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I’m 59, and my husband and I earn $500,000 a year

Scorpio

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#1
I’m 59, and my husband and I earn $500,000 a year — but have credit card debt and nothing saved for retirement. What should we do?
Published: April 25, 2020 at 1:17 p.m. ET
By
Catey Hill

Even when things seem overwhelming, you do have options.
Getty Images/iStockphoto




Dear Catey,

My husband is 65 and a lawyer and partner in his firm with a thriving practice; I am 59 years old. We have three children (more on that below), and I was fortunate to be a stay-at-home mom. I now work part time, which is essentially just “play” money. Although I’m college-educated, I never had a career outside of the home.

Our youngest recently graduated from college and is now working full time. We provided a college education for all three children, and we were easily able to afford it. We make a very good income (over $500,000 a year), although we live in an expensive city and our income tax bracket is astronomical.

Our oldest child, a son, had mental health and addiction issues for a decade. We spent a small fortune trying to help him by sending him to multiple rehabs, sober living housing, psychiatric counseling, living expenses when he was unable to work or go to school, paying for his college education, etc. He took his own life several years ago, which left us utterly devastated. We have tried our best to move forward, but money for our retirement is simply not there.



The pluses are that my husband is healthy, fit, and energetic and has an excellent law practice. Assuming he remains in good health, he can work for many more years and plans to do just that. We own a home that will be paid for in 7 years, and at this time is worth around $1.4 million. If we sold it tomorrow, we could net a million dollars in equity. Our city is rapidly growing and homes prices have become very high, so it would be difficult to find a home for less than $750,000 (if we were lucky).

Do you advise sitting tight as our home continues to appreciate, or try to downsize and pay for a home in full with cash? We bought our house for a song when the market was down. We have emptied our IRAs and have a great deal of credit card debt, which I hope to have paid off in full in the next 18 months — and we’d like to save for retirement.


I’m mortified to speak to a financial adviser. Any advice would be sincerely appreciated.

Thank you so much,
LS




Dear LS,

It was hard for me to know how to begin this column to you, other than to offer my deepest condolences about your son. I think any parent reading this (and I’m one of them) can relate to your willingness to spend so much of your savings to help your son.

This is a critical moment. Prepare for the trading day with MarketWatch's Need to Know newsletter. Our flagship email guides investors to the most important, insightful items required to chart the trading day ahead.


Please don’t be “mortified” to speak to a financial adviser. You’re human, and if there’s one thing I’ve learned from writing about personal finance for a decade, it’s this: Almost everyone has something in their financial lives that they feel embarrassed about.

The silver lining here is that you’ve got a high income and a ton of equity in your home. You have options even though it may not feel like it right now. Here’s how several experts think you should proceed going forward.

Sell your home and move to a cheaper spot, using the proceeds from that sale to pay down your credit card debt as quickly as you can and start saving more for retirement, says certified financial planner Brian Bruggeman, a vice president at Baker Boyer in Walla Walla, Wash. You could buy a cheaper place. Or you might even consider renting for a few years, says Shannon McLay, the founder and CEO of The Financial Gym.

If you can, consider switching to a 0% interest rate credit card while you repay the balance — though be sure to pay it off before the 0% period expires. It’s also important that you use this time to make a budget and see where you can make larger cuts in your spending to free up as much cash as you can, Bruggeman adds.

“Pay off your credit card debt as soon as possible. The less debt you carry, the more spendable income you’ll have in retirement—period,” explains Kimberly Foss, founder of Empyrion Wealth Management in Roseville, Calif.

You should also start saving for retirement with those extra funds, says Foss, who recommends putting down 20% on the new home (to avoid having to pay private mortgage insurance) and investing the rest to “help provide additional income for retirement.”

As for how to start saving for retirement, “the first place to look is their workplace retirement plans,” says Bruggeman, who suggests your husband max his plan and you do the same if you have a workplace plan. Because your husband is over 50, he can contribute $26,000 to a 401(k) in 2020.

