Ep. 367: Questions with Kristen: “Queen of the Desert!”

Have a question? Get answers. Email us: askpete@petetheplanner.com

We’ve got a special, special treat for your ear canals today: Pete is joined by The Queen of the Desert herself, our very own financial expert, Kristen!

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No time to listen? BUMMER. Here’s some of what happened:

Show Notes:

Mailbag Question 1:

    • “My +70 year-old parents recently sold the office building where their medical practice was located for 30+ years. After fees and expenses, they were left with around $325,000 before taxes. They are taking their required minimum distributions from their Social Security Income and IRAs. They still have a nearly $600,000 mortgage on their current home as well as their vacation home. Should they use the proceeds to pay off their vacation home and reduce the balance on their current home? Should they put It In a savings account? Their current retirement Is around $2 million, but I think that’s low for their lifestyle. What should they do?
      • They’ve found comfort for decades a costly lifestyle and not true financial stability.
      • Kristen: I’m concerned. They’re pulling RMDs, SSI, and he’s still working. If they’re using all of that to live on now, there’s a lot of change that needs to happen. He’s 70+ and may not be able to work as long as he wants to.
      • They could sell the main home and live in the vacation home or apply the net of the windfall to the refinanced main home and have two more manageable mortgages.

Mailbag Question 2:

    • “Upon retirement, I have the option of taking cash payout from the pension of $233,000, the other option is a lifetime annuity with $1,271 per month. What is the better option? Is there the possibility of not receiving payments if the company folds? Advantages or disadvantages?
      • Kristen: If this is her primary source of income and her retirement, it would be hard to advise her to take the lump sum here, after learning how solvent the pension is.
      • Either take the $233K and try to create more out of it or let someone else deal with that risk: the annuity. The swings of the market and her risk tolerance heavily influence this question.

Helping real people solve real problems is what we love, and there’s more in the show. Listen, listen, listen!


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