As James and Katherine Rogers reach their 60s, they want to be sure they’re ready to retire and can continue to help their two sons.
Like many parents, the Rogers, who live in the metro Atlanta area, want to be there for their children in the future, no matter what. “What keeps me awake is not being able to help them if they need help,” says Rogers. One son has already started a professional career, the other is working on a doctorate.
Mr. Rogers works in a bank and finances construction equipment. Ms. Rogers works in education. They earn around $ 200,000 per year combined and save 10% of their wages in 401 (k) and IRA accounts. They have about $ 500,000 in retirement savings and $ 300,000 in equity in their home, which they say is worth about $ 550,000. They recently refinanced a 15 year mortgage. They also have $ 25,000 in cash and $ 70,000 in cars, including a paid 2007 Porsche.
Rogers makes monthly mortgage payments of $ 2,700. For a year and a half, they will also be paying $ 500 a month for a 2018 Ford F-150 they bought for their youngest son. Other monthly expenses include $ 700 for groceries, $ 750 for utilities, $ 500 for insurance and car maintenance, and $ 800 to $ 1,000 to support their son in school.
Mr. Rogers says he and his wife would like to retire around 65 or 67, then have disposable income of $ 5,000 to $ 6,000 each month until they are 80.
Mr. Rogers recently changed jobs and suffered a pay cut of $ 90,000. The new salary, he says, is acceptable, but he fears that if his employment status changes, it won’t be as easy to find a new job in his 60s.
“Most of my life I’ve been extremely fortunate that when my current job is a problem, I never do not got a job a day or two after deciding I wanted to find a job, ”he says. “I don’t know how long I can do this.”
Advice from a pro: Gerald Loftin, senior director and certified financial planner at Proficient Wealth Counselors in Norwood, Massachusetts, says the Rogers are in good shape and on track to meet their goals. With just a few steps, they should be able to retire when they want to and be able to help their sons financially when the going.
Mr. Loftin believes the couple have the income available to save more for retirement. Relatively speaking, they don’t have a lot of fixed debt, which will allow them to save more aggressively than a lot of people, says Loftin. Maximizing their pension contributions will also help if Mr. Rogers needs a new job and is struggling to find one.
Mr. Loftin recommends increasing their cash reserves to at least $ 50,000. The money is currently going to their doctorate. the student and the car payment should help them get there within a few years, he says.
To be on the safe side, Loftin says Mr. and Mrs. Rogers should each have at least $ 250,000 in term life insurance – to at least cover what’s left on their mortgage – and ideally up to $ 500,000 each. . He would also like Rogers to explore the long-term care and disability insurance options – short and long term – available to them, through work or otherwise.
The planner also urges the Rogers to design a solid estate plan in consultation with an estate attorney and explore creating a trust that would further protect their assets and their ability to pass them on to their sons. Trusts can help in terms of protecting against creditors or in the event of divorce, he says.
Mr. Kornelis is a writer in Seattle. He can be contacted at firstname.lastname@example.org
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