30% is a reasonable upper limit. Most should do less but if you live in HCOLA then 30% might be reasonable. But all the above caveats apply.

Agree -- that's reasonable.

A couple with two or more defined benefit pension plans indexed to inflation might have a small "nest egg" but the actuarial value of the pensions can be in the millions.

Yes, but a pension is a double-edged sword -- trust me, I've been turning over numbers and making decisions about my pension and Social Security in the last year, and it's complicated -- so many moving pieces. Because it's tied to my lifespan, a pension is the best and the worst.

If you sell to buy another, you'll still make that choice probably based on your income.

We've always tried to make decisions based upon what we NEED rather than how much money we have available.

That's why some of my similar-income friends who drive a Lexus or Range Rover look askance at me when I drive up in my Honda Civic, but I will probably never own anything other than a Honda Civic. I really LIKE my car and don't "aspire" to more.

Net worth and wealth are largely immaterial when discussing retirement. It is much better to think in cash flows.

Yes, cash flow is a different question -- and one I've been studying lately. I will retire in June 2022, and for DECADES I've felt I've been on solid ground: my husband and I have earned and saved, have lived below our means, and we've watched our assets grow. Now that it's time to transition into living off those assets, we're trying to determine which options are best for us -- and no one clear answer emerges as to cash flow:

- My pension is the obvious Step 1, and since I'm younger and in better health, it's probably smarter for me to take the maximum benefit for myself, but IF I should die first, that cuts into my husband's cash flow.

- Should we take Social Security early and accept less forever ... or dip into our savings? Should one of us "take early" while the other waits? It seems to us we should preserve the savings, which are a "more sure asset", as savings can be passed on to a remaining spouse or a child ... but it stings to think we've paid into SS since we were teens, and we would be accepting less now.

- And insurance is its own special nightmare. As a teacher, I am fortunate that I will have basic insurance for my lifetime for $25/month (and someday I'll have that + Medicare), and I can cover my husband -- but his coverage will cost 20% of my pension. Ouch -- and it's eight years until he qualifies for Medicare. But at least we have the choice; we have friends who are remaining in the work force JUST for insurance.

Regardless, a note for all younger posters out there: SAVE. As we approach retirement, we are a bit befuddled by the financial choices /transitions we must make, but we are so thankful that we saved from a young and and have options!

What I'm making in the market right now is a lot more than the interest I'm paying for my mortgage. Even if the market were to drop by 1/2, I'd still be ahead because if the market were to drop that much, so would housing prices.

I understand this viewpoint, and on paper it makes sense -- but I grew up without financial security, and very few things in this world please me more than knowing my house is mine, mine, mine. Every brick, every door, every window. When you've been a kid who literally laid awake at night worrying about groceries, shoes, and electricity, math doesn't always come out the winner in these arguments.

Regardless, my house is a very small part of my financial portfolio, so mortgage /no mortgage makes little difference to our bottom line.

Never “borrow” from your investments or life insurance. If you don’t have the cash available for a down payment and the income to pay the mortgage, you shouldn’t be shopping for a house.

That's just good common sense.

Also, I anticipate downsizing eventually so what is my “dream home” now will not be my dream home then.

Yes, definitely. As I approach retirement, the idea of committing difficult-to-retrieve resources into a large house -- and then the ongoing costs and maintenance of a large house -- are unappealing to me.

Never “borrow” from your investments or life insurance. If you don’t have the cash available for a down payment and the income to pay the mortgage, you shouldn’t be shopping for a house.

I think what you meant to say was never borrow from your retirement savings.

You shouldn't have cash available waiting to make significant purchases in my opinion. I get paid on the last day of the month, on the first day of the month, any money that wasn't spent from last month's pay gets invested in a mutual fund. Twelve times per year I will transfer all of my unspent pay to my mutual funds and I have been doing that at least 12 times a year for almost 30 years.

If I have a big purchase I have to take money out of my investments.

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As for the advice to not borrow from retirement savings. I would counter that better advice is to stop buying things you don't need. There are absolutely times I have recommended borrowing from retirement savings because it was necessary. That is rare and is generally something I would avoid if it were not mathematically advantageous, but sometimes it is.

You don't really need a lot of wisdom to make good financial decisions. A little bit of research, a little bit of self control, and a little bit of math works wonders.

I would counter that better advice is to stop buying things you don't need.

Probably the best piece of advice on this thread.

@maifleur03 I don't mean to be harsh, but your comment is incredibly poor advice and unwise thinking. Please continue to learn about investing and financial planning.

"I would counter that better advice is to stop buying things you don't need.

Probably the best piece of advice on this thread."

Good heavens, no. I don't want to live a minimalist existence with only what I need. I do agree that it's important not to buy things you can't afford, though.

Good heavens, no. I don't want to live a minimalist existence with only what I need. I do agree that it's important not to buy things you can't afford, though.

