Author Topic: Case Study - August - December Romance - How to Retire?  (Read 4235 times)

Lauran75

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Case Study - August - December Romance - How to Retire?
« on: June 10, 2017, 10:14:16 PM »
The purpose of this case study is that I would like to figure out the best way to manage our assets/income, so that DH can retire in 11 years (or sooner) (if he makes it that long), and I can retire in 21 years. (I carry the insurance) Sooner would be preferable - but due to health considerations, we must have health insurance.

So .. some background.

My DH and I have been married for just over a year. He is 50 and I am 41. DH has been a pizza delivery driver for the past 23 odd years, and before that he owned two different pet store businesses and dabbled in day trading. He has never had a job where they had any kind of benefits, and has never started any kind of retirement funds. He did have a good sum of money in mutual funds at one time (day trading) from the sale of his second business,  but that got eaten up in several bad investments and other circumstances. To sum it up - he has no retirement funds or other investments solely in his name.

I started my working life as an elementary teacher (total of 8 years), then was an admin assistant for a few years, and then a school librarian for a few years, and am now an office assistant. (Talk about a diverse income range ...) I had some financial setbacks of my own in my mid-twenties due to some unwise financial decisions, and trying to transition out of teaching ... However, my dad had his head on pretty good when it came to finances (not my mom so much ...) and he drilled it into me the importance of saving, and saving early. So from the time I had my first full professional job, I was saving at the company match, and then adding to it each year.  When I worked at a place with no retirement  benefits, I started a ROTH of my own. I never put more than maybe $2400 in a year in it, but I was doing what I could.

About 5 1/2 years? ago my uncle got really excited about a particular stock. He got my whole dad's side of the  family SUPER excited about the stock. In fact, most of them put ALL their retirement funds into this one stock. I hesitated on doing that, but did decide to play $1000 on it. Well ... that stock we bought into around $20 - 32, is now getting darn near $400. My dad and mom divorced before all of this happened with the stock. About 6 months or so after my dad invested, he passed on. His stocks were worth around $4500 at that time. My brother wanted me to have the stocks, and he took the motorcycle. So ... going into marriage I had a considerable amount of retirement investments and non-tax sheltered investments. (I had moved some of the non-tax sheltered stocks into a ROTH IRA to get the full tax saver's credit one year.)

My DH's money style has been to pay his bills, and then use what's left and not worry about it. (This has caused some bills to NOT be paid over the years - not because he couldn't afford to, just he couldn't be bothered.) My style is ... well, YNAB. I have used the program almost since its inception. I have tons and tons of categories, and lots of "possible" scenario budgets. I am the CFO of our family. :) DH was happy to let me be in charge, with some caveats. If I had our income to do with exactly how I want, there would be some changes made. However, DHs made lots of compromises, so I feel its necessary to also make compromises.

(Note - DH and I knew each other for over ten years before getting married. After we were engaged I told DH my net worth. He was totally flabbergasted. He knew I had savings, and he knew that I was careful with my money, but hearing the numbers ..)


(Note 2 - DH has some health concerns. He is 6'3 and about 400lbs. He has rheumatoid arthritis, had a reverse shoulder replacement about two years ago, and injured his other shoulder a month ago (and is starting PT for it this week.) This is why I say .. if he makes it to 62 (working as a pizza driver, or ... just in general.)
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Income:
DH (varies) ~2500/month (net - includes gas allowance)
Me - ~1500/month (Net after -7% defined benefit plan; -$185 457 Traditional/ROTH; $132 health ins.; $60 FASA; ~$4 life insurance DH )

Liabilities:
House - $110k ($30k equity - no PMI, No escrow.)

A bunch of cash back credit cards that I pay the statement balance in full each month (never pay interest), and have completely accounted for in the budget. So, I don't really consider them a liability, but they do subtract about $2120 from our net worth.


Assets:


Current job Defined Benefit Plan (60% Vested - 100% Vested in 2 years) - $12,324  (My employer puts in 9%, and takes 7% from my salary)
Current job 457 - Total - $3925.91 -- After tax basis (ROTH I think) $1425
Vanguard ROTH brokerage - $42,967
Vanguard Traditional brokerage - $93,935
Brokerage - $56,456
Checking - `25,000 (currently in a Kassasa account earning 2.5% - am looking at one paying 5% up to $10k)
Brinks Mastercard PrePaid - $1000
Cash on hand - `$3200 (DH has a thing about having cash available to buy stuff off Craigslist, etc ... a compromise.)


A snapshot of our budget for June:

Immediate Obligations

Mortgage - 526.67
Extra Principal - $25 (am thinking of increasing to $50)
Home Insurance - $60.84 (paid about $700 for this year.)
Property Tax - 219.22 (paying $1106 by August 1 - have $887.78 saved - this number will have to increase in August because our property evaluation went from $113k (prior to sale) to $140k.)
Natural Gas - 33.67
Garbage - $21
Electric - $54.14
Phone (Ting - 1 smartphone, 1 flip phone) - $45.14 (on the high side - usually under $40)
Water - $35 (billed bi-monthly)
Internet/Cable - $65.71 (Cable was a compromise. Internet is expensive here! UGH!)
Netflix - $10.70 (compromise)
Groceries - $300 (usually closer to $200, but like to have room when needed.)
Car Gas - $300 - (I get one tank a month usually - DH gets the rest)