Then, he adds, consider maxing out any tax-advantaged accounts you have access to, such as an HSA, or potentially funding what’s called a backdoor Roth IRA. (You can read more about backdoor Roth IRAs here; Foss notes that you should consult with a tax adviser if you are considering this plan.) “The rules around backdoor Roth IRAs are a little tricky if they have outside IRAs, so they’ll want to do their homework before pursuing that strategy. If they are able to fund their employer plans and other tax advantaged accounts, they should fund a joint investment account and invest in a tax-efficient portfolio,” he adds. (Read more about spousal IRAs here.)

It’s also a good idea, as you are already planning, for your husband to continue working as long as he can, experts say. And though you might be tempted to take Social Security early, don’t.

“Your husband should delay taking Social Security benefits until at least age 70. As long as he is in good health and enjoys working as an attorney, he should not begin taking Social Security benefits. His benefit will reach its maximum level at age 70, though he need not begin claiming it until he is ready. You should consider claiming your spousal benefit when your husband reaches age 70, whether he retires then or not,” Foss explains.


https://www.marketwatch.com/story/i...nt-what-should-we-do-2020-02-25?mod=home-page
 

Scorpio

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#2
too funny, she starts it off as 'my husband and I make 500k.............

girl, he makes the dough and you do squat,

looks like you have done a right fine job of spending it too,
 

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It's seldom about the income or salary.

It's about the discipline to live within one's means.

I had years, as a train-driver puke, that I made low six figures. 110k and change. I worked for it, too, with 80-hour work weeks, and no set start times and often no day off. Night work was the rule more than the exception.

But I learned. Early on, I almost lost the job. I had a modest mortgage, a mid-priced car (a compact 4x4 truck, before prices exploded on those) and some costs associated with moving into the home, on the plastic.

I kept the job, but I learned how tenuous was my grip. How my job basically depended on the winds of fate and the whim of a goonion steward.

So I sold the house. And a year after I sold it, my mother took ill. She didn't need a nursing home but she really would benefit from someone in the house most of the time.

That was, for me, a win-win. I was 45 and single. I had no other life than work; and the house was a big one. I could be at my end, watch television or play music with headset, or surf the Web. Even drink, if I so chose. My mother would never need know, unless there was a medical crisis...of which there were a few.

While I did this, the others who hired about the time I did, were on second- and third wives. Alimony, child-support, present-child expenses...homes, often expensive ones to satisfy trophy second wives, generally much younger.

Three years I lived that way, at my mother's house. Three years, driving an old car (truck was sold) and paying no rent, and making my big-gas wages. Right into the kitty...actually, into the stacking pile. That's when I started.

Now I have a pension one-20th the size of this babe's income...no credit-card debt...a much-cheaper-than average apartment...some hobbies...little in the bank, but a big stack, so when there's a Bank Holiday and Bail-In, I miss the fun.

Life is good. It could be a lot better, but then...I could be like these fools.
 

BackwardsEngineeer

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Being randomly exposed to end of lifers finances in the home purchase process, we are often amazed, naw stunned at information revealed. On one hand sometimes retired folks roll in driving a 10 yr old Lexus, classic button down simple clothes, fellow just needs a pocket protector and they have a mil in cash and 10x stashed virtual. They are looking at 300k places might spend 400k if its perfect. Then the most shocking side, high flyers, perfect smiles, look and wheels.... wanting 1.5 mil and financing 1.499 mil, massive income with enormous payments on everything.... virtual negative net worth

It is a bizarraro world
 
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GOLDBRIX

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#6
(ARTICLE): I’m 59, and my husband and I earn $500,000 a year — but have credit card debt and nothing saved for retirement. What should we do? .......Our oldest child, a son, had mental health and addiction issues for a decade. We spent a small fortune trying to help him by sending him to multiple rehabs, sober living housing, psychiatric counseling, living expenses when he was unable to work or go to school, paying for his college education, etc. He took his own life several years ago, which left us utterly devastated. We have tried our best to move forward, but money for our retirement is simply not there.
The pluses are that my husband is healthy, fit, and energetic and has an excellent law practice. Assuming he remains in good health, he can work for many more years and plans to do just that. We own a home that will be paid for in 7 years, and at this time is worth around $1.4 million. If we sold it tomorrow, we could net a million dollars in equity. Our city is rapidly growing and homes prices have become very high, so it would be difficult to find a home for less than $750,000 (if we were lucky).
Do you advise sitting tight as our home continues to appreciate, or try to downsize and pay for a home in full with cash? We bought our house for a song when the market was down. We have emptied our IRAs and have a great deal of credit card debt, which I hope to have paid off in full in the next 18 months — and we’d like to save for retirement.

