4/11/2024 10:10:05 AM Ikeh89 |
I would consider focusing on paying off the HELOC instead of maxing out retirement. That 8.25% rate is high. I am assuming you don't follow the Dave Ramsey ethos; however, your overall debt level is a tad high, some would suggest paying off your debts before investing. I personally would simply get the match, then destroy the HELOC, then the cars, then maybe up the retirement to 15% while killing the rest of the debt. |
4/12/2024 9:06:39 AM FatStacks |
Part 1:
I'm not necessarily a follower of his, but I definitely hate high interest rates. (The HELOC was only 3% at the time I took out the bulk of money, and then obviously the rates slowly crept up).
I waffled back and forth on paying that down over the last couple years. I'm okay with carrying that debt as long as I can make up that interest elsewhere. My crypto holdings have far outweighed any interest paid on the HELOC.
Ultimately my current reasons for NOT paying it down are:
- The money I'm putting into the Roth IRA/401k is probably getting close to the same 8.25% return (I hope), so in my eyes, it's kind of a wash.
- Most of the HELOC interest is tax deductible, so that's another factor.
- Finally; I *could* pay it off if I sold my crypto right now; I just have faith that crypto will easily beat that 8.25% in the long-term. |
4/12/2024 9:06:56 AM FatStacks |
Part 2 of 2:
- Crypto could just as easily go to zero, which would suck, but I'm willing to accept that reality. My backup to the backup plan, is my $30k company equity...Eventually I'll be able to pull that out for some profit (in 3-5 years), so I know I'll be able to cover the HELOC *at some point*.
What I can't do in 3-5 years is go back in time and put money into the Roth IRA, so I'm trying to start stuffing it in there while I can. I really wish I'd started sooner. And if I pare back my 401k contributions, I'm getting hit with 22% income tax on those dollars (I'm feeling that effect right now from last year). |
4/12/2024 9:16:48 AM FatStacks |
(I might take that 22% tax hit when I pull those dollars out, but also, maybe not. I still have ~20 years to figure that out, hah) |