True Expenses
Car Ins (me) - $30.46 (paid $347 in May for 1 year of full coverage)
Car Ins (DH) - $52.67 (Paid $200 in April for 1 vehicle liability only, another $62 in June for 2nd vehicle (truck) - 6 month premiums))
Car Maintenance - $100 ($292 saved)
Car replacement (me) $75 ($525)
Car replacement (DH) $125 (2562)
Car tax/license - $80.77 (due in August - $438 saved)
Food handler license - $2 ($22)
Household - general $100
Medical - deductible qualifying - $25 ($2495 -- have a $4000 family OOP deductible)
Medical - non-deductible - $25 ($122.44 saved - vitamins, cough syrup, etc)
Pets - cats - food/litter - $30
Pets - cats - medical - $200 ($1045 saved - goal of $2000)
Pets - non-cat food/bedding/shelter - $5 ($102.63)
Pets - non-cat medical - $$5 ($15)
Software Sub (YNAB) $3.75 (28.33)


House
Home Warranty - $46.25 (just paid for second year - $555)
Outside appliances - $0 (just bought lawnmower, weed-eater, leaf blower in May)
Appliances - $100 ($216.89)
Flooring (bathroom, remove carpet, etc) - $100 ($361 - goal $3000)
Snowblower - $100 ($200 - goal $600)
Riding lawnmower - $100 ($770 - may be moot point since I may be taking over lawn-mowing)
Fence - $100 ($4145) (may move riding lawnmower money here)
General maintenance - $80 ($165.60)

Quality of Life Goals
DH retirement - $185 (currently in cash now) ($3555)
Emergency Fund - $50 ($1900)
Emergency travel - $0 ($1000)
Car/House deductible - $50 ($2450) (goal $4000)
Vacation - $100 ($126) compromise
Planet Fitness (me) $11

Just For Fun
Me birthday - $5 ($30 - December)
DH birthday - $6.12 ($47.76 - August)
Date Night - $75 ($78 .. compromise)
Catifying - $100 ($455 - goal $3000 - putting shelving up for cat walkway, etc)

My stuff - $200*
DH's stuff - $200*

*Stuff covers - Tithe/offering for me, phone purchases, computer equipment, beauty related stuff, clothes, individual eating out / junk food purchases. For DH its mostly electronics, new tv,
boat, soda, day trading investments, etc.

Originally there were categories in the main budget for most of this - but then DH spoke up that he didn't feel it was fair that we were putting $160/month to tithe/offering from our joint budget when it was my thing. I compromised by doing away with many shared categories and lumping into Stuff.

Vehicles - Please remember my DH is a delivery driver. It is a need to have two vehicles.
All are paid for.

DH#1 - 2001 Prizm
DH#2 (needs new transmission ...) 2002 Honda Civic
Shared #3 - 1996 Nissan Hard body truck
Me #4 2010 Toyoyta Yaris

*Reason for truck (paid $1100 for it in April) mainly for hauling stuff too big for our cars, or yard waste to the dump, etc. (has been used for these purposes at least 7 or 8 times so far) Also serving as second working vehicle for  DH - before he'd use my car ...

Although I work for the city bus and could ride it for free, I'll be the first to admit that our bus system here is majorly inconvenient for many people. It's also not that great for biking.
(We live in Nebraska.))


Pets -

We have 7 cats - all were strays or rescued from going to the pound. 1 was mine previously. DH knows we WILL NOT be adding any. DH is also into turtles and chickens and fish ...

Before we were married, DH was fairly active in buying/reselling home audio and car audio stuff. We have a basement full of his electronics stuff. At some point he's going to start selling again.

I've done sites such as Swagbucks for years. This year I have added a few more sites and am making anywhere from $100 - $200 month extra. DH calls it my funny money and says its mine for whatever. If he sells any electronics he bought after marriage - he gets to keep that money. (he doesn't have a boat yet - just wants one - another reason for truck) I'm considering doing VIPkid tutoring ten hours a week to add more to the combined budget.

I know DH is eligible for the catch up contributions for IRA, but am not sure where to get the money from to do it.

My big worry is not knowing how long DH will be able to physically keep working. He's super intelligent, but has probably buttonholed himself into not being able to get anything other than delivery or possibly hotel night clerk jobs. Selling the electronics was a good side gig, but I don't think it would come anywhere near making up for his current income. On my income alone, we would not make it. (gas would go down, but food would go UP, insurance and registrations  would go down maybe ...) (He has an Associate in Business Admin from 2005?)

Sorry for the wall of text. I tried to think of everything I could to give the big picture.

Meadow Lark

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Re: Case Study - August - December Romance - How to Retire?
« Reply #1 on: June 11, 2017, 03:58:06 PM »
Okay, I need a summary -
You have a monthly income of $4000
What is your monthly outflow (not including investments and extra principal on house)?
What would you estimate your monthly outflow if retired?
What is your monthly you are investing?
What is your total net worth?

The good - you have around $300k networth (estimating without a calculator) and (I am assuming by your assets and income) you are excellent at living a frugal lifestyle.  I have zero doubt you could figure out how to both retire in 11 years if you choose to.

Gone_Hiking

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Re: Case Study - August - December Romance - How to Retire?
« Reply #2 on: June 11, 2017, 10:44:49 PM »
Hello Lauran75,

Thank you for sharing your situation.  Here are my initial observations.