I’m mortified to speak to a financial adviser. Any advice would be sincerely appreciated.

Thank you so much,
LS
1588077059368.png
 

Scorpio

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#8
I have to come back to this,

the guy is 65, and she states the home will be paid off in 7,
and they have $400K of outstanding mort debt
the guy makes 500k and his house won't be paid for until he is 72?

a mil in home equity is dead money subject to the whims of the market,
and you are only really stating that dough is for your kids when you die
they may or may not get market value in a distressed situation, after all of the arguments die down

the argument changes if you have dough in other investments of some type that you can pay it off at any time, you just choose not to at this time. Doesn't sound like this is the case.

he has been so busy screwing others as a lawyer that he hasn't seen the ultimate screwing he has been getting ............

rest assured though, this is her perspective, and we don't know if the old boy has been squirreling funds she doesn't know about, etc.
 

the_shootist

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I have to come back to this,

the guy is 65, and she states the home will be paid off in 7,
and they have $400K of outstanding mort debt
the guy makes 500k and his house won't be paid for until he is 72?

a mil in home equity is dead money subject to the whims of the market,
and you are only really stating that dough is for your kids when you die
they may or may not get market value in a distressed situation, after all of the arguments die down

the argument changes if you have dough in other investments of some type that you can pay it off at any time, you just choose not to at this time. Doesn't sound like this is the case.

he has been so busy screwing others as a lawyer that he hasn't seen the ultimate screwing he has been getting ............

rest assured though, this is her perspective, and we don't know if the old boy has been squirreling funds she doesn't know about, etc.
Karma's a bitch and it seems this guy is getting his
 

Casey Jones

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#10
rest assured though, this is her perspective, and we don't know if the old boy has been squirreling funds she doesn't know about, etc.
If she can add, she can see a big hole in the budget.

However, when you're a society matron pushing 60, and your hubby is a loy-yeh...there are many things you must turn a blind eye to.

Perhaps she sees but chooses not to discuss. But then, without actual, factual figures, it's all just so much blathering, no?

I think they'd be better off if they were worse off.
 

Scorpio

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#11
exactly right, not enough info to amount to a hill 'o beans
 

engineear

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#12
I wonder, upon reading her answer, she thought..." sell my million dollar house and get something smaller??!! I can't believe he told me that!"

Just like when Messiah told the rich man to give away all his wealth and follow Him, the man walked away stunned.
This woman who has attained a good many material things probably was stunned also. I mean, what would her friends think of her, stepping down the latter of success...into something cheaper and smaller? Tragic.
 

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he has been so busy screwing others as a lawyer that he hasn't seen the ultimate screwing he has been getting ............
He is probably footing the bill for his mistress's home too.

Yep ALOT is being intentionally left out of her "Whoa is us story".
It reads like a sympathy story, and we all know where sympathy is in the dictionary.
 

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I've made some major financial blunders in my day. And sometimes I think I'm just a retard. But good gawd I feel like a genius after reading this woman's tale of woe. I suspect it's just that- a tale- but I'm going with non-fiction. It makes me feel better.
 

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I've made some major financial blunders in my day. And sometimes I think I'm just a retard. But good gawd I feel like a genius after reading this woman's tale of woe. I suspect it's just that- a tale- but I'm going with non-fiction. It makes me feel better.
Trust me, the stupid we live among is astounding!!
 

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#16
It's seldom about the income or salary.

It's about the discipline to live within one's means.

I had years, as a train-driver puke, that I made low six figures. 110k and change. I worked for it, too, with 80-hour work weeks, and no set start times and often no day off. Night work was the rule more than the exception.

