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- Paying off mortgage or invest in annuity 3 answers
I am 28, single (with no lady in sight), and I earn a high salary in a tech job. After moving to a new job, I have a 401k account from my previous employer (through Principal, employed for 2yrs) sitting on ~$30k that I have not rolled over into my new 401k account (through Fidelity).
Which strategy makes more sense:
A: Rollover the cash from the previous account into the new one
I have no 'retirement' plans because I enjoy working and have plans to start a company, and essentially will be happy working until I die :)
I am maxing out my contributions to my current plan, and I already have a decent amount in there as well. I don't see this option favorably because I believe I can make better use of this money now, seeing as I am in a very good spot in my career.
B: Pull the money out and apply it towards my mortgage
I understand that pulling money from a 401k will reduce the quantity I receive, but as far as I see it this is not such a bad deal because it is like paying taxes on income. (Principal says I will lose up to 30%)
- 1 year old
- 3.875% fixed rate
- Started at $405k, owe ~$380k
- Initial downpayment was 5% when I signed, but at the time I only had about $15-20k saved up and was faced with the decision between moving/paying high rent or trying to get my own place. As a result of being under 20%, I am paying mortgage insurance of about $300/mo.
I've read many articles/questions about paying more towards your principal, and how it will shorten the length of the loan. I am unsure if paying a big chunk at once has the same effect as paying more over time.
BONUS! C: Pull the money out and use it as capital for investment purposes
I am wise with my money for the most part and I have no credit card debt. I will research other investments if this makes financial sense.
A personal Note
I come from a poor family and I am okay living a 'simple' life. If the world were to collapse I would be able to find happiness flipping burgers. My ultimate goal and dream, however, would be to help my parents pay off their house (FHB ~4 years ago) so they could finally have a retirement. I currently send $1000/mo to my mom for this very purpose.
I know it's naïve but I sometimes imagine walking in with a suitcase full of money and a stupid smile and being able to say 'hey guys, you can stop working now' :D
anyway. That's where I'm at. Wisdom?