Ask Terry Questions Retirement vs. Luxury Car

Retirement vs. Luxury Car

By Terry Savage on September 13, 2017 | Wild Card

Hi Terry. I'm hoping you can help me make a decision. I'm currently making six figures at my current job. After home expense contributions(mortgage, bills, etc.), son's college fund, 4% 401(k) contribution at work with 4% match, 100% ROTH IRA contribution, and 8 months of emergency savings I still have roughly a few thousand left each month. Since my car needs to be replace soon, I'm hoping to finance an Audi S4 at approximately 60K(about 1K monthly payment); I have excellent credit score. Can you please answer the following: 1) Do you think I should head in this direction? 2) If I head in this direction, I will still be able to increase my 401K contribution to 10% and still have some money left to keep building my savings. 3) If I head in this direction, how much do you recommend is a good car downpayment? You feedback would be greatly appreciated, Mark

Terry Says

Ok, I would be the last to deny you the pleasure of your success. And I'm assuming you only need a college account for one child. And that you will max out your 401(k). That said, I turned to my car expert -- my son-- to give you specific advice on your purchase.  He suggests the following: "Cars depreciate more rapidly than SUVs.  Consider the Audi SQ5 instead of the S4.  And always put down at least 20% so you are rarely likely to be upside down," Enjoy!

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