/ Ask Terry Questions / Paying off everything

Paying off everything

By Terry Savage on January 22, 2017 | Financial Planning / Retirement

My husband retired at 60, I'm still working and am 58. He has a pension for life. If he dies I will receive 75% of his monthly pension! We have enough to cover 2 years until he gets ss. But we need to payoff cc debt and a loan so we will be able to afford retirement. Should we cash in 401k? We are also gonna receive 350000 inheritance in the future!

Terry Says

Well, I think you answered your own question.  You need to be able to "afford" retirement.  The only way to do that is for your husband to go back to work!  Unless he is disabled or terminally ill, it's insane to quite working at age 60 and expect to "enjoy" retirement.  And taking Social Security at age 62 is not a good choice, either.  It will permanently reduce the amount he receives in the future AND the base upon which future cost of living increases are calculated.  And I'm sure you haven't figured the cost of health insurance in retirement -- not only Medicare Part B, but your supplement, and Part D.  Fidelity recently calculated that a couple retiring at age 65 would need $250,000 to cover health care during an average retirement. So unless you've left something out the solution to your situation is to make sure your husband finds another job -- not necessarily in his former field, but working in a store, driving a UBER or limo, or something else part-time -- for sure until you pay down your credit card debt!    Do NOT dip into your 40l(k) plan early.  You will need that money.  Average life expectancy for him is another 30 years!



a personal
finance question