking chances on your tax rates now vs what those rates will be when you take the money out. FWIW, 10 years after retirement, my marginal income tax rate on withdrawals from retirement saving are somewhat higher than the marginal rates I was paying most of the time when I was working, so tax deferral turned out not to work so well for me.

Can you use your retirement savings as collateral? I haven't found lenders willing to do that, they make their loan decisions based on you ability to pay back and want collateral that they can seize. They can't seize your retirement savings in IRAs or 401K plans.

What you can do, with some plans, is borrow the money from yourself. Interest rates may be higher than market rates, but you are paying the interest back to yourself. This is not a wise thing to do if you don't have time to pay back the loan before retirement.

[beemerphile1]

"Sea Of No Cares" wrote:
Oh here we go again the "You should only pay for an RV if you can pay cash for the whole thing." Give us a break with the high and mighty speech will ya. Lots of us have financed a portion of our RV's and CAN afford them. Have a great day!!

The question involved saving for retirement. Saving and spending are pretty much exclusive of each other. I applaud the OP for wanting to save. Unfortunately many aren't aware that you cannot eat your cake and still have it.

Not "high and mighty", just sound advice. The kind your granny probably gave to you. 🙂

[_Sea_Of_No_Care]

Oh here we go again the "You should only pay for an RV if you can pay cash for the whole thing." Give us a break with the high and mighty speech will ya. Lots of us have financed a portion of our RV's and CAN afford them. Have a great day!!

[beemerphile1]

I am confused by the relationship between saving for retirement and buying an unnecessary RV. The whole concept seems mighty strange to me. If you are saving for retirement - then save. Spending is not saving.

Financially an RV is a total waste of money. You may justify it by the enjoyment you get from it but it is an expenditure on a depreciating asset. Unless you live in it the expenditure can never be justified financially and certainly will not contribute to your retirement savings.

Personally I think purchasing toys like RVs, motorcycles, etc., are only justified if you can pay all your bills, save for retirement, and still pay cash for the toy.

[accsys]

Just to answer the original question which was not out of line since tax avoidance is perfectly legal and expected. Tax evasion is a totally different thing and can buy you time in a penal institution.

You didn't specify what kind of retirement account but you cannot use an IRA as collateral. You are also limited to 5,000/year contribution unless you are old enough to qualify for a 6,000 contribution. You would be much better off using the toy hauler as collateral for its loan and deducting the interest as mortgage interest on a second home IF you currently itemize.

[F105]

Jim Shoe wrote:
Way to go, fellow campers. The guy's a new member and has asked just three questions since joining 8 months ago. Maybe he can find a different forum where the members remember when they were new.

Take it easy - I apologized and others did also in their own way. As was pointed out early, the way the topic was misleading as most of here pay our fair share of taxes.

[Jim_Shoe]

Way to go, fellow campers. The guy's a new member and has asked just three questions since joining 8 months ago. Maybe he can find a different forum where the members remember when they were new.

[Francesca_Knowl]

darsben wrote:

Trackrig wrote:
And speaking of paying taxes, I wonder if we only have to pay 86% of our Fed taxes for the 16 (?) day shut down since 14% of the government wasn't working?

Bill

You miscalculated. Because of the shutdown you will have to pay 22% extra because the people not working will now work overtime to make up.
14% times 1.5 for overtime equals 22%
So you will pay 122%

I think both of you are overlooking the "promise to pay back" made to those States that ponied up funds to open National Parks in particularly profitable Markets!

Add another one per cent or so for that...now we're up to 123%. :S

[darsben]

Trackrig wrote:
And speaking of paying taxes, I wonder if we only have to pay 86% of our Fed taxes for the 16 (?) day shut down since 14% of the government wasn't working?

Bill

You miscalculated. Because of the shutdown you will have to pay 22% extra because the people not working will now work overtime to make up.
14% times 1.5 for overtime equals 22%
So you will pay 122%

[Trackrig]

And speaking of paying taxes, I wonder if we only have to pay 86% of our Fed taxes for the 16 (?) day shut down since 14% of the government wasn't working?

Bill

[352]

Please just wait to the government shuts down again and then you don't have to worry about it.

[gbopp]

This will probably get deleted but, don't we all take deductions on our income tax returns to 'avoid' paying tax?

[F105]

OB is correct - sorry for jumping on you.