• Text Only
Voting History
rated:
I have $166k sitting on my inherited IRA.

My wife does not want to eat any more into this inherited IRA. After all, it used to be much higher but we did some home improvements. We are 46 years old, and putting kids through college...We owe 16k in credit card debt and also are getting a pool deck for $8k. I know, first world problems...

Here are our options..

1. We continue what we are doing with maxed credit cards and higher interest. We will have no credit cards available for emergencies and we would be paying around $350 a month for these credit cards. IRA stays at $166k, but things are still tight monthly which can lead to draining the IRA to get by.

2. We pull money out of the IRA to pay off both credit cards and the pay for the pool deck. IRA goes to $142k but we are credit card debt free, have our pool deck and we would not need to withdraw as much from IRA monthly because we wont have any of the $350 in credit card payments. This is the hardest option to do but I think is the best option. You have to swallow and heavy pill, but it will be easier in the long run.

3. We get the loan for $17k from my retirement fund with a low interest and pay off the credit cards. We use IRA for the pool deck only which lowers it to $158k. We still have $300 taken out of my paychecks for the loan which means we will end up pulling more from IRA because money is tight monthly.

The key here is, we don't want money to be tight monthy. BECAUSE WHEN MONEY IS TIGHT WE USE CREDIT CARDS AND PULL FROM IRA. We need to swallow the pill and do option 2. Correct? Am I right here?

Member Summary
Most Recent Posts
Can you list your income and expense per month, so we can try to find out where is your budget go wrong.

gremlins718 (Aug. 26, 2016 @ 5:45p) |

your*

jaytrader (Aug. 27, 2016 @ 6:23p) |

Read this forum every week and you'll get the joke. I'll apologize on behalf of everyone who called you a troll. But the... (more)

TravelerMSY (Aug. 29, 2016 @ 1:15p) |

Staff Summary
Thanks for visiting FatWallet.com. Join for free to remove this ad.

Radical idea, but hear me out. How about not paying for a $8k pool deck because you cannot afford to do so right now. If this is a roth IRA with no penalty for withdrawing, use $16k from the IRA to pay off the remaining debt. Whatever you are paying on credit cards (likely > 20%) is going to be costing you much more than annual investment earnings on the IRA (likely ~= 7% long-term). Build the pool deck when you have the cash to do so and no debt. If you don't want to be "tight" with your monthly bills, don't build pool decks you cannot afford and pay off high-interest credit card debt.

Also: 99% chance this is a troll. It has all the things needed to rile up FWF: inherited (not earned) IRA, $16k credit card debt while paying $8k for a pool deck (and proposing to use IRA money to pay for that deck), someone obviously living beyond their means, etc.

You are spending more than you make. No amount of manipulation will solve that. If your credit cards are maxed out, it is not the right time to build a pool deck. You need to take whatever money you were going to use to pay off the deck and instead use it to pay off your credit cards, and don't build a deck until the credit card debt is gone.

nightbird42 said:   and putting kids through college...We owe 16k in credit card debt and also are getting a pool deck for $8k.
  
Make the kids get student loans, and you won't have 16K in credit card debt, and get your pool deck when you can actually afford it.

Not sure what you mean by a troll? Isn't an internet troll someone who is just messing around and making stuff up? I am not. What is FWF???
Try living in the Los Angeles area, my example is quite common.

I am asking for advise here based on three options. We will be doing one of those three options. I am just asking if option 2 is the best one.

Obviously not getting the pool deck and not living beyond your means would be the best option but we are past that point. After this deck its time to buckle up and save.

Forget the pool deck, you can't afford it right now. Sounds like you are living beyond your means (not sure because you would need to disclose income and monthly bills to see). Maybe you could get a bill consolidation loan at a lower rate through your bank? It sounds like this right now to me though, take money from IRA, Pay off Bills, Charge more, Take money from IRA......

If you give more information on your monthly income / bills it would be helpful.

First, figure out where your money is going and why you keep running up the credit cards to support your standard of living, and then STOP doing that.  Absent the inheritance, you have $16k in credit card debt and can't afford a pool deck, period.  Once you've stopped running up credit card debt and learned to live within your means, THEN...

