This Woman Avoided Financial Advisors Like the Plague - Until She Turned 50




  • In Business
  • 2019-02-10 20:00:00Z
  • By GOBankingRates
 

I celebrated my 50th birthday last summer. With a planned retirement date of Aug. 1, 2029, it was time I scheduled what I have been dreading for years: a meeting with a financial planner. Just as some people avoid the dentist out of fear, I've avoided talking to any financial planner or advisor for the same reason.

Seeing headlines like "How Long One Million Dollars Will Last in Your State" scared me, especially - I have nowhere near that. In all honesty, my savings are pathetically low. I started to wonder if I had created a future for myself where I depend on my kids' generosity.

Read More: How to Maximize Your Social Security Benefits When You Retire

I spent money foolishly in my 20s and 30s. Whatever my family wanted, we bought. I drove new cars, which I traded in way too often. We traveled. I didn't plan for retirement because I was married to someone in the military. My retirement plan was to enjoy his military retirement.

Then, in my 40th year, everything happened at once: we separated and eventually divorced, and I walked away from a house purchased at the height of the real estate bubble by entering into a deed instead of foreclosure. I'd hit rock bottom. With little savings, I didn't want to go through the process of finding a financial planner and meeting them, only to have them shake their head at my foolishness.

The Meeting

But, I did it. I bit the bullet and sat down with the financial planner. And, you know what? It turns out that I'm going to be fine.

I made a really wise decision back in 2002 by working for local government. I moved to San Antonio in 2006 but returned to North Carolina in 2008, and I hadn't cashed out of my North Carolina State Employees' pension plan. I'm one of the lucky people who can count on a decent pension check as long as I work for the state until Aug. 1, 2029. And, considering that I absolutely love my job, that won't be a problem.

More on Retiring Comfortably: States Where Your Retirement Will Cost Less Than $45,000 a Year

Though my pension will exceed my projected Social Security benefits, it won't afford me a comfortable living. I can start receiving Social Security benefits at age 62, but my planner recommended not accessing them until at least age 67. He explained that for every year after 67 which I delayed the benefits, the amount would increase by 8 percent. Fortunately, I still have time to decide how long after age 67 I want to wait to tap into those funds. The combination of my pension and social security should be sufficient for me to live comfortably, though not luxuriously.

Since calculations for retirement are now made with a life expectancy of 95 (crazy, right?), my financial planner explained that I needed only enough money in my accounts (401K, IRA, Roth-IRA and savings) to substitute the Social Security benefits that I will not be collecting during years 61-67. Phew! That seems a lot more manageable than the million dollars or more people suggest.

Do You Know? The Best 401k Companies

Future Steps

I was glad to find out that I made some wise decisions without realizing it. At this point, it feels more manageable to think of saving money for retirement to cover only a short period, to survive rising healthcare costs as I get older and for the extras, like travel, which I want to keep doing in retirement. Last month, for instance, I went to Belize for the second time because I might retire there. With a lower cost of living, good medical care and easy travel back to the U.S. to see my grandchildren (eventually), living abroad is a good option for me.

Meeting with my financial planner turned out to be a boon to my self-esteem. I know where I need to focus my efforts, too. I have homework: I need to learn how my money is invested, what my healthcare options are and more about the Social Security benefits I might lose if I decide to remarry. But, knowing the questions to ask is better than the big "what ifs" I had in my head.

If you haven't met with a financial planner yet, I recommend doing it sooner rather than later. I wish I had done it throughout my life.

Read More: Survey Finds 42% of Americans Will Retire Broke - Here's Why

We make money easy. Get weekly email updates, including expert advice to help you Live Richer™.

This article originally appeared on GOBankingRates.com: I Met With a Financial Planner for the First Time at Age 50

COMMENTS

More Related News

Bernie Sanders' Social Security Expansion Act: What You Need to Know
Bernie Sanders' Social Security Expansion Act: What You Need to Know

The presidential candidate renewed his call to boost Social Security's protections -- and taxes.

3 Top Tech Stocks to Buy in February
3 Top Tech Stocks to Buy in February

If you're in the market for technology stocks, these are the ones worth your attention right now.

13 States That Tax Social Security Benefits
13 States That Tax Social Security Benefits

Are Social Security benefits taxable? You better believe it. Uncle Sam taxes up to 85% of your benefits, depending on your income, and several states tack on a state tax of their own. West Virginia, for one, treats Social Security benefits the same way as the feds. Other states tax Social Security benefits

Don't Even Think About Claiming Social Security Until You Understand These 3 Things
Don't Even Think About Claiming Social Security Until You Understand These 3 Things

You could lose thousands in benefits if you're not informed.

Nearly 50% of Younger Workers Think They
Nearly 50% of Younger Workers Think They'll Be Ready to Retire Between 45 and 65. Are They Right?

It's a lofty goal. But is it attainable?

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business

facebook
Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.