My parents are in their early and mid-sixties and are wanting to retire. My dad was a small business owner for forty years, and my mom worked as a school nurse. They had six kids, so we were always very middle class. We always drove used cars, never ate out, never bought fancy things, Christmases were always frugal, but they always paid for music lessons and private school. We never went on vacations, except local camping trips. They were always living paycheck to paycheck.
I am new to personal finance myself, having just begun to implement MMM advice into my own life, so I am by no means an expert. It has been helpful to talk with my parents about their finances to try to understand what they did and how to avoid mistakes they made.
I would love to get Mustachian advice on their situation.
Here is a rough sketch of their finances: they happened to luck out and buy real estate near Seattle way back before Seattle boomed, so they currently own outright two Seattle-area properties with homes on them valued at $900,000 and $400,000. They live not far from Seattle in a house valued at around $450,000 with $160k remaining on their mortgage. (The house had been paid off but they took out a second mortgage to pay for some medical issues and also to pay off one of their other properties.)
In addition, they have $70,000 in an IRA, $60,000 in my mom's school district retirement savings, $10,000 in a REIT account. They have about $25,000 in cash.
They recently bought their first ever new-ish car (a Honda) and have a $15,000 car loan (their first ever car loan!).
Their monthly expenses are about $4000, and they receive about $2000/month from rental income.
They want to downsize their life and stop working. Their mortgage ($1700) and car payment ($400) and health insurance ($800) are their biggest monthly bills. They have basic cell plans, no cable, no credit card debt.
SO. With all that information. What would mustachians say would be the best way for them to retire? Should they keep all their money tied up in real estate, or sell and invest elsewhere? Should they use some of their cash to pay down the car loan, for example?
I look forward to hearing ideas!