Ep. 162: Maggie is almost divorced and is ready for a fresh start

Meet Maggie.

Maggie’s main concerns, in her own words:

Hi Pete,
Discovered your podcast a couple of months ago and have been binge-listening.  I get something out of every single episode. I calculated my power percentage at 38%…and my MDD around 2026, but in tinkering with other retirement calculators I’m being told that I’m woefully deficient in my retirement savings.  As far as I can tell I’m either in really great shape or really terrible shape, depending on which calculator I use.  I looked at my budget based on your ideal budget worksheet, and I’m functioning within its guidelines.  

Here’s my situation.  46 yo.  Two kids (16 and 11).  Almost-divorced and 100% on my own with nobody to fall back on (husband, parents, etc).  Although I hope I’m not alone the rest of my life, I’m planning my finances as though I will be.  I’d like to leave my current job, but I feel trapped here by the pay and benefits that I would not replicate elsewhere.

No debt except for my mortgage ($1,500/month) and a car payment which I only have due to 0% interest ($353/month balance of $14,000).  (I know how you feel about that).  I could pay off the car but that would ding my emergency fund and I hate to do that.  I use my credit card for regular expenses and pay it off every month.

Goals

  1. Fund majority of undergraduate degrees for both kids at state college
  2. Retire at 62 in a location with a lower cost of living
  3. Accelerate payment on mortgage. 
  4. Travel

Questions

  1. Should I roll those Coverdells into the 529s?
  2. Am I contributing enough to the 529s?
  3. What is the best (low-risk) place to stash that emergency fund?
  4. Should I still be contributing to the Traditional IRA even though I’m maxing out the TSP?
  5. Do I qualify for an HSA?  I don’t have a high deductible on my health insurance.  Is there another option to pre-save for medical expenses in retirement?  If I don’t stay at my job until 62 I don’t get the health insurance with the pension. 
  6. Am I using my “extra money” in the wisest possible way?    
  7. Is it ever going to be “safe” to quit this job, take a pay cut, and still have a comfortable retirement?

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