I've done a quick sum of your June outlays and all the expenditures add to $4164, which is larger than your combined take home pay.   Since this is a one-month snapshot and not a monthly average, it is hard to tell whether this is normal or an aberration.

Your assets sum up to $239K, not including the house.  Not a bad place to start.

Now, let's look at your savings rate.  At this time, 17% of your gross income is going to the pension.  9% contribution from the employer is awesome.  However, outside of the retirement accounts and contribution to future car needs,  specific savings for the future amounts to $235, which amounts to only 5% of your take-home pay.

You state that DH might retire in 11 years.  The good news is that your current take-home pay will cover all the items in Immediate Obligations and True Expenses categories should he stop working even sooner.  The challenge, however, is that, at that point, your budget basically be your take-home-pay and nothing else.  You could add income from your holdings.  Your current holdings, even without any additional contributions, could grow to some $595K assuming 8% portfolio growth, and would generate  $1983 a month at 4% withdrawal rate, which would be more than DH's current take-home pay.  So, as long as you're working, things would be well.

Things would not be as rosy should you decide or have to stop working.  That might be years before you can start taking the pension, even if you are fully vested.   So far, all the assets we have looked at came from you.  Your DH has some $3K for retirement.  Taking the current state of his retirement stache and adding the $185, it looks that in 11 years he will have $47K, assuming optimistic 8% portfolio growth.  That, in my view, is insufficient to provide the added security you both will need in case something happens to your earning power.  Upping the DH's - or yours! - IRA contribution is paramount.

Some suggestions:
In the House area, there are several $100 item contributions to various future purchases/projects.  Redirecting the riding lawnmower contribution to snowblower would free up $200 once snowblower fund reaches the goal.  Can you reshuffle the priorities and free up some money here? 
Your and DH's fun money adds to $400.  That is substantial.  I understand some of that is tithing, but there seems to be an opportunity to redirect some of that money to retirement instead.  How much does the electronic trade your DH does bring in?
Perhaps you might bring in some extra funds.  With your teaching background, would you consider tutoring?



Timmm

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Re: Case Study - August - December Romance - How to Retire?
« Reply #3 on: June 12, 2017, 10:42:41 AM »
Ha, I am also on the August end of a relationship with the same age gap! We're a bit older than you two and the differences pile up after that, but she married me for my insurance (long ago).

I'm not sure I followed exactly what your hot stock investment added up to, but I'd recommend shifting out of that quickly if you still have a big chunk in that one. You got very lucky, but you'll only stay a winner if you take those winnings out of that kind of gambling while you're ahead. A cheap index fund would lock you into your big gains.

Dicey

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Re: Case Study - August - December Romance - How to Retire?
« Reply #4 on: June 12, 2017, 11:06:07 AM »
My  strongest recommendation is that you get serious about finding a better paying job. It will make your finances future a lot easier.
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pbkmaine

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Re: Case Study - August - December Romance - How to Retire?
« Reply #5 on: June 12, 2017, 11:09:36 AM »
If you decide to sell your highly appreciated stock (and I think you should), please meet with a CPA to do some tax planning. There are ways to structure capital gains to minimize taxes.

Lauran75

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Re: Case Study - August - December Romance - How to Retire?
« Reply #6 on: June 12, 2017, 03:07:02 PM »
Thanks Meadowlark,

A rough estimate of actual expenditures (not including EF savings or DH retirement savings, house savings, etc.) is ~$3200

If retired, food would go up (DH eats a lot of food from pizza place), and gas would go down maybe by half
(DH would want to do more road trips) otherwise, not much would change - so maybe ~$3000/month actual expenditures

At work I'm investing about 27% of my salary (9% from employer, 7% from check, plus an additional $185/mo).
We're setting aside $185/mo to be eventually put into a ROTH most likely for DH. So ... about $600/month

Someone below figured out the networth was about $239k.

I'd love to retire in 11 years, but the health insurance aspect scares the daylights out of me. Especially if DH continues down the current health path.

----


Gone_Hiking

My salary doesn't vary more than a few dollars each month (except for 3 paycheck months), but DH's can vary between $200 - 400+. May was a good month for tips, so his income was up. I used actual income from May to budget for June. I did forget to include $50 in interest, and some cash back rewards. (~$100)

$2400 was an average for DH's income.

I'm not sure what all you included in savings for future? Many of our categories are saving for future expenses.. ?

Losing my DH's income is a big worry for me. Because as you pointed out, my income barely covers just the actual monthly expenditures, with nothing left for savings.

Yes, the picture definitely isn't good if I stopped working. Lose health insurance, life insurance, etc. I wouldn't able to take money from the pension until 55.

I agree definitely - need to up our retirement contributions to make things work.

We right now are hoping to have a fence built - still waiting on the exact estimate. We may or may not have enough for it. If we do, then there will be some reshuffling of money. I try to put 3% of our house purchase price into the House category - approximately $350/month. Then divide that up into priorities. We put some extra in there this month because nothing went in there in May to cover DH not working a week in April when we were in California.

Yes, it is a lot - $400. If my DH didn't feel so strongly about my getting the $160 towards tithing/giving, then maybe we could repurpose most of it. We started out with $40 - $50/month for spending money, and then we had separate savings categories / spending for phone replacement, computer replacement, etc. I eliminated those categories in order to come up with the extra $160 to match the tithe/offering. Does that make sense?

