Have a question? Get answers. Email us: askpete@petetheplanner.com
Jump into the conversation with us! Gold-Star Gayle, from Austin, TX is back to share the wisdoms!
Don’t forget! HEY MONEY is your new secret weapon for advice in your personal finances.
No time to listen? BUMMER. Here’s some of what happened:
Show Notes:
Mailbag Question 1:
-
- “I’m 65, not working due to disability. Social Security Disability is $1,800 per month and liquid savings is $444,000 made up of a money market account, IRA and 401(k) all combined. Long-term disability payment is $4,000 per month (tax-free) and ends next year. I save that entire amount each month, and my bills are only $1,650 per month. My home, worth $250,000 was recently purchased. It is now rented out, covering the mortgage, taxes, and insurance. In terms of retirement plan, what can I do to maximize financials before I actually start collecting income, which is hopefully November 2021?”
- Gayle: There are so many things here that are great! This person doesn’t even have to touch their retirement income! I’m interested in knowing more about their home expenses; mortgage terms, maintenance costs, equity, etc. Also, how much of the money there is invest-able?
- Pete: Tax-free disability coverage from your employer is HUGE. Living below his means is so beneficial. But is the disability a debilitating one? Is there a plan to divest from the rental property as he ages?
- “I’m 65, not working due to disability. Social Security Disability is $1,800 per month and liquid savings is $444,000 made up of a money market account, IRA and 401(k) all combined. Long-term disability payment is $4,000 per month (tax-free) and ends next year. I save that entire amount each month, and my bills are only $1,650 per month. My home, worth $250,000 was recently purchased. It is now rented out, covering the mortgage, taxes, and insurance. In terms of retirement plan, what can I do to maximize financials before I actually start collecting income, which is hopefully November 2021?”
Mailbag Question 2:
-
- “I’m turning 52 and I make 10k gross per month. My husband is 53 and earns $6,500 per month. I’m thinking of retiring at 55, and I will get about 50% of my highest salary. I can access my 457(b) at any age without tax penalty and my husband and I will get lifetime free medical benefits. But if I retire in my early 60s, I get 70-80% of my retirement benefits. Our biggest expense is paying our youngest son’s tuition. He should finish college when I turn 55 and my expenses would likely drop to $3,000-4,000 per month, including mortgage payments. We have 10 years or $110k left on the loan with 3.25% interest rate and am adding an extra $100-200 month to the payment. My husband would prefer to join me in retirement ASAP. His income mostly pays for utilities and cars for us and our boys, which we expect will drop off when they are on their own. We have about $900k saved for retirement. Am I okay to retire at 55 or should I wait?“
- Gayle: There’s so much data here. In a nutshell, maybe she can retire first, but not both of them so soon. But once they boys leave, they could prioritize paying off their home early. Then in retirement, they both can plan to retire and do other things that are important to them; things that are not about the money – impact.
- Pete: They’ve done well. Living in Southern California and their house is nearly paid off. They can get their kids truly off the payroll and establish their own means of making living before they can move on and retire to volunteer and other things. GRIND!
- “I’m turning 52 and I make 10k gross per month. My husband is 53 and earns $6,500 per month. I’m thinking of retiring at 55, and I will get about 50% of my highest salary. I can access my 457(b) at any age without tax penalty and my husband and I will get lifetime free medical benefits. But if I retire in my early 60s, I get 70-80% of my retirement benefits. Our biggest expense is paying our youngest son’s tuition. He should finish college when I turn 55 and my expenses would likely drop to $3,000-4,000 per month, including mortgage payments. We have 10 years or $110k left on the loan with 3.25% interest rate and am adding an extra $100-200 month to the payment. My husband would prefer to join me in retirement ASAP. His income mostly pays for utilities and cars for us and our boys, which we expect will drop off when they are on their own. We have about $900k saved for retirement. Am I okay to retire at 55 or should I wait?“
Click PLAY below for the full show! And while you’re here, don’t forget to check out Hey Money!
Podcast: Play in new window | Download | Embed
Subscribe: RSS
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.