Linda is 58 and wondering how to account for her Social Security benefits when thinking through the 25x expenditure equation. Her expected expenses are $100,000 – $150,000. How can she figure out if she’s ready to retire?
Mr. Man is eligible to retire with a full pension, health benefits, and social security at age 48. He has 20 years to go. Should he include his pension and social security benefits in his financial independence plan, or think of them as extras?
“Timothy,” a lawyer from Colorado, has $250,000 in a SEP-IRA account that’s invested in mutual funds with fees ranging from 0.61 percent to 1.06 percent. Fees on these funds are projected at $200,000 over the next 20 years. Should he and can he transfer these funds to another SEP-IRA account? What are the consequences of doing that?
Alise has dreamed of living abroad for long periods of time and wants to buy a property in Portugal before the minimum spend requirement increases. Should she go through with this, or is there another way to gain dual citizenship or travel abroad for long periods of time?
Former financial planner Joe Saul-Sehy joins me to answer more of your questions.
Do you have a question on business, money, trade-offs, financial independence strategies, travel, or investing? Leave it here and we’ll answer them in a future episode.
Linda asks (at 2:59 minutes):
When thinking about the 25x expenditure equation, how should I think through taking Social Security into account?
I’m 58, and I think that Social Security (at least 75 percent of it) is still viable for my age group. Our portfolio is $2.5M, and with 75 percent of my Social Security benefits, that comes out to $52,000 per year.
Is there a formula that we can multiply that $52,000 by to see how it impacts our retirement readiness? Our anticipated expenditure is anywhere from $100,000 – $150,000 per year.
Mr. Man asks (at 9:31 minutes):
I’m a federal employee working as an air traffic controller. I’m eligible to retire with full federal benefits (pension, health, and social security) after 25 years of service, at age 48.
I had never considered my pension or social security as part of my financial independence plan. I only considered it extra money — if it’s there in 20 years, great! If not, my plan is still sound.
Is this the right approach? Or is it better to include my pension and social security in my plans?
“Timothy” asks (at 19:01 minutes):
I’m a 37-year-old lawyer married to a 36-year-old teacher. We have two kids and live in Colorado. My wife and I would like to retire at 58, which is when she’s eligible for her state teacher pension. However, I made some financial mistakes in the past that I’m trying to rectify so that we can achieve this goal.
After graduating from law school, a financial planner convinced me to buy a $7,000 per year whole life insurance policy. I was also told to invest my employer SEP-IRA contributions in the American Funds family of mutual funds.
I cancelled the whole life policy in March 2020 and invested the $30,000 cash value of that policy in the market. (Which, by the way, was less than I put in over the years. Is no tax a win?) I’ve since put this mistake behind me, but I’m not sure what to do about my SEP account.
I have $250,000 invested in mutual funds with fees ranging from 0.61 percent to 1.06 percent. This is 25-30x the fees on VTI, the total stock market ETF I invest in for my brokerage account.
I want to break up with this financial planner and move those SEP funds from one SEP account to another in M1 Finance or Vanguard. What do you call this type of transfer? Do I need to sell everything all at once and transfer cash? Will I owe capital gains on the sale? If I owe capital gains on the sale, should I still make the transfer, or is there a break-even point?
Personal Capital tells me that in 20 years, I’ll have paid $200,000 in fees. Help!
Alise asks (at 41:14 minutes):
I’ve always dreamed of living abroad, specifically in Europe. To make this dream a reality, I had planned to invest in a Golden Visa in Portugal. To gain dual citizenship, I just need to buy a property there.
However, I just discovered that the minimum property price is increasing from $350,000 Euro to $500,000 Euro. Part of me wants to buy a property before the price requirement increases, but I also want to think this through.
Is there another way to gain dual citizenship or live abroad for long periods of time? Does it even make sense to invest overseas?
- A Simple Framework for Earning Extra Income | Article
- Stacking Benjamins Retirement Design Lab | Tool
- Curated list of retirement calculators | Can I Retire Yet? Website
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