Ask Terry Questions Retirement


By Terry Savage on December 15, 2017 | Financial Planning / Retirement

I have enjoyed your financial work for years and never thought some day I would be in this situation. 1) I anticipate retiring at the end of 2018. I don't have a mortgage (home is paid) no credit card bills or other debt. I am not married and have no children or siblings. I have $500K in my 401K and will receive an annual pension of $85K. What else should I do to prepare for retirement? 2). I plan to spend four months of winter in Latin America and renting a home or condo. Advice? 3) As a retirement gift I wish to purchase a $140K sports car. Dumb idea?

Terry Says

Congratulations.  You've done a great job!  The one unmentioned liability you have is the need for long-term custodial care -- the inability to dress, feed, bathe yourself.  This is not covered by Medicare.  You could purchase a long-term care insurance policy -- but in addition to being costly, with the possibility of rising premiums, the care would have to be given in the United States.  If you find yourself in a great situation in Latin America, you might consider retiring full time there -- where your dollar pension  and Social Security will go farther, and where you might make less expensive arrangements for care. I realize this is a scary proposition. But I'm realizing that more and more boomers are reaching their dream retirement alone.  And you need to make plans for how your money, healthcare, and general lifestyle will be managed if you are not in a position to do so.  Don't let this dim your bright hopes for an enjoyable retirement. But keep your eye out for answers to these questions.

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