[USER]

Hi All, Meeting our financial planner next week. Any good questions for our situation that you can think of? Looking to assess our situation to retire at 55 (both of us). I am 43. My spouse is 40.

Current status:
Combined salaries 500K (250K both)
401k together 900K

Roth IRA has 80K (started mega backdoor Roth this year)
529 plans combined for two kids (14 and 9) 125K
Brokerage account 300K
Savings (in HYSA) 80K
Checking 70K

Real estate:
Rentals (total 4) equity is 1.1M (rent covers mortgage). 1st will be paid off by 2030. 2nd will be paid off by 2037. 3rd and 4th by 2045 if we don’t expedite paying them early as interest rates are quite low.

Primary home equity 750K (current debt on this is 650K with a 15 more years to pay off in full at 5.25% interest rate).

We plan to downsize in about 10 years once kids are off to their colleges (stuck to this home due to good schools).
No other debt (cars are fully paid off).

Please let us know if you have any suggestions for us on how to navigate our funds for the retirement.

[Tristan]

Back of the napkin math I would say the numbers probably work. 2 of the rentals will be paid off, what will the cash flow be estimated then?

do you have a ballpark estimate on what you think the mortgage of the new smaller home will be?

Do you have the ability to contribute to an HSA?

[Lauren]

I would review your current life, disability and umbrella liability policies with the advisor to make sure a catastrophic event won’t wipe out your savings.

Would also review the holding structure of your rental properties (each one as a separate LLPs hopefully) to make sure a bad event (lawsuit or building issue like mold) with a tenant or building conditions won’t affect your personal wealth.

Finally do a tax projection analysis to see if it makes more sense to max out your 401ks now or just contribute to your employer match and use the backdoor Roth for extra savings. Hope the meeting goes well.

[Robert]

I think there is a difference between a financial advisor and a financial planner; and I’ve made my views on financial “advisors” fairly clear in other threads.

While I really like the fact that you have four rentals (real estate is an invaluable part of my own journey towards FIRE) and I also really like the fact that between your retirement funds and your brokerage account, you’ve got 1.2 K million……

I’m not really liking the fact that you both want retire at 55.

Assuming you are male, your life expectancy is 76 years of age with a good chance you’ll be living in your 80s.

If your spouse is female, her life expectancy is 88 years of age with a good chance she’ll be living into her 90s.

I’m not sure that I see that you guys will have enough to carry both of you through 30, potentially 35-40 years of retirement.

I myself am a huge proponent of dying with a ton of money in the bank as opposed to having the last several years of my retirement, be threadbare; hoping I don’t run out of money before I run out of month.

Just to give yourself a thicker security blanket; I would look at retiring in my early to mid 60s; especially since the longer you put off drawing Social Security, the higher your payouts will be.

And it gives you more money and time to pay down those rentals. But that’s just me.

[John]

Yeah, my advice is that, unless your financial advisor is a fee-only fiduciary, cancel the appointment.

Otherwise, your meeting with the FA creates an immediate conflict of interest as they try to line their pockets with about 1% of your money every year.

[Author]

Posts