Treat the inheritance as a windfall.  Take as much as you need to pay off the existing debt, and then, hell, treat yourself with the new pool deck, because you know, the dearly departed would have wanted you to, right?  Then live within your means going forward and be thankful for the opportunity to reset.

nightbird42 said:   Not sure what you mean by a troll? Isn't an internet troll someone who is just messing around and making stuff up? I am not. What is FWF???
Try living in the Los Angeles area, my example is quite common.

I am asking for advise here based on three options. We will be doing one of those three options. I am just asking if option 2 is the best one.

Obviously not getting the pool deck and not living beyond your means would be the best option but we are past that point. After this deck its time to buckle up and save.

  
Now 99.9% chance this is a troll. The bolded parts are crafted by someone who knows exactly how to get a emotional response from posters here. On the 0.1% chance this is real, let me respond:

Living in Los Angeles does not mean you magically get to buy things you cannot afford. You cannot afford a pool deck because you have credit card debt and don't have cash on hand to pay for it. A pool deck is a luxury item, and you are not in a financial position to be able to afford a luxury item. The three options you laid out are all non-starters. None of them is a good path, if you go down this path anyways you are simply doing what you wanted to do and making stupid financial decisions. You posted here to ask for advice, and you will be told what is the best financial move: neither option 1, 2, or 3. The only smart move is to not build a pool deck and pay off your credit card debt (and don't get into credit card debt again). No one is going to tell you what you want to hear and advise you to make stupid decisions, which is what you want. This board does not exist to condone/applaud stupidity.

Should the retirement fund ever be loaned from to pay off debt? I have 50k in there.

nightbird42 said:   After this deck its time to buckle up and save.
  
But you won't. You're 46. I suspect you've lived your entire life scraping by. A lifetime of choices like that just don't change overnight. What makes you think that after the pool deck, that it won't be a new car?

nightbird42 said:   My wife does not want to eat any more into this inherited IRA.

You've already been dipping into it. Whose IRA is it, yours or your wife's? If it's yours, it's yours, and you need to protect it because if after the kids are gone and you want to trade up, you'll need it.

Chyvan said:   
nightbird42 said:   After this deck its time to buckle up and save.
  
But you won't. You're 46. I suspect you've lived your entire life scraping by. A lifetime of choices like that just don't change overnight. What makes you think that after the pool deck, that it won't be a new car?

nightbird42 said:   My wife does not want to eat any more into this inherited IRA.

You've already been dipping into it. Whose IRA is it, yours or your wife's? If it's yours, it's yours, and you need to protect it because if after the kids are gone and you want to trade up, you'll need it.


nightbird42 said:   I have 50k in there.

This isn't helping. It's proof that you can't save a nickel to save your life.
  

magika said:   
nightbird42 said:   Not sure what you mean by a troll? Isn't an internet troll someone who is just messing around and making stuff up? I am not. What is FWF???
Try living in the Los Angeles area, my example is quite common.

I am asking for advise here based on three options. We will be doing one of those three options. I am just asking if option 2 is the best one.

Obviously not getting the pool deck and not living beyond your means would be the best option but we are past that point. After this deck its time to buckle up and save.

  
Now 99.9% chance this is a troll. The bolded parts are further intended to just get a response. On the 0.1% chance this is real, let me respond:

Living in Los Angeles does not mean you magically get to buy things you cannot afford. You cannot afford a pool deck because you have credit card debt and don't have cash on hand to pay for it. A pool deck is a luxury item, and you are not in a financial position to be able to afford a luxury item. The three options you laid out are all non-starters. None of them is a good path, if you go down this path anyways you are simply doing what you wanted to do and make stupid financial decisions. You posted here to ask for advice, and you will be told what is the best financial move: neither option 1, 2, or 3. The only smart move is to not build a deck and pay off your credit card debt (and don't get into credit card debt again). No one is going to tell you what you want to hear and advise you to make stupid decisions. This board does not exist to condone/applaud stupidity.
 

What is your issue with me and why do you keep calling me a troll?
I find this message board, and the very first time I post I am called a troll. And why would anyone take advice form someone being such a jerk to them?
Nomatter what i say you are going to respond by saying "see! I knew he was a troll"..

