Show Notes
There comes a time when retirement planning becomes retirement doing. Many people get stuck in that gap between knowing vs. doing. While it is important to learn what you can so that you can make educated decisions, you’ll want to build a foundation to give you the confidence to act. My goal is not only to teach you information but also to help you build the structure you need to go out and rock retirement.
On this episode, we’ll discuss how to close the knowing vs. doing gap, answer listener questions, and check out what Kevin has to say in the Coach’s Corner. Listen in to hear a clarification on Social Security and COLA, a new perspective on whether to purchase long-term care insurance and how to find a financial advisor who will simply answer questions. Stick around until the end to hear the Coach’s Corner segment with Kevin Lyles. David is still in the wealth accumulation phase
David sounds like a younger listener since he has young children. He’s still in the wealth accumulation stage of life and has a healthy $120,000 emergency fund. He is considering whether he should use that emergency fund to go ahead and pay off his mortgage. The extra money each month could then be used to purchase a rental property or to invest. Consider the big picture
Since David still has a long financial journey ahead, it is important to step away from focusing on the financial aspect of this picture for a moment and envision what he wants his life to look like. What is he trying to accomplish? Does he want more financial flexibility? Does he want more time with his young children? Any financial question should be framed with your goals in mind. You want your goals to shape the outcome of your decision rather than the other way around. How important is financial flexibility?
By dipping into the emergency fund he takes away the financial flexibility. Having an emergency fund in place limits the number of choices a person has. Another option could be to pay the mortgage off by adding a bit extra each month to the mortgage payment over time. Paying off the mortgage early will improve the monthly cash flow, but at what cost? David needs to assess how he will pay off the mortgage and whether that increased cash flow is important enough to justify the decreased financial flexibility.
Once David pays off the mortgage, then he can decide whether rentals or traditional investments would be the best option based on the financial goals he has for the future. Framing these choices within the context of the bigger picture is so important when making these types of decisions. Ask your own question
If you would like to have your questions answered go on over to the
Ask Roger tab on RogerWhitney.com where you can either submit a written question or an audio question. We love to play audio questions on the show, so if you would like your question answered sooner press record to submit. OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN PRACTICAL PLANNING SEGMENT
- [5:38] Be wary of suspicious text messages and emails
LISTENER QUESTIONS
- [7:34] Should David pay off his mortgage?
- [15:00] How does Social Security COLA work?
- [19:52] Beth’s perspective on long-term care insurance
- [23:31] How to find a financial advisor who will simply answer questions
COACH’S CORNER
- [26:22] On categorizing retirement plans
TODAY’S SMART SPRINT SEGMENT
- [33:50] Set a benchmark for things you want to accomplish in 2023
What is Retirement Answer Man?
A top retirement podcast. Roger Whitney, CFP®, CIMA®, CPWA®, RMA, guides you on how to actually do retirement well financially and personally. This retirement podcast isn't afraid to talk about the softer side of retirement. It will teach you how to retire with confidence. Two-time PLUTUS winner for best retirement podcast / blog and the 2019 winner for best financial planner blog. This retirement podcast covers how to create a paycheck, medicare, healthcare, Social Security, tax management in retirement as well as retirement travel and other non-financial issues you'll need to address to rock retirement. Retirement isn’t an age OR a financial number. It’s finding that balance between living well today and feeling confident about your retirement. It’s about gaining more freedom to pursue the life you want. Join the rock retirement community at www.rogerwhitney.com