Retirement Dollars --> Energy-Efficient Techno Purchases

[bee13]

How many of you have tapped your retirement accounts to fund environmentally-responsible purchases such as hybrid or electric vehicles, solar hot water heating, photovoltaics, wind turbines, hydro-electric or other renewable energy systems for your home or business?

How were you able to justify the numbers so that borrowing or completely withdrawing a portion of funds from your 401(k), IRA or other retirement account made sense?

[boulder_bum]

I invest some of my discretionary income to invest in speculative hybrid battery stocks. Does that count?

[hiremichaelreid]

Yes, but I will only INVEST,if it means I come out ahead in the end, financially.

AFAI concerned, the Prius will save me money. I'm happy to make any such INVESTMENTS that make or save me money.

Ecology IMO MUST follow economy. If that means governments must give tax breaks or pass eco laws or oil prices must go up, so be it.

[efusco]

I came just short of saying "absolutely not"...I definately would not tap into 401K or anything where I'd take a front end financial hit for early withdrawl as long as the long term interest hit.

But we do some discretionary investing in stocks and such and I'd tap into those funds for the right project.

I also invest in at least 2 alternative energy mutual funds.

[tripp]

Yeah, I'd earmark discretionary funds. Put them in a relatively liquid/safe investment while saving up for purchase whatever. I wouldn't want to use retirement funds because of the penalties. Just be patient and save up da monies in another way.

[SSimon]

I guess every environmentalist has their limits as I would be hard pressed to tap into my retirement security to invest in environmental upgrades to my house. There would have to be a consideration that the purchase would save me money to the degree that my retirement money should realize in gains. If someone lives life with conservation in mind, that ratio becomes harder to realize.

[skruse]

We try to invest in environmentally responsible funds, both retirement and nonretirement. We live in an energy efficient home (Energy Efficiency Index = 1) and are in the process of building an energy positive home (produces more than it consumes) on the South Fork of the American River in the Sierra Nevada. We will have photovoltaics, Thermomax for hot water and radiant heat, a clerestory (natural light) and ICF walls. Whether it is investing, purchasing or living, you need to model what you teach.

[FL_Prius_Driver]

Good planning is more than figuring out a Return on Investment. You can calculate that an electric car does not give the ROI desired and claim it is foolish to spend the extra money. A couple of years later you then find out that gas rationing prevents you from driving for any purpose other than core necessities, even though the ROI calculations still hold.

Back when I got the 2001 Prius, I was told that the ROI does not add up. That did not stop me from making the right decision. Now the stakes are getting much more serious. Don't place too much faith in ROI calculations.

(Hint-Account for Black Swans)

[galaxee]

yikes... cashing a 401k is imo the very last ditch option. have you run numbers? is the gain going to recover your losses from the early withdrawal penalty and lost growth in your retirement funds?

depending on your age, i bet taking out a loan would cost you less in the long run.

[bee13]

Originally Posted by galaxee

yikes... cashing a 401k is imo the very last ditch option. have you run numbers?

galaxee,

My goal in starting this thread was to sample how others viewed borrowing from or outright robbing a chunk of money from pure retirement accounts (not necessarily discressionary investments) to pay for the energy conservation or production equipment now available on the market (including the Prius). I have done some research, run a bunch of scenarios on paper, and have even spoken with the department head of renewable energy at the Utah Department of Natural Resources about the feasibility of installing a 3.5 - 4.0 kWh PV system on my house in Utah. This system would primarily be used to run back-up power to a couple of refrigerators and a freezer (all EnergyStar) and some light circuits running CFLs, a household Local Area Network, and secondarily as a fueling source for a PHEV when it is successfully marketed. The ranking would likely do a flip-flop with fueling the car eventually becoming the primary reason for the PV system as auto fuel prices soar.

As far as the system purchase and installation costs go, at present it's not a smart economic choice in my area since cost/kWh of grid supplied coal-fired electricity is in the 8.5 cents neighborhood. Even with the meager federal and state incentives for such systems I would still be looking at $23-25k out-of pocket with a ROI approaching 20 years. Now, I am a long-term thinker and planner but this is a bit of a stretch, not withstanding what FL_Prius_Driver had to say in his post above.

Using retirement funds as a source was something I also looked at on paper and for me, just didn't "feel right," if you know what I mean. My goal is to find a way to buy and install the stuff without taking a loan, and it looks like saving is the best choice. Additionally, fed and state incentives may have improved by the time I have saved enough dough. I could try to justify stealing from my retirement accounts all day long, with energy prices going ballistic and all, and the future looking more and more like rain, but under the present conditions I just can't convince myself that it's a route I should take.

I just wanted to bounce the idea off you guys and see what came back...