I hear you guys I really do, but have I walked into a surfing beach where only "locals" are allowed to surf? have I stepped on your territory and is there a rite of passage before I am "accepted" into the group? You do a great disservice by offering what looks like good advice but muddying it up by being accusatory. Haven't you learned anything about how people get defensive if you accuse them of something and any points you bring up are lost because they are so frustrated?

I appreciate the advice I really do. But is this a microcosm of this message board? Bullies?
 

nightbird42 said:   Should the retirement fund ever be loaned from to pay off debt? I have 50k in there.
Not for you, no. It would just enable you to run up the debt again.

Is 50k the entirety of your retirement savings, aside from the inherited 166k (that used to be much higher)?

I don't have any vested interest in whether you make the smart financial decision here or make a stupid financial decision. I've pointed out that you are hitting on multiple points that seem perfectly designed to get an emotional response out of FWF. Maybe you really are real, in which case I've given you solid advice. Take it or leave it. I have a feeling - if you are real - that me pointing out you could be a troll will just be another way for you justify why you won't do the right thing ("but the internet was MEAN to me! I'll show them, I'll take $8k out of my IRA and build a pool deck I can't afford!").

Do what you want, I (and others) have pointed out the correct financial decision here. If you choose to make the dumb decision, that is your choice.

SlimTim said:   
nightbird42 said:   Should the retirement fund ever be loaned from to pay off debt? I have 50k in there.
Not for you, no. It would just enable you to run up the debt again.

Is 50k the entirety of your retirement savings, aside from the inherited 166k (that used to be much higher)?

 Yes 50k is it. My work matches up to 4% so I need to take advantage of that.
 

nightbird42 said:   And why would anyone take advice form someone being such a jerk to them?

Haven't you learned anything about how people get defensive if you accuse them of something and any points you bring up are lost because they are so frustrated?

  
This isn't some touchy-feely forum. This is about money. You need to get knocked up side the head. Just look at your choices. You've already made up your mind that you're doing something, and they are all lousy. Do NOT spend the money. Live without. Chances are you've got enough waste in your current spending, and you just want to waste some more.

I'm getting the feeling that your wife doesn't work, yet your kids are in college. Make her go get a job.

magika said:   I don't have any vested interest in whether you make the smart financial decision here or make a stupid financial decision. I've pointed out that you are hitting on multiple points that seem perfectly designed to get an emotional response out of FWF. Maybe you really are real, in which case I've given you solid advice. Take it or leave it. I have a feeling - if you are real - that me pointing out you could be a troll will just be another way for you justify why you won't do the right thing ("but the internet was MEAN to me! I'll show them, I'll take $8k out of my IRA and build a pool deck I can't afford!").

Do what you want, I (and others) have pointed out the correct financial decision here. If you choose to make the dumb decision, that is your choice.

  
Obviously you have baggage regarding past users. Either that or you have been on so many message boards in your life that you are quick to point out troll. There is a saying I like. Being quick to judge racism where it doesn't exist is as bad as racism itself. In this case, you became the troll, at least temporarily.

Your advice was solid and I need to sit down and think about this pool deck and about our finances and make some major adjustments. I thank everyone and yes, I thank you too.

It sometimes is counterproductive to cry 'wolf!' prematurely, but you're right that it's because we've seen a ton of wolves fitting your pattern very closely. I'm not sure most are deliberate trolls, but people deep in denial are frustrating in a similar way. "Hey what's the smartest thing for me to do here? Keep in mind I'm definitely ruling out all smart options and am going to do something undeniably dumb." It's not an honest question, at best it's a search for validation of what you probably suspect isn't very wise.

You've only disclosed a glimpse of your situation, but what we've seen of your age, savings, and debts looks pretty dire.

nightbird42 said:   What is your issue with me and why do you keep calling me a troll?
I find this message board, and the very first time I post I am called a troll. And why would anyone take advice form someone being such a jerk to them?
Nomatter what i say you are going to respond by saying "see! I knew he was a troll"..

I hear you guys I really do, but have I walked into a surfing beach where only "locals" are allowed to surf? have I stepped on your territory and is there a rite of passage before I am "accepted" into the group? You do a great disservice by offering what looks like good advice but muddying it up by being accusatory. Haven't you learned anything about how people get defensive if you accuse them of something and any points you bring up are lost because they are so frustrated?