But I learned. Early on, I almost lost the job. I had a modest mortgage, a mid-priced car (a compact 4x4 truck, before prices exploded on those) and some costs associated with moving into the home, on the plastic.

I kept the job, but I learned how tenuous was my grip. How my job basically depended on the winds of fate and the whim of a goonion steward.

So I sold the house. And a year after I sold it, my mother took ill. She didn't need a nursing home but she really would benefit from someone in the house most of the time.

That was, for me, a win-win. I was 45 and single. I had no other life than work; and the house was a big one. I could be at my end, watch television or play music with headset, or surf the Web. Even drink, if I so chose. My mother would never need know, unless there was a medical crisis...of which there were a few.

While I did this, the others who hired about the time I did, were on second- and third wives. Alimony, child-support, present-child expenses...homes, often expensive ones to satisfy trophy second wives, generally much younger.

Three years I lived that way, at my mother's house. Three years, driving an old car (truck was sold) and paying no rent, and making my big-gas wages. Right into the kitty...actually, into the stacking pile. That's when I started.

Now I have a pension one-20th the size of this babe's income...no credit-card debt...a much-cheaper-than average apartment...some hobbies...little in the bank, but a big stack, so when there's a Bank Holiday and Bail-In, I miss the fun.

Life is good. It could be a lot better, but then...I could be like these fools.
I live alone. My biggest worry is how to hide my stash. Any ideas? What happens when I'm not home? One robbery and I'm screwed.
 

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#17
It's about the discipline to live within one's means.
Exactly.

I've always been tight with money.

"A fool and 'his' money are soon parted" She's the fool. Addictions seem to run in the family. Hers is money. Spending it.

I'd consider selling the 'house' moving to a small podunk and learn how to live with in one's means as the next adventure. Lawyers can get work anywhere.
 

Casey Jones

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Exactly.

I've always been tight with money.

"A fool and 'his' money are soon parted" She's the fool. Addictions seem to run in the family. Hers is money. Spending it.

I'd consider selling the 'house' moving to a small podunk and learn how to live with in one's means as the next adventure. Lawyers can get work anywhere.
Actually, not totally true, that last. Another state means another Bar Exam, and a different law license.

As well...with attorneys, more than some others...it's not what they know, but who they know.

Her Hillaryness FAILED the DC Bar Exam, repeatedly. She gave up - and followed her pervert boyfriend to Are-Kansas. Where, with time, she got a partnership with the Rose Law Firm.

Did the fact that her pudgy lunk, now married to her, was by-then governor of the state, have anything to do with it? Is a pig's @ss pork?
 

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I'm guessing they live in San Fransisco... It's a BIG state and lots of podunks.... Barstow CA you can get a decent shack for $200K brand new!

Managing the other $800k will be the problem.
 

Casey Jones

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I live alone. My biggest worry is how to hide my stash. Any ideas? What happens when I'm not home? One robbery and I'm screwed.
Yup.

That's basically a personal problem for each of us. What works for me, may not for you. I'm in an extreme low-crime area...I keep a little bit of my stack with other stuff, so it's there if TSHTF and I have to run.

On the other hand, if the apartment house burns down, I probably lose it.

You have to ask yourself, what's your level of trust? Do you trust your bank or Credit Union to manage safe-deposit boxes properly? Chase and Wells Fargo no longer let customers put cash or bullion in SD boxes. My Credit Union does; but if there's a Bank Holiday...I won't be celebrating.

I have a way. Obviously I won't discuss it, here. But you might want a combination of an unobtrusive storage box, with a lock on it to discourage curious entrants. Make it inconvenient to get to. Surround it by stuff that's not worth much.

And lock it up, but with the kind of lock you might use to secure yard equipment, say. So it doesn't stand out.

And you might want to have it in more than one place, so if you do get hit, you don't lose everything.
 

Casey Jones

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I've made some major financial blunders in my day. And sometimes I think I'm just a retard. But good gawd I feel like a genius after reading this woman's tale of woe. I suspect it's just that- a tale- but I'm going with non-fiction. It makes me feel better.
It might not be exactly true, but I've seen this in the past. I'm not a financial adviser or broker, but...I worked with a number of well-paid fools who couldn't understand that there's a need to think about tomorrow.

