Author Topic: Pay off Car loan or not  (Read 703 times)

Maxman

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Pay off Car loan or not
« on: February 02, 2018, 10:45:27 AM »
Long story short. We have a car loan at 2.5% with about 15k balance. We came into some money about 150k spread out over the next 4 years (37.5k per year). My inclination is to put most in our Wealthfront account and keep about 20k for an emergency fund. We are in our early 60's and live off our IRA'a and SS. Our only debt is this one car payment. Do you think we should pay off the loan or not?

boarder42

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Re: Pay off Car loan or not
« Reply #1 on: February 02, 2018, 10:50:18 AM »
lots of other things should be solved here

1. why are you using wealthfront - you're retired and letting them leach your money read this and DIY http://jlcollinsnh.com/stock-series/
2. your actual question - i wouldnt pay that off the 10 year treasury yield is currently returning more that 2.5% just invest it - but do vangaurd instead of wealthfront b/c of 1.

Maxman

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Re: Pay off Car loan or not
« Reply #2 on: February 02, 2018, 10:55:11 AM »
I will read the link that you posted and get back. Currently our wealth front account is fee free on the first 20k we have less than that in it, even though going forward we would be subject to their .25% service charge.

boarder42

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Re: Pay off Car loan or not
« Reply #3 on: February 02, 2018, 11:20:39 AM »
https://www.begintoinvest.com/expense-ratio-calculator/

.25% on 150k over say 30 years vs just DIYing - 59k dollars over 30 years over 1/3rd of the money youre getting given to you.

Where are your other accounts held and maintained - maybe worth evaluating and moving those to vanguard as well.

Maxman

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Re: Pay off Car loan or not
« Reply #4 on: February 02, 2018, 12:53:08 PM »
The bulk of our money 97% are in vanguard 3 funds VTSMX, VGTSX, and VBMFX 42.5%/ 22.5%/ 35%.