Paul suffered a stroke at 48. He’s on disability and feeling lost. How does he figure out what’s next?
Should Ashley’s aging parents spend a third of their retirement savings on a house?
Margaret is wondering if she could use her 401k for a down payment and save on her taxes.
An anonymous caller is concerned she won’t have enough access to cash if she retires at 50. Is an Indexed Universal Life policy the right solution?
Former financial planner Joe Saul-Sehy and I tackle these four questions in today’s episode.
Enjoy!
P.S. Got a question? Leave it here.
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Here are the details:
Paul asks (at 02:45 minutes): I’m 48 and on disability from a recent stroke.
I’m doing pretty well, but I can’t move my right arm or hand. I can type slowly with my left hand, but with the mild aphasia I suffer from, my company doesn’t want to put me out there and I don’t disagree.
I have up to a year of long-term disability at $10,000 a month and I plan to stay on my insurance as long as possible.
I feel like I should go back to work, but I’m not sure I want to. I’ve enjoyed being around the house.
What should I do?
My wife and I own our home outright. It has two apartments that we rent to our kids, and we make $1,000 a month combined from them.
We have $1.6 million in retirement accounts and two investment properties under construction that we owe $400,000 on.
My wife’s small business makes between $200,000 to $1 million a year. Including the property it sits on, it’s worth anywhere from $3 million to $5 million.
I make a lot more money when I’m working, probably twice as much. But my existing work will likely disappear the minute I come off disability.
I know you can’t make a specific recommendation and it’s impossible to answer a question this big, but I’m lost. Do I work or not?
It’s likely too early to retire, so what do I do?
Help!!!
Ashley asks (at 21:22 minutes): Does it make sense at my parents’ age to buy a home for $350,000?
My dad is 81 and my mom is 76.
They rent an apartment for $2,500 a month and they have $1,000 in additional expenses.
They have $700,000 in mutual funds and Roth accounts and $300,000 in cash. They don’t have any long-term insurance or life insurance.
I hate for them to waste money paying rent and I’m wondering if this would be a good investment in case they need it as a nursing home later on.
Margaret asks (at 33:35 minutes): Should we save cash for a down payment on our next investment property? Or use a 401k loan to reduce our tax liability?
My husband and I house hack a four-unit in Chicago that we bought in early 2021.
The building needed a lot of renovation, which we covered with savings and cash flow from my job. We’ve stabilized the project and we’re planning for our next purchase.
Our combined income is $200,000. We have $40,000 in cash and save $4,000 a month after my 401K contributions.
We’d need $60,000 for our next down payment and additional cash for a likely renovation.
Since I only contributed $10,000 to my 401K this year, should I max it out and then use a 401K loan for the purchase?
I could borrow up to $50,000 which could cover the down payment and cash reserves.
We’d plan to pay down the loan as quickly as possible and it doesn’t appear that I’d lose the ability to make further contributions.
Is this a good idea or are we playing with fire?
Anonymous asks (at 49:33 minutes): My financial advisor recommended that I invest in Indexed Universal Life (IUL) Insurance but I’m not sure if this is a smart move for me.
My goal is to make work optional by age 50. Given that goal, my advisor suggested that IUL would allow me to bridge the cash gap before I can tap into retirement savings at age 65.
I’m a single 41-year-old woman and I don’t plan to have children.
My base salary is $185,000, with an annual bonus ranging from $50,000 to $80,000. I recently started saving and investing 50 percent of my income.
I bought a home in 2020 on a 20-year mortgage. It’s worth $675,000 with $317,000 left on the loan.
I have $92,000 in a Roth IRA, $40,000 in a traditional IRA, and $400,000 in my 401k.
I have $162,000 in a brokerage account that I regularly contribute to. It’s a mix of individual stocks and funds, with $30,000 of uninvested cash.
Outside of the mortgage, I don’t have any debt, though I’m thinking through how best to fund a $40,000 home improvement project this year.
The information that my advisor provided is compelling, but I’m not familiar with this vehicle and some of it sounds too good to be true. I found articles online that mention high fees and more risk.
What’s your take on Indexed Universal Life?
Resources Mentioned:
How to Transition to Your Dream Career, with Ashley Stahl | Podcast
Get My Out of This Crappy Job, with Jenny Blake | Podcast
The Unspoken Rules That Could Cost You Thousands, with Gorick Ng | Podcast
Should I Rent or Buy? | Blog
Simplifying is the Smarter Choice | Blog
The Early Retirement Episode | Podcast
SEPP 72(t) Distributions | Infographic
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