Yes, I am looking into doing VIPkid tutoring (online tutoring of Chinese kids in English.) I just have to figure out a reliable method of keeping the cats out of the space I'd probably use for it.

When DH was doing his electronics side gig, it was bringing in around $3 - 4k/year - some years more like $6k. He says the market is really bad right now for it. I know only what he has tried to teach me about the stuff.

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Timmm -

I'm actually not exactly sure of how much of our networth is in that either. DH and I were just talking this morning about whether or not we should sell some of it and reinvest in something else. I sold some at $239/share for part of our down payment in March, 2016. Today that same stock is sitting at $359/share.

Tax consequences and the stock money mostly being my inheritance both make it really, really hard for me to think about selling. Especially since my brother so generously let me have all of it. I'd hate to make a mistake with it.

---

Dicey -

Yes, that definitely would be a good way to fix this. :) I really don't like some aspects of my current job, but the benefits are amazing. So I have been searching for something else within the city government - so I can keep my benefits but get a better pay rate and maybe something more interesting. I have had two interviews for positions, but so far no luck. :(

I really don't want to go back into teaching, even though my salary would pretty much double. (Master's degree, plus a total of 12 years experience including school librarian.) I'm not sure if I even could go back - my knowledge base is really rusty and my TX school librarian license is expired (I have a lifetime teaching one though from TX.)

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pbkmaine - Yes, I think I definitely would do that if/when we go that route. When I sold the stock for the house purchase I was able to minimize the capital gains (very little was over the 15% level that got taxed.) Well, for state taxes we got socked, but Federal it didn't hurt us too much.


Thank you all for your ideas/questions. I hope I answered everything.

 




Dicey

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Re: Case Study - August - December Romance - How to Retire?
« Reply #7 on: June 12, 2017, 03:27:41 PM »
Dicey here. I want to apologize because on re-reading, I think my answer sounded curt, when brevity was the intention. I think a person with your credentials and experience should not have too hard a time making more money is all. I understand good benefits are, well, good, but lots mo' money is even better. Can you start looking for things up the ladder with your current employer? $36k seems like they're the ones getting the best end of that deal.
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Lauran75

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Re: Case Study - August - December Romance - How to Retire?
« Reply #8 on: June 12, 2017, 06:26:26 PM »
Dicey here. I want to apologize because on re-reading, I think my answer sounded curt, when brevity was the intention. I think a person with your credentials and experience should not have too hard a time making more money is all. I understand good benefits are, well, good, but lots mo' money is even better. Can you start looking for things up the ladder with your current employer? $36k seems like they're the ones getting the best end of that deal.

Hi Dicey - No worries. :)

My problem is two-fold - 1. Lack of confidence / look like I'm much younger than I am / NOT good socially (though people consider me friendly) and  I also have a speech impediment which rears itself once in awhile, embarrassingly in front of co-workers. 2. I'm kind of a weird aberration ... don't wear makeup, don't drink, don't eat meat, don't do business/work from Friday night to Saturday night ... etc. I also am not a good dresser nor am I good at doing my hair. In other words, I don't look like a 41 yr old professional. I try to look nice, but I'm definitely not my mom who always is dressed to the nines.

These things make it hard for me to find a job in the first place, and then the Interviews .... Ugh.

I have  been looking for the past year. There's been about five openings I applied for, got interviews at two places.
« Last Edit: June 12, 2017, 06:31:03 PM by Lauran75 »

SwordGuy

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Re: Case Study - August - December Romance - How to Retire?
« Reply #9 on: June 12, 2017, 06:48:03 PM »
You have 4 cars for 2 people?   

Lauran75

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Re: Case Study - August - December Romance - How to Retire?
« Reply #10 on: June 12, 2017, 08:05:04 PM »
Yes. 3 working and 1 not. My DH is a delivery driver - he has to have an extra car on hand in case one is out of commission. Delivery puts a lot of wear and tear on a car. I've been trying to convince him to sell the Honda - but he's sure he'll find a good deal on a transmission ...

pbkmaine

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Re: Case Study - August - December Romance - How to Retire?
« Reply #11 on: June 13, 2017, 05:49:10 PM »
Dicey here. I want to apologize because on re-reading, I think my answer sounded curt, when brevity was the intention. I think a person with your credentials and experience should not have too hard a time making more money is all. I understand good benefits are, well, good, but lots mo' money is even better. Can you start looking for things up the ladder with your current employer? $36k seems like they're the ones getting the best end of that deal.

Hi Dicey - No worries. :)

My problem is two-fold - 1. Lack of confidence / look like I'm much younger than I am / NOT good socially (though people consider me friendly) and  I also have a speech impediment which rears itself once in awhile, embarrassingly in front of co-workers. 2. I'm kind of a weird aberration ... don't wear makeup, don't drink, don't eat meat, don't do business/work from Friday night to Saturday night ... etc. I also am not a good dresser nor am I good at doing my hair. In other words, I don't look like a 41 yr old professional. I try to look nice, but I'm definitely not my mom who always is dressed to the nines.

These things make it hard for me to find a job in the first place, and then the Interviews .... Ugh.

I have  been looking for the past year. There's been about five openings I applied for, got interviews at two places.

