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Andy
Guest
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 Posted: Mon Sep 19, 2005 10:13 pm Post subject: Home loan Settlement |
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| I have received about $60,000 from a settlement and wondering what can be done with it. I am not married and also owe $34000 on my house. I pay $2000 as taxes a year. I plan to retire in 10 years or so and dont have much savings in my 403(b). Should I pay off my debt or invest the money? |
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 Samantha
Community Mentor
Joined: 16 Sep 2005
Posts: 1602
Location: MASSACHUSETTS
149.70 Dollars($)
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| Posted: Mon Sep 19, 2005 10:48 pm Post subject: RE: Home Loan Settlement |
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Hi Andy,
Welcome to MortgageFit Forums.
Most people receive a tax deduction due to interest payments on their mortgage. But your mortgage balance is so low that probably you may not gain much by itemizing the deductions on your tax return. Generally Standard deductions for single filers is $5000. Since you are paying just $2000 a year, your itemized deductions may not exceed your the Standard deduction. Even if it does exceed the standard deduction, the extra amount is not much large. So you have less or no tax savings from your mortgage payments.
Therefore I would advise that you pay off your mortgage first and then use the rest of the money in your 403(b) Retirement Plan. By doing so you will not only pay off your debt and build up a large retirement balance but also you can reduce your current income taxes.
Thanks,
Samantha |
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Jason
Guest
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| Posted: Tue Sep 20, 2005 9:38 pm Post subject: Contribution to 403(b) Retirement plan. |
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| I have decided to go for a 403(b) retirement plan. Can you advice on how much I should contribute towards the plan? I am yet to repay a car loan and I have also bought a house with a mortgage loan. |
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Jessica
Community Mentor
Joined: 08 Jun 2004
Posts: 814
Location: OHIO
195.97 Dollars($)
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| Posted: Tue Sep 20, 2005 9:55 pm Post subject: RE: Contribution to 403(b) Retirement plan. |
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Hi Jason,
Welcome to MortgageFit Forums.
The contribution to your 403(b) Plan depends on the age at which you have started to contribute. If you start your contribution at a fairly young age then you may not contribute more than 3%-5% of your pay till the age of 40. But in case you start your contribution after the age of 30 then you need to set aside a larger portion of your income. I would advise that you start contributing to 403(b) early,even if you have to pay off debts like car loans or even a mortgage loan.
Hope you will find this information useful. For further details on 403(b) Plan, visit here
Thanks,
Jessica |
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