Married 26 y/o’s with 2 kids. We have have right at 100k in 401k’s and IRAs, and we also have a taxable account with around $60,000 in it. We have 2 debts at this time. A credit card with $6,000 on it that is 0% interest until June of 2023 and a vehicle loan for my wife’s car. It has a 5.4% interest rate with $17,500 owed and the note is a little more than $350 a month.
Right now, our taxable is down about 5k because of the market correction, and I don’t want to pull any money out at a loss but I also don’t like holding any debt. The car loan payment is a small fraction of our monthly take home (like 3%) and we will only pay $3,000 in interest over the life of the loan. The credit card, I’m not worried about. It’s interest free for another year and it will be paid off by then no matter what. In an average month we have at least 3-4K over expenses, retirement contributions etc that can be used as savings or debt payments. What would you guys do? I see 3 good options.
A.) Take the money out of our taxable account today and just pay it off.
B.) Cash flow paying off the credit card the beginning of 2023 (will only be a month or two), continue saving in the taxable and pay off the vehicle when the market rebounds.
C.) Keep putting everything in savings in hopes the market has come back by June of next year then withdraw and pay everything off.
What should we do? I don’t want to cut off investment contributions completely to only pay debt. I want to take advantage of buying as much as possible while the market is down.
Right now, our taxable is down about 5k because of the market correction, and I don’t want to pull any money out at a loss but I also don’t like holding any debt. The car loan payment is a small fraction of our monthly take home (like 3%) and we will only pay $3,000 in interest over the life of the loan. The credit card, I’m not worried about. It’s interest free for another year and it will be paid off by then no matter what. In an average month we have at least 3-4K over expenses, retirement contributions etc that can be used as savings or debt payments. What would you guys do? I see 3 good options.
A.) Take the money out of our taxable account today and just pay it off.
B.) Cash flow paying off the credit card the beginning of 2023 (will only be a month or two), continue saving in the taxable and pay off the vehicle when the market rebounds.
C.) Keep putting everything in savings in hopes the market has come back by June of next year then withdraw and pay everything off.
What should we do? I don’t want to cut off investment contributions completely to only pay debt. I want to take advantage of buying as much as possible while the market is down.