Financial Advice Needed

Follow DR’s teachings and you will go far. We have followed his plan since 2006, and all I can say is that it works. It’s OK to stop retirement but ONLY temporarily. AND as long as you profess to NEVER borrow money again. Even though we don’t need to anymore, we still use the cash envelope system. It’s the easiest way to budget.

We are on the good side of “living like no one else” and it’s a great place to be. Not having to worry much about money is an amazing feeling, and I do get somewhat of a chuckle when I see my peers that “look rich” and talk a big game but don’t have any money saved.

Following DR’s principles is why I’m a Tacoma owner in the first place. I already owned 4 (paid for) vehicles last year when my dealer friend offered me my 2009 Access Cab 4wd, 4cylinder manual with 137k for the amazing price of $7700. He had gotten it in as a trade in, he low balled the trade in because he didn’t want to make the deal in the first place. He offered it to me for $500 over what he got it for. Anyway, he reached out to me because he knew I was the only one who would have the money on hand to buy it quickly.

If you ever need words of encouragement or advice PM me, I can try to help you out.

 

Ramsey's advice is good for people who can't seem to control credit card use. I've always thought it's okay to have a little debt, even if it's only a mortgage. My wife and I are retired and decided last year to get rid of two very old vehicles, keep her still in good shape Jeep, get a Tacoma, pay half down and attempt to pay the balance off in 12-15 months. All done through slowly withdrawing from our IRA accounts which have done very well over the past four years. I have no problems doing that because we've already made our $18000 down payment back in four months. Who knows what the market will do for the next few years. We've saved wisely, have a mortgage, live comfortably, don't travel, aren't extravagant and buying a new truck and paying for it with "saved" investment money doesn't seem like a bad idea in my book.....particularly at my age. We love our kids but they are successful in their own ways so we're going to enjoy what we saved.

 

you need to throw more money at it! Gazelle intense!

 

Do you have a pension or live on the IRA/ social security only? I’m curious as to how the transition was for you to go from working/saving to drawing from your savings. I personally am at a point where I’ve saved enough for retirement, but I’m 15-20 years too young to retire.

My father (as well as Dave Ramsey) has always been my source of financial advice-but he’s lucky enough to have a pension along with a lot in savings. My parents have been retired for 7 years, yet live a much more comfortable life than most. They’ve been completely debt free for approximately 25 years. While most of their friends complain about “living on a fixed income” they’ve traveled the world. My dad claims that he hasn’t even touched his IRA’s or any other investments since retirement. He also states that despite what many financial experts claim, in retirement, 50% of your income is more than enough to live off of (assuming one is completely debt free).

My question to you is what it looks like/feels like to draw down from your savings? Is it stressful to see your balance get drained monthly? Is 50% of pre retirement income really more than enough at retirement? I realize that the stock market has had a very good year, so it might be hard to gauge at the moment.

 

We live off Social Security but have a good nest egg to fall back on. Our goal was to have enough put away to handle home health care costs (we hope) rather than living in a "rest home". Those things will literally suck your money away and the quality of life sucks also. Anyways, our SS handles our bills and needs which includes a low rate mortgage which we'll never see the end of. No problem. I'll pay our truck off early next year (maybe sooner) pulling $1700 a month out. Sometimes we can make that back in a few hours if the market is good. We are in a safer segment (more dividend paying bonds) which are not as volatile as the rest of our stock funds but don't make a ton of money on a good day. Just diversify is the best angle. The only way I even considered this was if the money we drew out would be "income tax exempt". Believe it or not it is. We can list our SS income plus about $20,000 a year from the IRA and still have little or no Federal or state income tax responsibilities. I researched it and ran models of tax returns before I committed. Yes it does sting a little to see the balance go down but so far it has come back but who knows? At the end of 2021 we'll take a look to see where we are and in two years I'll be forced (at 72) to take a required minimum distribution anyways. I guess my attitude is to be smart about it because we want to enjoy what we worked hard for and sacrificed and we're always saying "you can't take it with you". Maybe we're a little selfish, but as I stated, our kids are all grown and can make it like we did. I will add that your dad has been a smart man...wish I could say we were debt free on our home but we started out on this mortgage late (me 60) so I'll be ninety when it's done if I make it that far. Our four kids can decide what to do when we're both gone.

 

any update on your decision, OP?