Your look can be fixed. Ask your mom to help you do a makeover. I am  a shorts and t-shirts girl myself, but when I worked on Wall Street I "dressed to the nines" like your mom because it was expected. A professional look will also give you more confidence.

plainjane

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Re: Case Study - August - December Romance - How to Retire?
« Reply #12 on: June 13, 2017, 06:22:28 PM »
I have  been looking for the past year. There's been about five openings I applied for, got interviews at two places.

Getting 2 interviews off of 5 applications is a great ratio.  I've applied to roughly 30 jobs in the past 6 months and I'm at 8 interviews or so.
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cchrissyy

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Re: Case Study - August - December Romance - How to Retire?
« Reply #13 on: June 13, 2017, 06:27:17 PM »
As I look at this, I'm more worried about "how will you support yourself if he dies" than about retirement.  And worse, what if something serious and expensive happened, something where he lives but is too disabled to work. Your expenses could shoot up while his income goes away. Sorry but I think about these things. So....

Does he have any life insurance? 

Does the kind of work he's been doing mean that he gets credit in the social security system so he could possibly receive social security disability payments if, say, he had a heart attack or other serious medical issues that kept him unable to do delivery work? 

He's older than you and not in great health, so seriously, if he died in the next decade that you expected him to keep working, how would you get the income you need to support yourself?  I'm asking in part because maybe whatever the answer is to that question is truly what you should start doing right now. Would you get a roommate? sell the extra vehicles and any other valuable clutter? is it worth it to reactivate the librarian credential?


Lauran75

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Re: Case Study - August - December Romance - How to Retire?
« Reply #14 on: June 13, 2017, 07:00:15 PM »
Dicey here. I want to apologize because on re-reading, I think my answer sounded curt, when brevity was the intention. I think a person with your credentials and experience should not have too hard a time making more money is all. I understand good benefits are, well, good, but lots mo' money is even better. Can you start looking for things up the ladder with your current employer? $36k seems like they're the ones getting the best end of that deal.

Hi Dicey - No worries. :)

My problem is two-fold - 1. Lack of confidence / look like I'm much younger than I am / NOT good socially (though people consider me friendly) and  I also have a speech impediment which rears itself once in awhile, embarrassingly in front of co-workers. 2. I'm kind of a weird aberration ... don't wear makeup, don't drink, don't eat meat, don't do business/work from Friday night to Saturday night ... etc. I also am not a good dresser nor am I good at doing my hair. In other words, I don't look like a 41 yr old professional. I try to look nice, but I'm definitely not my mom who always is dressed to the nines.

These things make it hard for me to find a job in the first place, and then the Interviews .... Ugh.

I have  been looking for the past year. There's been about five openings I applied for, got interviews at two places.

Your look can be fixed. Ask your mom to help you do a makeover. I am  a shorts and t-shirts girl myself, but when I worked on Wall Street I "dressed to the nines" like your mom because it was expected. A professional look will also give you more confidence.

My mom would LOVE to fix my look. I'm just not sure I want to work somewhere where you have to be dressed to the nines to be taken seriously.

I have  been looking for the past year. There's been about five openings I applied for, got interviews at two places.

Getting 2 interviews off of 5 applications is a great ratio.  I've applied to roughly 30 jobs in the past 6 months and I'm at 8 interviews or so.

You're right. When I look at it that way, it is more positive.

As I look at this, I'm more worried about "how will you support yourself if he dies" than about retirement.  And worse, what if something serious and expensive happened, something where he lives but is too disabled to work. Your expenses could shoot up while his income goes away. Sorry but I think about these things. So....

Does he have any life insurance? 

Does the kind of work he's been doing mean that he gets credit in the social security system so he could possibly receive social security disability payments if, say, he had a heart attack or other serious medical issues that kept him unable to do delivery work? 

He's older than you and not in great health, so seriously, if he died in the next decade that you expected him to keep working, how would you get the income you need to support yourself?  I'm asking in part because maybe whatever the answer is to that question is truly what you should start doing right now. Would you get a roommate? sell the extra vehicles and any other valuable clutter? is it worth it to reactivate the librarian credential?



Something happening to him is my big fear too. We currently have $10k in life insurance on him. I can increase it by $5k once a year to $50k - through work. If he could qualify for non-work life insurance, I'm guessing the premiums would be atrocious.

If he were to die, I would sell the extra vehicles, sell his electronics, sell the house ...and maybe buy a small house with lots less yard.   There's no way I/we could rent with these cats.

If he were to get fully disabled, he would be eligible for SS disability. At that point I'd tell him we need to get the basement cleared out (stuff sold) so we can attempt to rent it. There is a very rough MIL type apartment in the basement. To make it truly rentable would take at least $5k++ Plus we'd have to find someone willing to put up with the cats. There's no way he'd be willing to do this now. I have told him I'm afraid of what will happen when he can no longer work - he gets it, but then still wants $100 for the date night category ... He gets overwhelmed and overanxious really easily. Like right now, outside of work his focus is on the physical therapy and planting the container garden. If I try to put anything else on his agenda, it won't happen.

In either case, I might have to touch the stocks. I'd honestly be surprised if he's still working five years from now. Am hoping for ten.