Who in the world said that not buying things you don't need means a minimalist existence?

There is a legitimate and recognized need for happiness. I guess "need" is a subjective term, a better way of saying it maybe stop confusing perceived utility with actual utility. However, then you are getting into the economics of decision making.

There is no perfect witticism for this, which is why I use math. Financial wisdom is the purview of radio talk show hosts and for everyone else, there is math.

short answer - decide what is important to you, work within your means, and make financial decision accordingly. there is no one size fits all.

I am not sure this is the appropriate place to get into this discussion, but here we are.

In general, people are pretty bad at figuring out their zen. In my experience, people make a lot of bad financial decisions because they are chasing status rather than happiness.

I do a lot of free financial advising for our community and I can't count the number of times that someone has walked into an appointment and talked about their dream of travelling extensively. Then we look at their income and they bring home $4,000 per month but have an $1,800 house payment and an $800 car payment when they don't even like driving.

kayozzy you are wrong. I myself was turned down for a car loan two years ago with a 800+ credit rating because I had no active credit usage on my report. I have known people who when they needed a new roof had to accept higher than normal interest rates when they did not want to dip into their savings. You can receive loans but at a much higher rate than if you have active debt. That active debt could just be an occasional use of a credit card.

Mrs Pete talk to your pension coordinators about how much each option will cost if you reduce both of your pensions to give the other person a benefit if/when one of you dies. It may not be that much. Secondly ask what happens to each of your pensions if the spouse dies first. We both selected reductions so the other one would at least have a second income. When my husband died my pension increased by the amount that was being offset. Not all pensions will allow that. but it is good to know. Good luck on your retirement and be glad that as a teacher you can receive social security as many states do not allow that or the SS is offset by part of the pension.

In my experience, people make a lot of bad financial decisions because they are chasing status rather than happiness.

What if chasing status gives them happiness? What may seem shallow to some, might be all the depth others possess (devil's advocate channeling buddha here).

I myself was turned down for a car loan two years ago with a 800+ credit rating because I had no active credit usage on my report.

That would be solely based on income, as no credit use would lower your score a bit anyway. You can have a 500 FICO and get a car loan if you have income that covers the payment.

No onthetree with my income paying outright for a Subaru Outback would never be a problem. The paperwork that I was given stated I was turned down because of lack of recent credit history. I had no problem receiving a zero interest car loan for a different car. I knew from other older people that this was often a problem I was just not ready for it.

Do some research. Also think back to when you were younger. You could obtain credit but at a higher interest rate or if your parents co-signed. As you age you tend to revert to childhood status.

What if chasing status gives them happiness? What may seem shallow to some, might be all the depth others possess (devil's advocate channeling buddha here).

What does that have to do with what I said? I was discussing status over happiness and that doesn't preclude status as happiness. So there really isn't a devil's advocate thing there.

I happen to be a CFP and one of the exercises I will do with community members is have them rank the things that make them happy. Then we look at where their money actually goes and what we often find is that they spend their money on things that don't generate marginal happiness but do generate marginal status.

There is also a lot of research behind that idea and now, even a Nobel prize for it. I am not breaking new ground here. People are actually pretty crap at putting their money where it will make them the happiest. So if status makes you happy, then so be it. However, if you're just destroying happiness keeping up with the Joneses, then just stop doing that.

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As for credit...

Various credit programs can and do require more than simply a good credit score. Notice that credit offers always say "to well qualified buyers," rather than setting acceptable credit scores. There are a lot of teaser credit offers that have specific requirements other than credit scores. These certainly may include a recent history of payments.

There is certainly an advantage to maintaining some installment loans as well as some revolving credit as we know credit mix matters.

maifleur, do you use a credit card? I don't have a mortgage but use a credit card constantly so I do have a recent credit history.

BTW, I also don't want to buy only what I need, where's the fun in that. My rule is if I can afford it, I can buy it.

BTW, I also don't want to buy only what I need, where's the fun in that. My rule is if I can afford it, I can buy it.

The problem with debt discussions are that most of the advice is objectively wrong. You can't beat math for solving math problems and there is no wisdom that will compare to that.

Debt is a tool, and like any other tool when used well it has productive capacity and when used poorly it has destructive capacity. I owe a significant amount of my current financial stability and comfort to debt. The problem is that too many people confuse debt with overspending. When I say stop buying things you don't need... I meant stop using credit to do so... However, even that advice is crap compared to just mathing it out.

The advice to not borrow from your retirement can be objectively wrong. There are many reasons that borrowing from your retirement might be a great move. For example, many 401K's limit the money you may move between investments, so if a client has invested too conservatively you can take a loan against the 401k, invest that money in a better performing investment and you have effectively moved the money.

