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What to do....
Old 09-11-2017, 08:24 AM   #1
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What to do....

New to the forum, and after simply reading a few articles I have to say I'm a bit overwhelmed. I feel like I'm doomed to being homeless within a few years of retiring! I'm quite the laymen and don't do numbers or really understand financial principles. I'm 56 years old and have been at my present job for 22 years with a prominent international airline. With right at $250k in my 401k account as of now, I plan on working 6 more years until I turn 62. My company matches up to 9.3% of my contributions, which I'm very thankful for. I really have no idea how much I will be able to accumulate between now and then, but remain hopeful that I will ultimately reach the $500k mark by then.
My wife is unable to work right now, but may be able to after she has a couple of medical procedures that are already scheduled. We have a very young mortgage right now of $95,000 in metro Atlanta, that seems to be appreciating. I know that I have ZERO desire to retire in the neighborhood that I'm in, as the community seems to be deteriorating socially. (My wife disagrees).
Our goal is to ultimately sell this house prior to taking the leap, and to permanently relocate to a South Carolina community. We don't want anything over $150,000 of which I'm hoping to somehow pay-off between the 401k and the selling of this house. All I know at this point is that I simply cannot stay in my position at work for another 10 years. I struggle with my co-workers who all seem to be idiots, and come home mentally worn out. I have the "I really don't care" attitude from time to time, but know it's not going to be easy...
My health is excellent with no issues so far. I have a very strict doctor that takes good care of me. We have 3 vehicles yet to be paid off, and just one credit card under $4000, with a total debt of about $118k including our house. Goal is to be debt free except for the mortgage. Am I in for a crash landing?!?!
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Old 09-11-2017, 08:31 AM   #2
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Welcome to the forum, Phoelix. While you wait for members to chime in with their views, you might find this post useful Some Important Questions to Answer Before Asking - Can I Retire?
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Old 09-11-2017, 08:35 AM   #3
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Welcome to the forum! Do you have a good grip on what you're yearly spending is? This is an essential number to know before trying to sort out your questions. Will you qualify for full social security? Any pensions from your employer? Wife's SS? Pensions?
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Old 09-11-2017, 08:48 AM   #4
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Start with the health! One leg up already.

I won't give advice, because you'll get plenty of that, but would like you to know that you are not alone as one who does not have millions in the bank, and is not an investment guru.

While my wife and I are quite happy in our 80's, we didn't start out being independently wealthy, (nor is that the case today), but... we did retire somewhat early, and have managed to reach a level of comfort without debt or gainful employment.

With its' ups and downs, you might consider looking at our early years as one possible approach to being able to retire without working as a Walmart Greeter.

Sharing 23 years of Frugal Retirement

Best wishes to you and yours...
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Old 09-11-2017, 08:52 AM   #5
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Some items that need more info:
1. Do you have any pension when you retire? Does it include medical insurance?
2. Do you save at least the minimum to get the company match on your 401k? Do you do the over 50 catch-up provision to save additional?
3. As suggested, you need to know your budget.
4. Credit card debt is bad, pay that off ASAP.
5. What are interest rates on mortgage and car loans? Once CC is paid off, then can decide where to put extra money.


You are not necessarily due for crash landing, but I will say that you need to really up your savings, even without knowing your budget. You may not have an issue if you get decent pension and SS.
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Old 09-11-2017, 11:19 AM   #6
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Welcome and a couple of quick comments.

You've put a lot of info in one paragraph, it's a little hard to digest.

What is your home actually worth, I don't know what you mean by a young mortgage.

You probably work for Delta and they do have retirement bennies( anyway my DB has them but he's been with Delta since 1990), are you in the know about how much you will be getting?

Delta does do internal transfers, my DB has done a few over the years, maybe this could help with your outlook.

With just the details you've outlined here your plan doesn't look too promising.You have over 20K of unsecured debt, how long will to take you to pay this off? Do you have other people in your home, why do you owe on 3 different vehicles?
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Old 09-11-2017, 12:05 PM   #7
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Welcome and a couple of quick comments.

You've put a lot of info in one paragraph, it's a little hard to digest.

What is your home actually worth, I don't know what you mean by a young mortgage.

You probably work for Delta and they do have retirement bennies( anyway my DB has them but he's been with Delta since 1990), are you in the know about how much you will be getting?