Lauran75

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Re: Case Study - August - December Romance - How to Retire?
« Reply #15 on: June 13, 2017, 07:20:11 PM »
DH and I talked a little last night. We are thinking of setting a stop loss on enough shares of the stock that would keep us under the 15% capital gains threshhold. It climbed to $375 today ... Then the rest at a threshhold where we don't want to go below and would take the tax hit.

I also told him we need to figure out how we can put $500/mo into his IRA fund - and that we need to get an account opened for him SOON. He was half asleep, so I don't know how much he'll have retained... We may have to reevaluate the stuff money. Maybe start over from scratch.

If I could get him to sell some of his electronics that would help a lot. Maybe say we fund your IRA through the budget, or by you selling some stuff! Or both ..


Gone_Hiking

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Re: Case Study - August - December Romance - How to Retire?
« Reply #16 on: June 13, 2017, 07:58:16 PM »
 
DH and I talked a little last night. We are thinking of setting a stop loss on enough shares of the stock that would keep us under the 15% capital gains threshhold. It climbed to $375 today ... Then the rest at a threshhold where we don't want to go below and would take the tax hit.

I also told him we need to figure out how we can put $500/mo into his IRA fund - and that we need to get an account opened for him SOON. He was half asleep, so I don't know how much he'll have retained... We may have to reevaluate the stuff money. Maybe start over from scratch



Kudos for starting the conversation.  The initial ones are never easy, are they?

Lauran75

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Re: Case Study - August - December Romance - How to Retire?
« Reply #17 on: June 15, 2017, 08:44:56 AM »
Question - If I max out my Vanguard ROTH, am I still able to contribute to my workplace 457 IRA program? I know the 457 has a limit of something like $18k, but I'm just not sure if contributing to that, cancels out what I can contribute to my own ROTH outside of work?

If not, then I'm thinking of trying to see if we can find $1000/month to put to our ROTHs to max both of them out. Then when/if something happens to DH we can use that money if needed.

Would it make sense to stop adding the $185/month to my 457 plan, and put it towards maxing out the ROTHs? It would add back approximately $140/month into my take home (I currently have part of it going to the Traditional portion, and part to the ROTH portion.) Then if we get to the point where we can fund the Vanguard ROTH's fully without issue, start contributing again to the 457?

I'd still have 17% of my gross salary being put into the defined benefits plan at work.

Lauran75

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Re: Case Study - August - December Romance - How to Retire?
« Reply #18 on: June 15, 2017, 08:54:12 AM »
Also - this is something I've never been able to be sure about. Does having a workplace retirement plan negate you qualifying for the tax savers credit?

Gone_Hiking

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Re: Case Study - August - December Romance - How to Retire?
« Reply #19 on: June 15, 2017, 08:51:04 PM »
Question - If I max out my Vanguard ROTH, am I still able to contribute to my workplace 457 IRA program? I know the 457 has a limit of something like $18k, but I'm just not sure if contributing to that, cancels out what I can contribute to my own ROTH outside of work?

Yes, you can contribute to both.  There is an income limit for simultaneous contributions to both accounts and you and your DH are below it.

Also - this is something I've never been able to be sure about. Does having a workplace retirement plan negate you qualifying for the tax savers credit?

This is also income based - whether you qualify or not will depend on your joint income.   The eligibility is much lower than for combined workplace retirement plan and IRA contributions.

Lauran75

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Re: Case Study - August - December Romance - How to Retire?
« Reply #20 on: June 16, 2017, 12:05:21 PM »
Just an update - DH and I had a long talk last night. He agreed to reduce the spending money to $0! (I had suggested $50) and some other cuts to find $1000/mo to go towards our IRAs. He also sat next to me as I opened up an account for him at Vanguard (of course we had to print out some forms that he'll have to take to a band to have his identity verified .. sigh. Who knows when that will happen.)

I'm going to be putting in the form to change my 457 contributions - that won't take effect for six weeks (3 paychecks.) I'll also be transferring our EF money to my ROTH (since it's been open way longer than 5 years.) I think we'll probably fully fund my ROTH first, and then work on DH's.

Oh .. I also got him to agree to sell the Honda - the one needing a new transmission. :) (I've been trying to nudge him to do this for awhile.) He's added it to our chalkboard list of things to accomplish, so I think he's serious about it. :)

ETA - Whatever extra (outside of 40 hours/week employment) we make will go 50% to the $12k goal and 50% for our own spending money. That way we still have spending money. Once we get the $12k, then we'll fatten up some of the lean categories we're taking from now.
« Last Edit: June 16, 2017, 12:07:20 PM by Lauran75 »

SwordGuy

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Re: Case Study - August - December Romance - How to Retire?
« Reply #21 on: June 16, 2017, 10:43:14 PM »
Just finished re-reading thru the entire thread.   I'm glad your husband is starting to show some sense on your mutual finances!

Here's something I found that might be helpful (or just morbid).  One never knows...

http://www.bankrate.com/calculators/retirement/life-age-expectancy-calculator.aspx


My goal is to lose 30 lbs by my retirement date and another 40 after that.   I'm at least 70 lbs overweight (I'm 5'11" and 260lbs.)   It's going to be hard to do - I've always hated exercising. 

I can't imagine being 400lbs.  It would be totally exhausting.