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I will argue... Stop buying crap that you don't need has worked wonders for the people I see who spend too much on crap they don't need. Is it objectively correct? No. However, neither is if I can afford it I can buy it. There are lots of things that I can afford that I probably shouldn't buy.

No I had not been using my credit card but living on what was my current income for the just over four years my husband was in the nursing home. Now I do use the credit card to make certain I show active credit. If I could afford to pay for my husband's nursing home I can damn well pay for a car.

Having worked for banks when younger I knew that one of the criteria that we were supposed to reject applications was no current active credit. I just never thought about it until it happened to me. I do wonder even after all these years the explosion if I had not recognized the CEO of the bank's name.

Mrs pete, you say your husband is older than you, he will be 65 in eight years, which will make him 57 now. So you must be retiring at 55 or 60, is this correct? And when you say should "WE" take social security early do you quality for benefits? Some teachers retirement systems don't pay social security tax and aren't eligible for social security benefits.

If all the above is true I'm going to be honest, I don't see any reason to not say your husband will need to work until he's 66, pay for medicare part B and a supplement. With cash flow being a concern I'd also suggest that you continue to work until the husband retires to be fair, and it will add to your own pension check. Many American's have no choice but to wait until full retirement age to draw social security and see nothing special about your situation so just keep on trucking. . the difference between 62 and full retirement age is about $500 a month.

About your spousal survivor's benefit, I don't believe you can purchase it after your retire, depends on your plan but buy it. I have an annuity with spousal survivor benefits and not buying it was never an option. All my life I never accumulated so much debt to where one of our incomes couldn't cover expenses. Even after retiring my monthly cash flow covers 100% of the expenses with money left over and doesn't include a nickel of my wife's income, and she has her own nest egg and I have mine. If I died her income would also cover 100% of the monthly expenses without me and I'll die knowing she'll be OK. I've always lived within my means without touching our nest eggs and resisting the temptation of spending on luxury. Soon I'll be forced to withdraw minimum distributions and I guess at that time I'll splurge.

You sound level headed, feet on the ground and know your priorities but you need to work longer for a goose which will lay a couple of extra eggs. So many are giddy over the gains in their investments over the last 10 years but gains take the stairs up but the elevator down, so over night those 10 years of gains could disappear. Get a bigger goose.

@maifleur03 The same thing happened to us a few years into our debt clean up! That is the one bad side effect of going to only cash!!

We stopped using credit, paid off everything, then saved up cash (and then some) to buy a new truck. We were confident in our debt paying abilities and decided to finance it: the online loan service through our bank denied it, even with a 750 score. To say we were taken by surprised is saying it lightly!! We called the bank and made an in person appointment to see WHY this happened! At first, the loan officer was in program mode and just explained it was because we had no active credit within the last 72 months. We told her to pull up our bank account, take a look at our balance, and asked her to seek advice from her manager. It was a different tune then, but we had to settle with a slightly higher rate than what we were suppose to get.

I'm just glad we learned the hard lesson of active credit at age 28 than later in life. We still don't use credit cards, but we save up for new vehicles, keep the cash easily available, and loan out the amount to always keep the credit going. We are seriously considering a credit card like the ones that gain points.

Debt free when we bought our Outback in 2017 for 0%. Didn’t make sense to pay cash when there was no savings in doing so. We do use a credit card but it’s paid off monthly.

People never believe what I wrote until it happens to them so thank you for confirming. I do suggest a credit card along with charging then paying off in a couple of day something you need or want even if it is a candy bar. It keeps your activity active. There are many things that are connected to not having active credit usage. One of the people in my Y group moved to senior housing and had to pay a bigger deposit for everything connected because she did not believe in using a debt and had everything done in cash.

The Costco affiliated card from Citi gives you real cash back. We use it for most everything.

I love my Chase Sapphire Preferred. I put everything I can on it and pay the balance off every month. I don’t give them a dime in interest but the points pay for my vacations each year.

Continuing on the car finance thread tangent, @maifleur03 I am not talking about keeping general credit active, that is a given in a debt-infused framework our economy is structured on. My "research" with retirement age car purchases consists of sitting right next to them during the process (beyond my own 1st-person experience and mining car industry friends) and seeing both denials and approvals similar to your situation.

A big factor is vehicle purchases are a unique monster. It's a negotiation, and the type of dealer and the banks they finance through vary, and having a simple steady paycheck will get you a car no matter your credit, but does not guarantee they will sell you that particular car. It's much more complicated with incentives (dealer, not consumer), quotas, buyer commitments, etc to say being denied is only based on not having active revolving credit (whilst having a high score). You would think having a Subaru on a lot means they want to sell it to someone asking to buy it, but that is not always the case, at least right away. However, in my experience, having income well above any threshold of a car gets you that car, or any others you want at the dealer, because the footnotes on your credit report aren't important. Of course YMMV.