I appreciate the advice I really do. But is this a microcosm of this message board? Bullies?
 

  
This is actually not a Financial Advice Forum.  It is a Financial Deal Forum.  Stuff like Cheap Rates on Loans or Mortgages, or High Savings rates.

Who did you inherit the IRA from? Are you or is your wife the beneficiary? How old would the decedent be if still alive? How big are your RMDs (RDDs)? Why can't you use cash from your annual distributions to pay some or all of the credit card debt?  If you don't have any idea what I'm talking about, you're a troll.

DTASFAB said:   Who did you inherit the IRA from? Are you or is your wife the beneficiary? How old would the decedent be if still alive? How big are your RMDs (RDDs)? Why can't you use cash from your annual distributions to pay some or all of the credit card debt?  If you don't have any idea what I'm talking about, you're a troll.
  Wife is beneficiary, her Father died. If he was still alive he would be 86. Required distributions are somewhere around $8k to $10k per year. We can use part of our distributions for that yes, but want to eliminate debt right now.

nightbird42 said:   
DTASFAB said:   Who did you inherit the IRA from? Are you or is your wife the beneficiary? How old would the decedent be if still alive? How big are your RMDs (RDDs)? Why can't you use cash from your annual distributions to pay some or all of the credit card debt?  If you don't have any idea what I'm talking about, you're a troll.
  Wife is beneficiary, her Father died. If he was still alive he would be 86. Required distributions are somewhere around $8k to $10k per year. We can use part of our distributions for that yes, but want to eliminate debt right now.

You know you can take the RMDs at any time, in any increment, during the year, right?  From your comments above, it sounds like you are taking a monthly draw?  It doesn't have to be that way.  Just call whoever is holding the funds and tell them to send you the whole 2016 distribution.  Better yet, have him send it directly to the credit cards, NOT to the guy installing the pool deck. 

nightbird42 said:   
magika said:   
nightbird42 said:   Not sure what you mean by a troll? Isn't an internet troll someone who is just messing around and making stuff up? I am not. What is FWF???
Try living in the Los Angeles area, my example is quite common.

I am asking for advise here based on three options. We will be doing one of those three options. I am just asking if option 2 is the best one.

Obviously not getting the pool deck and not living beyond your means would be the best option but we are past that point. After this deck its time to buckle up and save.

  
Now 99.9% chance this is a troll. The bolded parts are further intended to just get a response. On the 0.1% chance this is real, let me respond:

Living in Los Angeles does not mean you magically get to buy things you cannot afford. You cannot afford a pool deck because you have credit card debt and don't have cash on hand to pay for it. A pool deck is a luxury item, and you are not in a financial position to be able to afford a luxury item. The three options you laid out are all non-starters. None of them is a good path, if you go down this path anyways you are simply doing what you wanted to do and make stupid financial decisions. You posted here to ask for advice, and you will be told what is the best financial move: neither option 1, 2, or 3. The only smart move is to not build a deck and pay off your credit card debt (and don't get into credit card debt again). No one is going to tell you what you want to hear and advise you to make stupid decisions. This board does not exist to condone/applaud stupidity.

What is your issue with me and why do you keep calling me a troll?
I find this message board, and the very first time I post I am called a troll. And why would anyone take advice form someone being such a jerk to them?
Nomatter what i say you are going to respond by saying "see! I knew he was a troll"..

I hear you guys I really do, but have I walked into a surfing beach where only "locals" are allowed to surf? have I stepped on your territory and is there a rite of passage before I am "accepted" into the group? You do a great disservice by offering what looks like good advice but muddying it up by being accusatory. Haven't you learned anything about how people get defensive if you accuse them of something and any points you bring up are lost because they are so frustrated?

I appreciate the advice I really do. But is this a microcosm of this message board? Bullies?

  
On the miniscule chance that this post is actually sincere: 

1. Take the money out of the IRA and pay off the credit cards.
2. Call the pool deck guy and tell him never mind, because YOU CAN'T AFFORD IT!

Simple rule: if you have credit card debt, you stop spending.  Period. 