Kayad

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Re: Case Study - August - December Romance - How to Retire?
« Reply #22 on: June 17, 2017, 07:15:31 AM »
One small thing- your home insurance is really high for the value of your house.  I would shop that around, make sure you have a policy with realistic coverage for personal property, etc.

Lauran75

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Re: Case Study - August - December Romance - How to Retire?
« Reply #23 on: June 20, 2017, 11:07:42 AM »
Just finished re-reading thru the entire thread.   I'm glad your husband is starting to show some sense on your mutual finances!

Here's something I found that might be helpful (or just morbid).  One never knows...

http://www.bankrate.com/calculators/retirement/life-age-expectancy-calculator.aspx


My goal is to lose 30 lbs by my retirement date and another 40 after that.   I'm at least 70 lbs overweight (I'm 5'11" and 260lbs.)   It's going to be hard to do - I've always hated exercising. 

I can't imagine being 400lbs.  It would be totally exhausting.

It is. He is tired all the time. Most of the time he makes it through work, and then comes home and does nothing but sleep or surf. On his days off he sometimes musters enough energy to do stuff. Not always though.

Lauran75

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Re: Case Study - August - December Romance - How to Retire?
« Reply #24 on: June 20, 2017, 11:13:35 AM »
One small thing- your home insurance is really high for the value of your house.  I would shop that around, make sure you have a policy with realistic coverage for personal property, etc.

$700/yr is high? Before Geico burned its bridges with me with its super annoying and pushy home insurance sales person (I'd been with Geico for auto insurance for 16+ years) I got a quote of $1100. And the place my DH has his car insurance at had quotes in that range also. We have a $2k deductible.

It may be on the higher side because we have a wood burning stove in the basement (inoperable) and a fireplace. Our basement also leaks, and we had to put in t-bars?? to hold one wall up - though I'm not sure if that was reported to insurance or not.

Tay_CPA

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Re: Case Study - August - December Romance - How to Retire?
« Reply #25 on: June 20, 2017, 11:40:31 AM »
Just finished re-reading thru the entire thread.   I'm glad your husband is starting to show some sense on your mutual finances!

Here's something I found that might be helpful (or just morbid).  One never knows...

http://www.bankrate.com/calculators/retirement/life-age-expectancy-calculator.aspx


My goal is to lose 30 lbs by my retirement date and another 40 after that.   I'm at least 70 lbs overweight (I'm 5'11" and 260lbs.)   It's going to be hard to do - I've always hated exercising. 

I can't imagine being 400lbs.  It would be totally exhausting.

It is. He is tired all the time. Most of the time he makes it through work, and then comes home and does nothing but sleep or surf. On his days off he sometimes musters enough energy to do stuff. Not always though.

That does sound tough :( You mentioned previously in the thread that you yourself do not eat meat - does your husband also not eat meat? If not, maybe a whole foods plant-based diet could be helpful to him. I just watched the documentary "What the Health" on Netflix last night and it was fascinating! There were a few people struggling with health issues who appeared to have made some amazing improvements after just a few weeks of eating a plant-based diet. I'm not a doctor of course - but just a thought! I'd recommend checking out the documentary for anyone interested. The book "Healing the Vegan Way" is interesting as well.

Thanks for sharing your story! Best of luck.

cchrissyy

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Re: Case Study - August - December Romance - How to Retire?
« Reply #26 on: June 20, 2017, 02:07:27 PM »
yes the insurance sounds high to me too - maybe search other threads here for what people pay?

my insurance costs a little more than yours annually but my house's value is 6x what yours is.
oh, and my deductible is less, only $1k.

Lauran75

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Re: Case Study - August - December Romance - How to Retire?
« Reply #27 on: June 21, 2017, 12:32:18 PM »
Just finished re-reading thru the entire thread.   I'm glad your husband is starting to show some sense on your mutual finances!

Here's something I found that might be helpful (or just morbid).  One never knows...

http://www.bankrate.com/calculators/retirement/life-age-expectancy-calculator.aspx


My goal is to lose 30 lbs by my retirement date and another 40 after that.   I'm at least 70 lbs overweight (I'm 5'11" and 260lbs.)   It's going to be hard to do - I've always hated exercising. 

I can't imagine being 400lbs.  It would be totally exhausting.

It is. He is tired all the time. Most of the time he makes it through work, and then comes home and does nothing but sleep or surf. On his days off he sometimes musters enough energy to do stuff. Not always though.

That does sound tough :( You mentioned previously in the thread that you yourself do not eat meat - does your husband also not eat meat? If not, maybe a whole foods plant-based diet could be helpful to him. I just watched the documentary "What the Health" on Netflix last night and it was fascinating! There were a few people struggling with health issues who appeared to have made some amazing improvements after just a few weeks of eating a plant-based diet. I'm not a doctor of course - but just a thought! I'd recommend checking out the documentary for anyone interested. The book "Healing the Vegan Way" is interesting as well.

Thanks for sharing your story! Best of luck.

I am a huge fan of Dr. Greger (How Not to Die) - my DH had to listen to months of me telling him info from the book. :) I have successfully gotten him to eat a couple Brazil nuts each week, eat either broccoli or Brussels sprouts 2x a week, a serving or so of beans 2x a week.... It's progress. He will also sometimes get on kicks where he'll eat certain fruits - bananas, cantaloupes, apples, oranges, etc., for awhile, and then just NOT for awhile.

