Author Topic: Better late than never  (Read 1624 times)

kg brew

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Better late than never
« on: October 17, 2013, 08:07:00 PM »
My wife and I would like to retire in about 8 years and I would like some advice.

 Debt remaining:
$31,000 mortgage @ 5.5%
$37,000 Home Equity loan @ 6%
$5,000 motorcycle loan @3.5%

No car payments

Net annual take home income $88,000

Current combined 401k savings so far $305,000.

In 8 years my wife will be 58 years old and I will be 56.

My plan is to put everything I can come up with towards the debt and get it paid off in approx. 1 1/2 years then put 50% or more of our income towards retirement (max contribution to 401k then the remainder in a stock fund)

  At 58 my wife can either take a $1800 monthly annuity or $300,000 lump sum on her pension.  I'm thinking the lump sum is the way to go here.


 Any suggestions will be appreciated.

bogart

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Re: Better late than never
« Reply #1 on: October 17, 2013, 09:18:50 PM »
Your plan of paying down debt as quickly as possible and then investing makes sense to me.  I'm sure if you post expenses, you'll get lots of recommendations of ways to cut them down and thereby speed both processes up.

Looking at http://www.immediateannuities.com/, a 58 year old woman could, today, buy an annuity paying $1,500/month with $300K; based on that, I'd take the pension.  More particularly I'd guess that there are enough complicated enough issues involved regarding what she should do (Is survivorship an option, providing you as well as her a safety net?  Is her employer's pension fund secure/insured, or among the more troubled/vulnerable ones?) that it might be worth paying a financial planner for advice on particularly this issue -- shouldn't take long (and thus shouldn't cost much from someone paid based on an hourly fee), and might well be worth it.