AN ELDERLY couple has asked a finance expert for help: can they retire with $150,000 in savings?
The financial advisor has given them the cold, hard cash truth and has said they must follow two steps to succeed.
IS ALL MY MONEY ENOUGH?
An American couple wanted to know if they could retire at 62 with $150,000 in savings.
Finance expert Drew Blackston broke down on YouTube what needs to happen for them to feel secure with their savings.
He took conservative assumptions, such as all the money they have invested in the retirement IRAs will increase at a rate of 6% plus a rate of 3% inflation for expenses.
Their annual expenses are $50,000.
He said they must also consider the years they will spend more traveling and the extra healthcare expenses that come with old age.
The big question that will ultimately impact how much they have for retirement is what age they choose to stop working.
“If you take social security at 62, you’re only going to get 70% of your retirement benefit,” said the expert.
He said the couple can delay retirement, giving them an increased yearly benefit.
“If they wait till 67, they’ll get 100% of their retirement benefit,” he said.
But the increase doesn’t stop there, as waiting till 70 makes it skyrocket to 120%.
Ultimately, they must decide what’s important to them and what makes sense for their plans.
Also, an important consideration might be how much money they want to leave behind for their children.
Drew also suggested working part-time to avoid digging into their investments earlier than necessary.
However, he also said they could lower their expenses.
Lowering expenses by 5% would enable the couple to make the same in their investments and savings as if they were working part-time jobs with higher expenses.
By 72, they would’ve grown to $320,000 in retirement savings.
He said the goal is to earn more than you’re taking out.
American couples want to make the best use of their money for retirement, and finance experts have opinions.
One expert told an elderly couple they were actually saving too much for retirement.
Another couple worried that $4.1 million still wouldn’t be enough to live comfortably.