He grew up in a home where his mom used vegetarian "meat" products fairly often, but also cooked meat. He is very much a meat and potatoes person.

Lauran75

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Re: Case Study - August - December Romance - How to Retire?
« Reply #28 on: June 21, 2017, 12:38:03 PM »
yes the insurance sounds high to me too - maybe search other threads here for what people pay?

my insurance costs a little more than yours annually but my house's value is 6x what yours is.
oh, and my deductible is less, only $1k.


Wow. I used a local insurance agent who is supposed to shop around for me. I will ask her to run the numbers again and which companies she checked for me.

mrspendy

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Re: Case Study - August - December Romance - How to Retire?
« Reply #29 on: June 28, 2017, 04:51:54 PM »
Sell or hedge the TSLA!

(in as tax efficient way possible)


Lauran75

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Re: Case Study - August - December Romance - How to Retire?
« Reply #30 on: June 30, 2017, 09:39:16 AM »
We had our July budget meeting last night. We are setting aside $1000 right off the top to go to our ROTH's. Both of us are going to $0 spending money - we will get our spending money from whatever we each bring in over and above our 40 hours/week jobs. (We both have plenty of spending money left from previous months.)

(Actually, we'll be doing the extra income this way - 50% of it goes to the general budget, and then 50% of it is split between us for spending money.)

I have set up DH with a Vanguard account, although it is taking a lot of red tape to actually get to the darn account! First, we had to print out paperwork to verify his identity. Then I emailed back and forth for a week trying to figure out if the paperwork needed anything more than just his signature. Finally gave up and just mailed the paperwork in. They took the $3555 out of our account. I tried logging in to set up his ROTH. They want his account number! Um ... we haven't received any mailed paperwork yet. We don't HAVE his account number. He tried logging in on his computer. Same thing. ARGH!

(I still need to get my name changed on my account so I can add our joint account info and then transfer money! So much red tape for everything. Why couldn't it be as easy as it was with Discover - just called and said - hey, I got married. Change my name please.)

We're giving it a week to see if we get mailed paperwork with his account number, and then HE will have to call. He HATES doing anything with finances, which is why I take the bull by the horns on this stuff as much as possible. I hate having that money just sitting there doing nothing. It could at least be earning 2.5% interest if it was still in our checking account. Ugh!

Neither of us will be making much extra this month though ... DH's sister is in her home under hospice care - dying of cirrhosis of the liver. If you are someone who drinks a lot, please look up what this does to your body. It is NOT a pleasant way to die. (She lives in our same town, so we are taking turns with her husband and his sister to stay with her.)

She also doesn't have a will or POA, etc. Thankfully she has what is called a small estate in Nebraska, so as far as I can figure out, we won't have to go through probate. (She has moments of lucidity, but not long enough to be able to legally sign anything.)

Lauran75

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Re: Case Study - August - December Romance - How to Retire?
« Reply #31 on: June 30, 2017, 09:48:26 AM »
Sell or hedge the TSLA!

(in as tax efficient way possible)

I have set up stop limits for various points on about 80% of the TSLA that's held in the IRA accounts, and on about 60% of the ones that are held outside of the IRA's.

DarkandStormy

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Re: Case Study - August - December Romance - How to Retire?
« Reply #32 on: June 30, 2017, 11:36:03 AM »


My goal is to lose 30 lbs by my retirement date and another 40 after that.   I'm at least 70 lbs overweight (I'm 5'11" and 260lbs.)   It's going to be hard to do - I've always hated exercising. 

https://www.vox.com/2016/6/29/12051520/exercise-weight-loss-myth-burn-calories-video

^Thought this might be helpful for you (or anyone) with a weight loss goal (perhaps I should cross-post to a more appropriate thread but I don't know, it may have already been shared).
The Chase Trifecta:
Earn 50,000 Ultimate Rewards points with Chase Sapphire Preferred - $4k spending in 3 months.
https://www.referyourchasecard.com/6/2MOVOLZCEJ
Earn a $150 bonus with Chase Freedom Unlimited - only $500 spending needed in 3 months.
https://www.referyourchasecard.com/18/ENYF0FTS66
Earn a $150 bonus with Chase Freedom - only $500 spending needed in 3 months.
https://www.referyourchasecard.com/2/DBOP9XI9XT

Recommended Cell Servce - Google's Project FI: https://g.co/fi/r/THK0WX

DarkandStormy

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Re: Case Study - August - December Romance - How to Retire?
« Reply #33 on: June 30, 2017, 11:40:59 AM »
Sell or hedge the TSLA!

(in as tax efficient way possible)

Lol people have been saying this for months (a year more even?).  It's +68% YTD.  It's arguably just as risky to short (it sounds like the OP has a good plan in place, though).
The Chase Trifecta:
Earn 50,000 Ultimate Rewards points with Chase Sapphire Preferred - $4k spending in 3 months.
https://www.referyourchasecard.com/6/2MOVOLZCEJ
Earn a $150 bonus with Chase Freedom Unlimited - only $500 spending needed in 3 months.
https://www.referyourchasecard.com/18/ENYF0FTS66
Earn a $150 bonus with Chase Freedom - only $500 spending needed in 3 months.
https://www.referyourchasecard.com/2/DBOP9XI9XT

Recommended Cell Servce - Google's Project FI: https://g.co/fi/r/THK0WX