Delta does do internal transfers, my DB has done a few over the years, maybe this could help with your outlook.

With just the details you've outlined here your plan doesn't look too promising.You have over 20K of unsecured debt, how long will to take you to pay this off? Do you have other people in your home, why do you owe on 3 different vehicles?
+1. What's up with the 3 car loans? They are almost as toxic as CC debt.

You might try and google Mr. Money Mustache. His blog is "straight and no chaser," but full of cost cutting and saving ideas. There are several other blogs that serve up the same message - how to LBYM.

Anyhoo, completely comprehend the burn out phase. Last few years were hard. Best wishes on getting to SC. Lot's of decent LCOL areas there.
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Old 09-12-2017, 12:56 AM   #8
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You don't have to learn it all at once, and you'll find a lot of differing opinions, anyway.

I keep telling myself that about my current situation.
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Old 09-12-2017, 02:50 AM   #9
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You don't have to learn it all at once, and you'll find a lot of differing opinions, anyway.

I keep telling myself that about my current situation.
+1. Maybe learn about getting out of debt first? Google it. Youtube it. and I agree to check out Mr. Money Mustache.

Find a way to keep working to age 62, then consider early SS. Good luck.
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Old 09-12-2017, 05:45 AM   #10
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I would start by dropping one car and paying off the CC's. For better guidance we would need to know your full NW, current spending, and all your potential retirement income.
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Old 09-12-2017, 06:00 AM   #11
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We have 3 vehicles yet to be paid off, and just one credit card under $4000, with a total debt of about $118k including our house. Goal is to be debt free except for the mortgage. Am I in for a crash landing?!?!
As was pointed out by others, this is one area where you can have immediate impact. Two people do not need 3 car loans, or the additional expenses required to have an extra car.

Eat the elephant in small bites, and you will be fine.
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Old 09-12-2017, 05:51 PM   #12
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+1. What's up with the 3 car loans? They are almost as toxic as CC debt.
+1
If I were in your situation I would sell the car with the highest yearly depreciation in order to bring down the 19K outstanding car loans. The car payment 'saved' could be used to pay down your cc debt.
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Old 09-12-2017, 06:15 PM   #13
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Wow 3 or 4 people beat me to it, so for a change Ill go soft on this. The 3 car loans are a less than ideal situation, Drive those cars till the wheels fall off. No more new cars for you. Make a WRITTEN budget. Then see where your money goes. Then you can trim some of the fat. Its easy for me to say it since im out of the rat race, But 6 years to go for a 56 year old is all down hill now. Your in the final lap, your 85 % of your working years done. Best of luck, you have almost arrived.
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Old 09-13-2017, 08:35 AM   #14
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Originally Posted by Phoelix View Post
New to the forum, and after simply reading a few articles I have to say I'm a bit overwhelmed. I feel like I'm doomed to being homeless within a few years of retiring! I'm quite the laymen and don't do numbers or really understand financial principles.
Good advice in the answers above. Let me focus on your first few sentences.

Everything is overwhelming at first. Wade in, extract what info you can, and ask questions when you've learned enough about a subject to know what to ask. You've taken the first step, the rest will actually get easier.

You should be able to avoid homelessness, if that's all you aspire to. You will need realistic expectations, but I'm thinking you can do better than that.

You don't need to understand too many financial principles. You're not in the category of investors who discuss the finer details of investment strategy here. The big picture will suffice. The only math you'll need is basic addition and subtraction. Maybe occasionally multiplication and division.

But you also won't be able to hide behind a professed stupidity. You need to understand where you stand, and where you want to be. You need to do it NOW. Pretending you're not able to comprehend the consequences of your decisions will not cut it. That third car loan, for example...

If you have a pension, there should be a way to get an estimated monthly payout projection. Likewise for Social Security. That gives you an income number you can work with.

Until then, work to eliminate debt. Start with credit cards, then car loans, and pay extra principle on the mortgage every month.

As Blue Collar Guy said, this all hinges on a WRITTEN budget, and with it, the ability to prioritize. I suspect you'll find a lot of things you pay for now that you can live without.

You've started late, but you're on the right path. Once you figure out what your personal plan is, you'll feel a LOT better about your future.
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Old 09-13-2017, 10:13 AM   #15
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Keeping it simple...here is the thinking that helped me early on.