Don't get the new pool deck. Reduce your spending in other areas (expensive cell phone plans, eating out, hobbies) and pay off your debt using your income. Contact your credit card companies and ask them to lower your interest rates, or transfer the balances to another credit card. That's the only reasonable plan.

cestmoi123 said:   
nightbird42 said:   
magika said:   
nightbird42 said:   Not sure what you mean by a troll? Isn't an internet troll someone who is just messing around and making stuff up? I am not. What is FWF???
Try living in the Los Angeles area, my example is quite common.

I am asking for advise here based on three options. We will be doing one of those three options. I am just asking if option 2 is the best one.

Obviously not getting the pool deck and not living beyond your means would be the best option but we are past that point. After this deck its time to buckle up and save.

  
Now 99.9% chance this is a troll. The bolded parts are further intended to just get a response. On the 0.1% chance this is real, let me respond:

Living in Los Angeles does not mean you magically get to buy things you cannot afford. You cannot afford a pool deck because you have credit card debt and don't have cash on hand to pay for it. A pool deck is a luxury item, and you are not in a financial position to be able to afford a luxury item. The three options you laid out are all non-starters. None of them is a good path, if you go down this path anyways you are simply doing what you wanted to do and make stupid financial decisions. You posted here to ask for advice, and you will be told what is the best financial move: neither option 1, 2, or 3. The only smart move is to not build a deck and pay off your credit card debt (and don't get into credit card debt again). No one is going to tell you what you want to hear and advise you to make stupid decisions. This board does not exist to condone/applaud stupidity.

What is your issue with me and why do you keep calling me a troll?
I find this message board, and the very first time I post I am called a troll. And why would anyone take advice form someone being such a jerk to them?
Nomatter what i say you are going to respond by saying "see! I knew he was a troll"..

I hear you guys I really do, but have I walked into a surfing beach where only "locals" are allowed to surf? have I stepped on your territory and is there a rite of passage before I am "accepted" into the group? You do a great disservice by offering what looks like good advice but muddying it up by being accusatory. Haven't you learned anything about how people get defensive if you accuse them of something and any points you bring up are lost because they are so frustrated?

I appreciate the advice I really do. But is this a microcosm of this message board? Bullies?

  
On the miniscule chance that this post is actually sincere:
 

  What is wrong with you people?

dcwilbur said:   
nightbird42 said:   
DTASFAB said:   Who did you inherit the IRA from? Are you or is your wife the beneficiary? How old would the decedent be if still alive? How big are your RMDs (RDDs)? Why can't you use cash from your annual distributions to pay some or all of the credit card debt?  If you don't have any idea what I'm talking about, you're a troll.
  Wife is beneficiary, her Father died. If he was still alive he would be 86. Required distributions are somewhere around $8k to $10k per year. We can use part of our distributions for that yes, but want to eliminate debt right now.

You know you can take the RMDs at any time, in any increment, during the year, right? 
 

  Yes, I am aware of that.
 

nightbird42 said:   
dcwilbur said:   
nightbird42 said:   
DTASFAB said:   Who did you inherit the IRA from? Are you or is your wife the beneficiary? How old would the decedent be if still alive? How big are your RMDs (RDDs)? Why can't you use cash from your annual distributions to pay some or all of the credit card debt?  If you don't have any idea what I'm talking about, you're a troll.
  Wife is beneficiary, her Father died. If he was still alive he would be 86. Required distributions are somewhere around $8k to $10k per year. We can use part of our distributions for that yes, but want to eliminate debt right now.

You know you can take the RMDs at any time, in any increment, during the year, right? 

  Yes, I am aware of that.

Then why do you have $16k in credit card debt and/or have to borrow to pay for the pool deck?  In other words, what happened to the 2016 RMD that could have paid for the pool deck or more than half of the credit card debt?

dcwilbur said:   
nightbird42 said:   
dcwilbur said:   
nightbird42 said:   
DTASFAB said:   Who did you inherit the IRA from? Are you or is your wife the beneficiary? How old would the decedent be if still alive? How big are your RMDs (RDDs)? Why can't you use cash from your annual distributions to pay some or all of the credit card debt?  If you don't have any idea what I'm talking about, you're a troll.
  Wife is beneficiary, her Father died. If he was still alive he would be 86. Required distributions are somewhere around $8k to $10k per year. We can use part of our distributions for that yes, but want to eliminate debt right now.