Writer Tom Wolfe parodied this world in The Bonfire of the Vanities, also.
 

GOLDBRIX

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I live alone. My biggest worry is how to hide my stash. Any ideas? What happens when I'm not home? One robbery and I'm screwed.
If you rent a storage locker that beats using a SDB at the bank. If you own land do some late night planting where you will know where to dig. If you own your house place them in the most inconvenient location you can get to. Build a false wall in the back of a small closet or cabinet. If you have a garage and tinker around with cars, trucks, and mowers you should see a lot of places to hide PMs especially from some one with a metal detector.
If you can keep your guns out of sight you can keep PMs outta sight too.
 
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Fatrat

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#23
What is maximum social security anyway? It seems they should be maxed.
 

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I live alone. My biggest worry is how to hide my stash. Any ideas? What happens when I'm not home? One robbery and I'm screwed.

There are a multitude of threads and vids in regards to hiding shiny.
Unless the robber has been informed of your holdings, out of sight is out of mind.
GOLDBRIX mentions a few above.

Easier is placing UNDER the cabinet raised floor. Pull out the kick board and slide in the shiny.
Concern about metal detectors should be viewed along the lines of second sentence I wrote.
Unless detectorist KNOWS there is shiny below, or you live on an old Civil War battlefield, nobody is gonna dig a huge target signal.
Toss a hundred .22 casings around the site, or bigger, or more, or bottle caps, or aluminum siding pieces etc etc.

Look at your stairs and all those voids, all those hinge ready risers.
Look at your ventilation system, and all those accessible voids.
Look at your water and sewer system, all those pipes to hide a fake vent attachment.
A chicken house, dog house, fish tank, window boxes with flowers and decorative metal hinges, etc.
My favorite for long term, 5 gallon bucket of paint or joint compound.
Opened and used looking right alongside other worthless and heavy crap.
Just be certain to triple ziploc bag it.
 

the_shootist

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#26
Nobody's going to open up that 4 inch sewer line under your house to see whats innit.
And I'm not storing my PMs in the sewer. There are much better ways to hide the stuff, many listed above
 

GOLDZILLA

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#28
A big shit filled litter box and a dead cat on top of it in the garage (under the litter) sounds like a good idea.
 

GOLDZILLA

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#30
Melt it into an ugly blob, paint it brown and use as a doorstop.
 

GOLDZILLA

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Inside a bunch of used rubbers in a trash bag under your bed....
 

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There are a multitude of threads and vids in regards to hiding shiny.
Unless the robber has been informed of your holdings, out of sight is out of mind.
GOLDBRIX mentions a few above.

Easier is placing UNDER the cabinet raised floor. Pull out the kick board and slide in the shiny.
Concern about metal detectors should be viewed along the lines of second sentence I wrote.
Unless detectorist KNOWS there is shiny below, or you live on an old Civil War battlefield, nobody is gonna dig a huge target signal.
Toss a hundred .22 casings around the site, or bigger, or more, or bottle caps, or aluminum siding pieces etc etc.

Look at your stairs and all those voids, all those hinge ready risers.
Look at your ventilation system, and all those accessible voids.
Look at your water and sewer system, all those pipes to hide a fake vent attachment.
A chicken house, dog house, fish tank, window boxes with flowers and decorative metal hinges, etc.
My favorite for long term, 5 gallon bucket of paint or joint compound.
Opened and used looking right alongside other worthless and heavy crap.
Just be certain to triple ziploc bag it.
My biggest fear with hiding any potential stash (were I to actually own anything) would be that either the house burns down, I forget where I put it, or after I fall into a coma one of my younglings come along and toss said hiding place out or sell the house. Big issues there. Anyway....
 

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#36
Living large, I'm not going to worry about their problems - lawyers have a license to steal, he'll just have to steal harder for a little while.
 

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#38
My biggest fear with hiding any potential stash (were I to actually own anything) would be that either the house burns down, I forget where I put it, or after I fall into a coma one of my younglings come along and toss said hiding place out or sell the house. Big issues there. Anyway....
How about a treasure map stashed with your will?