[USER]

My spouse and I are 50 & 51 and have not contributed to any retirement accounts.

Yes, we’re late in the game. We have a home worth approx 1.7 and owe approx 600k without any other debt. We make about 230k (salary only) a year.

What should we invest in to retire by 65?! Also, I’ll add that my spouse will get a decent pension from his employer and I’m a stay at home mom.

Adding : pension will be approx 11-12k/mo. + social security +VA disability compensation 2k/mo.

Employer matches up to 2k/year on 401 (balance approx 100k)
Mortgage is at 2%
And we plan on staying in this home and working on paying it off sooner than later.

My husband would like to purchase a vacation home vs me wanting to invest in stocks etc.

[Michael]

From what I read, I am assuming you will have a pension and social security when you retire at 65.

So, how big is the retirement income gap that you are looking at?

This will help answer your question.

[Rick]

Does spouse have a 401k with a company match available?

Do you plan to stay in the current house long term or sell it in the future and downsize?

What is the mortgage rate?

Do either or both of you qualify for social security?

[Kevin]

The first thing you need to do is figure out your expenses in retirement vs.

pension/social security.

This way you can see if you will need to make up any gap with savings/investments.

[Sean]

You likely won’t have a choice but to sell the home unfortunately, doesn’t seem like you can afford to have it now, but that’s rather besides the point.

To retire in 15 years with the same level of spending you’ll need to save quite a large amount.

Let’s say you saved 30% that would mean almost 70k per year and would get you like 1.7 million at 65.

That would only translate to about $68k of annual income assuming the 4% rule.

Even if you say a generous 60k per year of combined social security at 65, you’re still at roughly half your current income.

No you won’t be on the streets, but you’ll be taking a massive lifestyle hit.

[Monique]

Flat fee only advisor. Check out Nectarine (I think that’s the fruit lol).

You guys are in a good position and have time.

You’ll have to figure out how much more you’ll need above the $13k a month after taxes and plan to invest for that return plus a cushion and health insurance.

[Frank]

There are no “magic buttons” you get to push to “make your investments go faster” when you reach a certain age.

Start with index funds in the 401k and IRAs (for both of you).

Join the Catching Up to FI group.

If you want to buy a vacation home, plan to work until you can’t work anymore and then probably lose it to foreclosure.

DO NOT PAY OFF YOUR CURRENT HOUSE EARLY AT THAT INTEREST RATE.

THAT IS NOT INVESTING AND WILL NOT HELP YOU.

You and your husband are not on the same page if he is talking about vacation homes at this stage with little savings or investments.

He sounds like a “I’ll just keep working” person.

You need to have some difficult conversations and may need a therapist and/or a financial advisor.

[Wendy]

Don’t pay off the house. 2% is insanely low. High Interest Savings Accounts are at 5% right now.

$11-$12k + SS + 2K disability?! And VA makes me think your healthcare is covered?!

Um – the only reason to save is to allow you to retire earlier than 65 unless your spend is higher than that per month?

[Lori]

If you’re spending $230k a year, that’s about $19k a month.

If your SS, pensions, etc., will equal that, you’ll be fine.

Otherwise, you need to get a handle on your expenses and start getting real about cutting them so you can save something.

Even though you bring in a lot, I’d feel super vulnerable knowing the income will stop soon.

[Author]

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