You know you can take the RMDs at any time, in any increment, during the year, right? 

  Yes, I am aware of that.

Then why do you have $16k in credit card debt and/or have to borrow to pay for the pool deck?  In other words, what happened to the 2016 RMD that could have paid for the pool deck or more than half of the credit card debt?

  Its still available, hence why I suggested pulling from my IRA as an option to pay off my credit card debt.

nightbird42 said:   I appreciate the advice I really do. But is this a microcosm of this message board? Bullies?
  Yes. However, a lot of people justify their asshole remarks as "tough love." I've been a dick to people here, and people have been a dick to me. Just have to realize it's the internet, and people behind a keyboard (myself included) tend to be jerks sometimes. Weed out the naysayers and hear the advice people are offering. With that said: you can't afford a pool deck, have way too little set aside for retirement for your age, the LA excuse is appalling, your $16k in credit card debt is nothing, and the fact that $16k in debt means you're maxed out is amateur-league, at best. Don't do the pool deck, pay off the CC balances with IRA money, live within your means. You're going to need all the money you can save between now and retirement--it won't be much.

nightbird42 said:     What is wrong with you people?
  Nothing (that's a lie). Look in the mirror. 

And some of the 166k in the IRA cant be used for retirement? I mean in 20 years, that $166k could hit one million plus, based on historical info.

nightbird42 said:   And some of the 166k in the IRA cant be used for retirement? I mean in 20 years, that $166k could be $700k.
  You are ignoring all the comments about your standard of living and focusing on whether you can retire on an inherited IRA that you are already using to fund your overspending?  I think that's why people are getting snarky.

Let's start over.  Where did the $16k in debt come from?

The $16k came from Disneyland annual passes, hotel stays, some minor trips, household renovations, etc.
We are well aware about how we are overspending. We are making some changes. Less trips, no more Disneyland passes, etc. We are done renovating our new house. We just bought the house last August of 2015.

nightbird42 said:   The $16k came from Disneyland annual passes, hotel stays, some minor trips, household renovations, etc.
We are well aware about how we are overspending. We are making some changes. Less trips, no more Disneyland passes, etc.

Well then, I'm done trying to help.  I'm gonna go pop some popcorn now. 

nightbird42 said:     Its still available, hence why I suggested pulling from my IRA as an option to pay off my credit card debt.
  "Still available?"  You know you have to take it, right?  If you haven't taken any distributions from it yet, you have to take the required minimum by the end of the year.
nightbird42 said:   And some of the 166k in the IRA cant be used for retirement? I mean in 20 years, that $166k could hit one million plus, based on historical info.
  Good luck with that.

nightbird42 said:   And some of the 166k in the IRA cant be used for retirement? I mean in 20 years, that $166k could hit one million plus, based on historical info.
  At 7% annual compound interest on $166k, you get $642k. Say you and your wife live until you're 90, that's another 34 years. $642k/34=$18,882 annually. Is that enough? That's also not considering your RMD between now and then. I didn't include the $50k 401k, since you specifically mentioned the IRA. However, $50k+20 years of $18k (sure the max will increase, but let's keep it basic) contributions is $360,000. So you'd have $410,000 assuming your investment return was 0%. If it was 7% and you maxed out the 401k every year for the next 20 years, then you'd have $931k. However, it doesn't seem like you want to max that out right now. Don't let these numbers fool you. 7% can be -7% pretty easily. Even $1.5MM over 34 years for two people is only $44k/year...again, for two people. You ain't rich just because you'd have a million or two in the bank.

First the Canadian with the truck and now this. What a great week. I'm grabbing some popcorn too, make some room for me on the couch dcwilbur.

Stubtify said:   First the Canadian with the truck and now this. What a great week. I'm grabbing some popcorn too, make some room for me on the couch dcwilbur.
 I seriously am not getting what is going on here or why this is so entertaining. And I wont dare ask either or feed you guys material anymore.
 

We are having a bad year, but historically VGHAX does very well. Almost a 20% return in the last 5 years.

http://www.marketwatch.com/investing/fund/vghax

Skipping 34 Messages...
Read this forum every week and you'll get the joke. I'll apologize on behalf of everyone who called you a troll. But their advice is still spot on.



Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2017