Friday, February 8, 2013

Mything Information

So who's a gal (or guy?) to believe?

All I want is some expert advice in managing my retirement funds in the way best to insure maximum funds that will last as long as I do? Is that too much to ask?


Forbes Magazine has a set of "10 Terrible Pieces of Retirement Advice" online.

Mark, at Go To Retirement, disagrees with many of them, as do I. In fact, I find a couple of them to be insane--check out Number 9. I understand that some retirees may wind up still owing monies when they retire but to deliberately court debt? Totally bonkers in my humble opinion.

I also disagree with Forbes, but agree with Mark that there is never a good reason to withdraw 401(k) funds prior to retirement. Well, Mark has an exception if bankruptcy is on the horizon. I disagree with him since 401 (k) funds survive a bankruptcy intact.

My real point is where do those of us who are less than financially savvy, particularly when it comes to investing, go for accurate and understandable information?

I suppose I started wondering about Forbes when one of their examples was a guy with five million in his retirement accounts. Hmm--that would be about four and a half million more than Grace will ever have.

But can I trust Mark to give me better advice? Or my broker? Or Money magazine? Or my retired banker sister?

I have no idea, but what I can do in the meantime is keep searching, keep reading and keep asking.

Friday, February 1, 2013

Nearing Retirement With Lots of Debt

The current issue of Money magazine spotlights several families that are nearing retirement. This couple's situation hits home for me.

Larry and Lynn live in the Pacific NW, as do I. They earn double what I make but there's two of them.

They have family obligations, not all of which are mandatory but for which they feel responsible. Tell me about it! I can empathize.

Their retirement savings are comparable with mine given that I have only myself to save for but I'm several years further down the road to retirement than they are.

And both of our families have accumulated too much debt, a lot of it the result of what we feel we owe our families. Whether this is cultural (Larry is from Guam) or social (my children were adopted as older children and came to me with physical and emotional issues), we both have to deal with the financial fall-out.

I note that the article says Larry and Lynn will have their debt be paid off in 5 years, but that doesn't seem to cover their house, which is apparently upside down. I'm glad not to be in that position. The one thing I'm grateful for is the refinance I did in 1999 changing my 30 year mortgage to 15 years and simultaneously lowering the interest rate. Even though the 5.5% interest now looks high, I will own my home in another 15 months, and can then put most of the mortgage payment (currently $1235 a month for the payment, taxes and insurance) toward my consumer debt beginning in June, 2014.

I don't know that I would take the financial advice to cut back on retirement savings. In the article, Lynn has been very consistent with her contributions and at age 54, I wouldn't feel it prudent to lower them. Still, I have thought about it for myself. What stops me is the fear of not reaching my retirement goal of at least $400,00 in retirement funds by the time I leave the workforce. That, plus my social security should give me plenty for my day-to-day expenses as well as a cushion for traveling and other retirement desires.

Also, it would be nice to have a $14,000 windfall coming.

I don't see any of those on my personal horizon!

I hope, in five years, both of our families find ourselves free of our consumer debt.