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retirement

172 Past Due – How Am I Ever Going To Retire?

by Derek Sisterhen on September 12, 2011

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Past Due: Radio 172 – How Am I Ever Going To Retire?

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How am I ever going to retire? I’ve probably gotten that question a hundred times over the past few years. Given the Great Recession and market volatility, it’s easy to understand the concern of so many around us that they won’t have enough money for life after work.

Today we discussed some of the flawed logic behind the notion of “retirement”. I shared some of the wildly outlandish visions I had for my own retirement at one time, and how the force of our culture plays a big role in creating a discontented spirit toward the later years in life – particularly if savings is low.

We also covered:

1) A recent study showing that if most people had to pay for the kind of retirement they desire, they would need annual retirement income of 135% of pre-retirement income; talk about expensive taste!

2) The math Certified Financial Planners use to calculate how much you’ll need in savings in order to withdraw an annual “income” similar to your former income in your retirement years.

3) The notion that one should never retire, but use their vast experiences and skills to impact those around them and their community.

If you have a specific question, I’d be happy to answer it and further cultivate the wisdom of the Past Due Radio masses. The experiences of our listener base provide plenty of insight we all can learn from; don’t hesitate to ask – I’m happy to help!

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161 Past Due – Downsize or Refinance to Boost Nest Egg?

by Derek Sisterhen on June 12, 2011

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Past Due: Radio 161 – Downsize or Refinance to Boost Nest Egg?

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Tom and Denise are dealing with a conundrum: Should they refinance their house to a great, low interest rate and pay it off in 15 years, or should they sell it, downsize, and use the freed up cash flow to fund other retirement savings? They’re in their mid-fifties and are beginning to feel the pressure of retirement.

The situation they find themselves in is very common among American couples in this age group. We’ve believed for a long time that having a house – especially a paid-for house – at retirement is a crucial component of our retirement nest egg. However, given the recent upheaval in the real estate market, many have found themselves staring at a cracked and scrambled nest egg.

Today we addressed:

1) Whether real estate should play as significant a role in our retirement portfolio as previous generations believed.

2) What the net gain in value to their overall retirement portfolio would be if they refinanced.

3) What the potential for gains would be if they chose to downsize.

Sometimes we have to be reminded of simple investing concepts like diversification in order to make the best decisions for our long-term financial plan.

Kids & Money Contest: I’m looking for stories of parents teaching their kids about managing money and understanding how money works. If you have a great story (humorous, big life lesson, etc) of what to do – even what not to do – please send it to mailbag@pastdueradio.com by Sunday, June 19th with “Kids Money Content” in the subject line. Entries will be gathered for the next few weeks and the winner will receive Junior’s Adventures, the boxed set of money lessons for children by Dave Ramsey, and a copy of my book, Get Naked: Stripping Down to Money & Marriage.

If you have a specific question, I’d be happy to answer it and further cultivate the wisdom of the Past Due Radio masses. The experiences of our listener base provide plenty of insight we all can learn from; don’t hesitate to ask – I’m happy to help!

Today’s Mentionables:

Episode 154 – Robert Kiyosaki’s Dad & Credit Scores Banks Like – In this episode, we discussed all the expenses that go into owning a home that we typically ignore when considering our “return on investment”

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Past Due: Radio 149 – Borrowing From A 401(k) To Refinance A Mortgage

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Today we took a Mailbag question from Brian and Jill. They’re paying a hefty monthly payment on their second mortgage and have been exploring the option of refinancing. The bank is willing to processing the refinance of the second mortgage – likely dropping their interest rate by almost 3% – but only if they can pay down the current loan’s balance to meet their loan-to-value (LTV) requirements.

Brian and Jill are looking at their 401(k) as a source of quick cash to help drop the balance on the second mortgage, complete the refinance, and greatly reduce the second mortgage payment. They wanted to know the pros and cons of doing this, what risks to expect, and if there was anything they weren’t aware of about 401(k) loans.

What looks like a pretty easy, simple solution can get quite tricky and messy when all the details of a decision like this are brought to the surface. I provided an interesting assessment of where they’d be financially if they just left everything as is, and compared that to where they might be 15 years from now if they borrowed on the 401(k) today.

If you have a specific question, I’d be happy to answer it and further cultivate the wisdom the of Past Due Radio masses. The experiences of our listener base provide plenty of insight we all can learn from; don’t hesitate to ask – I’m happy to help!

Subscribe to the Past Due: Radio Podcast:

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Automate It

by Jaime Thompson on December 17, 2010

A lot of us live our lives on autopilot. Wake up, get dressed, drink coffee (if you have young kids like me, lots of coffee), head to work, do the daily grind, come home, dinner, TV, bed. I’m not necessarily encouraging this as a lifestyle, but lets face it, we as Americans are pulled towards routine. Are you applying that auto pilot mentality to your personal finances? If not, why not? It allows you to stop spending time on the minutia of bill paying and gives you more time for fun things! Plus it eliminates late fees, credit report dings, the scramble for a stamp, the hand cramps from writing out countless checks. Ok, hopefully you don’t have so many bills that last one applies.

And here is the neat thing about automation, we can apply it to saving too! Remember that old adage pay yourself first. Get your emergency fund savings, retirement planning, and investing on auto pilot. We can even apply it to other saving goals…Christmas, vacations, home improvements. Remember, most of personal finance isn’t all about dollars and cents, it’s about behavior. If we automate our savings and bill paying, we know what’s left in our account each month is for the fun stuff. Before long you won’t even miss the money and it will start making money for you by accruing interest and ultimately compounding. Yes, we still need to budget each month, but we don’t need to spend hours paying the same bills every month. And how many times have you said “I should really start saving for that vacation” or “I really should increase my retirement contributions”. Stop talking start doing, put the boring stuff on auto pilot and take the wheel on the adventure of life!

(photo by mike miley)

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132 Past Due – Money & Twenty-Somethings

November 19, 2010

Past Due: Radio 132 – Money & Twenty-Somethings Right-click to download Send me your feedback or leave me a voice mail: (919) 374-0501. Leave a review on iTunes Aideen in Chicago wrote in a fantastic question about her retirement plan through work and whether she should continue contributing to it while paying off her student […]

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The Greatest Discovery of the 20th Century

October 29, 2010

When asked what the greatest discovery of the 20th century was, Albert Einstein replied compound interest. In fact he has called it “the most powerful force in the Universe”. So what is this phenomenon called compound interest you ask? It’s the concept that money grows exponentially. Oh, ok you want the English version. In essence […]

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Go Ahead, Be Selfish

September 24, 2010

We teach our children to share, to find the joy in giving, and that the world doesn’t revolve around them. Just as we try to model the social behaviors we want our children to take into adulthood, financial ideas and habits start developing at a young age. Whether we are conscientiously teaching them or they […]

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112 Past Due – Life In The Retirement Slow Lane

June 30, 2010

Past Due: Radio 112 – Life In The Retirement Slow Lane Right-click to download Send me your feedback or leave me a voice mail: (919) 374-0501. Leave a review on iTunes I stumbled upon a great new study from U.S. News & World Report about life for retirees these days. What the study revealed was […]

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110 Past Due – Real Life: Kathy Grant

June 16, 2010

Past Due: Radio 110 – Real Life: Kathy Grant Right-click to download Send me your feedback or leave me a voice mail: (919) 374-0501. Leave a review on iTunes What if you and your spouse were over age 60, staring retirement in the face, but had $130,000 in consumer debt?  That was reality for Doug […]

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