During our earning years, we are brainwashed about assets/invest able net worth. "You need 3 million to retire...., etc". Forget that.

When you are retired, it is all about cash flow and expenses. As others have mentioned, get solid numbers on monthly income expected from SS and your pension. Then, look to a bare bones budget, and see if you need more income. If not, and if you can live on your SS/pension cash flow each month, you are golden.

If you are short each month, you will need to find additional cash flow. Dividends from your investments? Cashing out some stocks/bonds/mutual funds each month? Interest on CD's? Income from PT employment? This is where you really need to understand asset allocation and withdrawal strategy.

DW and I operate just fine on rental income, SS and my "hobby job" income. We have not had to touch our savings/retirement accounts in 4 years of retirement (semi retirement some would argue). But if we ever do, THEN withdrawal strategy will come into play.

It's the same old, KISS principal.
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Old 09-13-2017, 10:22 AM   #16
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Sharing 23 years of Frugal Retirement

Best wishes to you and yours...
+1 . a must read
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Old 09-14-2017, 03:30 PM   #17
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Wow 3 or 4 people beat me to it, so for a change Ill go soft on this. The 3 car loans are a less than ideal situation, Drive those cars till the wheels fall off. No more new cars for you.
In your 80s you hardly care what type of vehicle you have only that its low enough for you to get your gravitational challenged body into.

At least that's all that grandma seem's to care about, that and having people left on the list to actually drive to and visit.
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Old 09-15-2017, 12:09 PM   #18
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......We have 3 vehicles yet to be paid off, and just one credit card under $4000, with a total debt of about $118k including our house. Goal is to be debt free except for the mortgage. Am I in for a crash landing?!?!
Welcome, hope you stay around and read, even when you don't like what folks say. It will help in the end.

Your debt is killing your chance to retire.
You need to stop spending so much money on toys/cars.
I also think your plan is to retire at 62 as that is the earliest you can collect SS. But then you get much less forever per year, and that will be possibly your only income. Do you really want less ?

Like many folks will have said:
Pay off the Credit card fast, and stop spending so much so you never carry a balance on the card as you pay the full amount of the balance each month, and never pay interest charges again.

Get rid of 1 of the cars, and then drive the remaining ones for 12 years each.
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Old 09-29-2017, 05:12 PM   #19
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Read Your Money or Your Life, by Joe Dominguez and Vicki Robin. And start carefully tracking your expenses (your post doesn't say how much you spend every year ... do you know this amount, and where it all goes?).

Quote:
Originally Posted by Phoelix View Post
$250k in my 401k account as of now, I plan on working 6 more years until I turn 62. My company matches up to 9.3% of my contributions, which I'm very thankful for. I really have no idea how much I will be able to accumulate between now and then, but remain hopeful that I will ultimately reach the $500k mark by then.
Calculating the likely amount reached in six years doesn't seem very complicated; it's pretty simple math and any number of on-line calculators can help you. You just need to input the amount of annual savings (including employer match) and a conservative assumed rate of annual return; and then ensure that you actually contribute those savings. Much better to work this out now, and stick to a program, than to just "hope" that your savings will double within six years.

Quote:
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I have ZERO desire to retire in the neighborhood that I'm in, as the community seems to be deteriorating socially. (My wife disagrees). Our goal is to ultimately sell this house prior to taking the leap, and to permanently relocate to a South Carolina community.
Is moving to South Carolina a joint plan, or your plan? I.e., is your wife really on side, or does she want to stay put in Atlanta? The relocation issue needs to be resolved before you can do much real planning.

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We have 3 vehicles yet to be paid off
As others have said, this is a big 'red flag' that suggests to me that your spending habits badly need reigning in.

I would not sell one car, I would sell two (why can't you and your wife share one car, especially if she isn't working). Or better, sell all three if you can reasonably commute to and from work via car-pooling or public transit (apparently you live downtown).

Sacrifices will have to be made if you are to achieve financial independence in only six years: there's really no way around that.
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Old 10-04-2017, 10:31 AM   #20
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That written budget (pre-retirement and post retirement) is critical to do. You need to understand what your spending is today and trim all the fat you can find. Then forecast your spending in retirement.

You are going to want a super lean budget going forward with very little spending outside your needs. You need to find ways to save money and make money, let a few years of compound interest work for you.

One more suggestion might be to take on a part time job to supplement your income and give you more savings.
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