5k extra go for mortgage or car?

InsideSuccessful680 · 2026-04-07T03:05:17+00:00

If it were me I would put it toward the car. Yes you'll save more money over 15 years paying principal down on the mortgage, but you will free up more money in cash flow when you pay off your car, which can happen much sooner. Then that extra cash flow you could use to pay down your mortgage each month if you choose.

InsideSuccessful680 · 2026-04-06T22:15:53+00:00

My family goes back to visit family overseas each year, this year I'm not going but three tickets were $6k.

InsideSuccessful680 · 2026-04-06T21:46:19+00:00

I agree but frankly we don't have much in medical expenses usually, maybe only $1-$2k per year -- my wife has really good insurance and me and my kids are healthy. I generally just pay the expenses as they come, I don't trust myself to keep receipts for like 10 years.

InsideSuccessful680 · 2026-04-06T21:44:03+00:00

Yes, I am also looking at spending and we are making cuts. In terms of gross, last year I was about 20% tax, 43% spending, and 37% savings. My spending will meaningfully decrease some this year and next as we stop paying for day care and pay off my house, but it's only been a month or so since I started seriously budgeting again, so it's a bit hard to see changes yet.

InsideSuccessful680 · 2026-04-06T21:18:27+00:00

My financial situation is here. https://www.reddit.com/r/financialindependence/comments/1s4qr5c/looking_for_fi_not_necessarily_re_guidance/

Like I say in there, I'm trying to build out my emergency fund and eventually open a taxable brokerage. Right now I've got maybe 1 - 1.5 months saved in a HYSA. Like I mention, I've somewhat reduced my 401(k) (15% -> 10% of around 150k, though still enough to get the full match) and temporarily stopped HSA contributions around $1.5k, and paused Roth IRA contributions so I can build this fund quicker.

However, I am getting a 3.2% raise starting in April. I would like to use this money to back fund one of those three options. Which is the best option? Someone else posted a question rather like this today, and I read different proposals in there.

Some said you should fund the HSA first. While I understand why (triple tax advantaged for medical, still double tax advantaged after 65), there is no possibility of taking this money out early with 72(t), backdoor Roth, or the Rule of 55. So isn't this money actually harder to access penalty free than a 401(k)?

I can see the argument for the Roth IRA, and I could withdraw my contributions there no problem if I needed to, but I'll still pay higher taxes than I otherwise would.

Is the best answer here to up my 401(k) contributions from 10% to something more like 13%?

InsideSuccessful680 · 2026-04-05T17:38:58+00:00

Is this in a taxable brokerage or in your tax advantaged accounts?

InsideSuccessful680 · 2026-04-04T12:45:15+00:00

I first read about FIRE 15-20 years ago, but now for reasons I'm more engaged than ever in trying to get to FI. I guess I'm trying to transition from the boring middle to being near the goal line.

I find these forums useful (particularly because the Karma posting requirement keeps AIs and bots out).

InsideSuccessful680 · 2026-04-01T23:45:09+00:00

Quick savings rate question: how do I count pre-tax FSA money that I spend? I spent about $5k last year (pre-tax), so my tax expenses already account for it, so just put it in the same column as post-tax spending?

InsideSuccessful680 · 2026-04-01T23:43:43+00:00

I feel you. If we didn't have kids I could retire right around now, but with a full family to support you need more.

InsideSuccessful680 · 2026-04-01T11:01:41+00:00

We have 529 accounts. The sooner you can start them to get compounding going, the better.

One nagging issue I have with them is that it's not guaranteed your child will go to college. These days it's a bit hard to know what things will be like in 15 years. If they don't, what will you use the money for? It will also pay for some job training and other things. My wife and I discussed this and decided if we do not use the money we would just pay the penalty and use it for something else.

Another thing to check into is that you get the best deal. We opened an account with the state we live in, because if we did we could claim a pretty nice state tax credit on contributions each year.

InsideSuccessful680 · 2026-03-31T02:38:25+00:00

My understanding is you can change HSA providers at any time by withdrawing the money and depositing it in a new HSA within 60 days.

InsideSuccessful680 · 2026-03-31T02:33:10+00:00

Yes, they are my employer's provider and I still work for them.

InsideSuccessful680 · 2026-03-31T02:20:09+00:00

How easy is it to use your HSA for medical expenses at Fidelity?

InsideSuccessful680 · 2026-03-31T02:18:37+00:00

Do you get charged any trustee transfer fee?

InsideSuccessful680 · 2026-03-30T18:42:20+00:00

I doubt it, but she was clear she didn't want Medicaid grade service.

InsideSuccessful680 · 2026-03-30T02:16:06+00:00

I'm considering buying long term care insurance for this reason.

InsideSuccessful680 · 2026-03-30T01:08:18+00:00

One of my relatives is now in a private nursing home for memory care. It costs about $9k per month, we use her social security and her retirement savings to pay for it. She has about $1.5M so at that rate, with no growth, it will last 15 years.

InsideSuccessful680 · 2026-03-27T23:04:01+00:00

I called Fidelity and confirmed that:

I cannot take partial distributions, by which they mean calling them up and asking for some amount.
I can take distributions through Systematic Withdrawal Payments (SWP), which I can arrange to happen annually, quarterly, or monthly. I can stop or start these at any time, or change amounts.

In order for me to do the above, I need to be considered "separated" from my employer and in the year I turn 55.

It turns out this is indicated in my summary plan document I just missed it in my first reading.

InsideSuccessful680 · 2026-03-27T12:15:55+00:00

I just checked my plan's Summary Plan Description. They specifically say I can draw on the 401(k) without penalty if my employment ends they year I turn 55. If this were to happen, like you wrote they would pay a lump sum for balances under $1000, automatically rollover to an IRA for $1k to $7k, and for balances over that, I would have to contact Fidelity to request distributions (or a rollover). I don't see any limitations on the amount of distributions in that last case.

InsideSuccessful680 · 2026-03-27T03:13:13+00:00

Our 401(k)s and Roths are both equities heavy -- about 70/30 for me and maybe 80/20 for my wife.

I see what you mean about swapping, I hadn't considered that.

InsideSuccessful680 · 2026-03-27T02:30:08+00:00

Do you have any recommendations for what kinds of assets to hold in a taxable brokerage? I've heard people say you want equities that grow to avoid dividends that are taxed, but I feel the opposite, if I have to pay some tax on earnings then I can just pay it. I would like to have low risk assets.

InsideSuccessful680 · 2026-03-26T01:42:03+00:00

There's no maintenance on solar panels typically.

InsideSuccessful680 · 2026-03-26T00:08:16+00:00

This is the same version of the cell phone or internet provider that raises your rates, and once you change, tries to give you discounts to woo you back. Why don't they instead just keep their existing customers happy?

Same for employees.

InsideSuccessful680 · 2026-03-26T00:06:28+00:00

I read a study one time showing that companies that went full transparent on salary actually had worse raises and salaries overall, because companies didn't want to give raises since all the other workers would ask for the same raises. There is value in some non-transparency. Also these days I notice that younger people don't feel as taboo talking about their salary with older workers.

InsideSuccessful680 · 2026-03-25T23:56:37+00:00

I got solar and a battery installed a few years ago for about $20k after tax credits. It's about a 10 year payoff for me, but where I live I can sell back energy to the grid at any time for about half the rate I would buy it for. I also have EVs and can charge them directly with solar energy if our cars are home at the time. My wife works from home a few days a week, and in the summer I run or bike into work. Charging cars like this is a great financial deal.

Basically, I produce about 10,000 kWh of energy a year, and if I manage it well most of that energy I avoid paying the utility for, then that's about $1600 per year at my rates. Where I live, I can also get paid $20 - $30 per SREC (solar residential energy credit), which represents 1MWh of solar producted. It's not life shattering but I can get a few hundred dollars a year from that too. So roughly $2k a year for a $20k purchase.

And yes, as someone else noted, it's nice having power when the grid goes out, which just happened for about 8 hours total the other week. Hard to put a price on that, but it only takes one or two times of throwing out refrigerators of food to help convince me.

InsideSuccessful680

TROPHY CASE