FWIW about 0% financing, you pay more up front. The dealer will not go down as far on the price for a 0% manufacturer subsidized loan compared to a bank interest loan.

It's a negotiation, and the type of dealer and the banks they finance through vary, and having a simple steady paycheck will get you a car no matter your credit, but does not guarantee they will sell you that particular car.

I am unsure about your assertion. Certainly, most people with income can get a car but that most people can get a car at a reasonable interest rate. Being turned down for a car loan doesn't mean maifleur03 was turned down for EVERY car loan.

Active credit matters, it definitely has an effect on your ability to get financing. To what extent that is an advantage or disadvantage is another question. Some low interest loan programs want to see active installment credit. When we lived in the Middle East we were obviously under Islamic financing, and when we moved back to the states we struggled to get a decent rate on a car loan. While I was an expat, I maintained a small bit of revolving credit and did keep my cards active so I had good history, good utilization, good score, but no history of significant loans for quite some time.

At the time our debt to income ratio was practically zero and would have been around 2% after the loan. They just rejected the advertised loan special and so we went to a credit union and got a decent low interest loan.

FWIW about 0% financing, you pay more up front. The dealer will not go down as far on the price for a 0% manufacturer subsidized loan compared to a bank interest loan.

Zero percent loan programs are usually manufacturer incentivized loans and the difference is made up from the manufacturer, most customers will be given a cash back or zero percent loan incentive. For all practical purposes that cash back represents prepaid interest. Dealers will usually make the same deals, as they have incentives available at certain levels of those loan programs that are more profitable than the retail markup on interest rates.

That is not always the case but it usually is. If you are stuck there are present value calculators that you can use to switch between the two in order to find the best interest rate.

Thank you Bry for a nicer answer than I started to give before reading yours. I did find it interesting difference from onatree describes because most seniors have some type of steady income and the dealership never asked me to do more than sign a release for the credit check for the lending company both at the dealership I was turned down at and the one I purchased the car from.

Certainly, most people with income can get a car but that most people can get a car at a reasonable interest rate. Being turned down for a car loan doesn't mean maifleur03 was turned down for EVERY car loan.

Thank you Bry for a nicer answer than I started to give before reading yours.

Not sure why either response here, never once insinuated or disagreed about finance rates, no need for active revolving credit, or Maifleur even did anything wrong. Simply, she wanted that Subaru and they didn't give it to her, and I submitted that you can't decidely blame it on having no active revolving credit accounts (they must show something about denial). You can have a FICO of 850/900 and it can footnote "credit score is affected by too many accounts with balances." A mortgager can't overlook that footnote, a car lender (manufacturer lender vs regional established vs high risk national) may or may not, depending on their internal basis for qualifications on a loan. As you know each FICO value (active credit, length of time, amount of unused credit, etc) has a weighted effect on your score anyway, and if you already somehow have an 800+ score without revolving accounts, paying off one credit card $50 a month on a $1K limit won't change your score enough to make a car lender swing one way or the other.

You may have the income to not even talk about how to pay until you walk into the business office. But if you have to meet an income threshold, that financing for many dealers becomes part of the negotiation (the salesman has been mining you all along about what method you'll pay, what you do, your life situation, etc).

So the Subaru being denied solely on active credit could very well be the reason from that lender's framework. Or with limited inventory could be Maifleur wanted a car that they want to keep on the lot for the color or options until they get more sales bank orders. Or they're putting that exact color into demo for the owner's wife next week and the sales manager and internet staff didn't have updated info. Or the salesman made a verbal deal the General Manager later overrode the Sales Manager, slow to communicate. Seen all these happen.

Back to the regularly scheduled thread.

No, you only stated that anyone could have a car if they had the correct income which while it has some factor toward a credit score has nothing to do with having a current credit history. Re-read what you wrote. First you implied if I had the right amount of income I could purchase a car but perhaps not the car I wanted. Telling me that you assumed I was too poor to purchase what I wanted. Now you are telling me I did not understand. I do not know what paperwork your parents had to complete but no one asked or required me to enter my income on any document. When I asked I was told it might be needed on the final paperwork.

To get back to the regularly scheduled thread people do need an active credit history if they are expecting to receive a loan or pay a much higher interest if they can obtain a loan.

(And note that "active credit history" does not mean a debit card. We should have had our kid get a credit card, not a debit card, as her first "card" -- she ran into the "you have no credit history" problem when renting her first apartment and had to pay an extra month's deposit.)

Yes, a debit card is just an electronic means of writing a check, so it basically tells a credit agency that a bank account exists, and nothing much more.

I never understood the attraction to a debit card if one qualified for a cash back credit card.

jrb I have used a debit card for years because I could not see the need for a second credit card although I now have one. Although they have been around since the 1980s it was probably only in the last 20 years that there has been an increase in what you could receive cash back for on a universal basis rather than just purchases in a particular store or other business like airlines.

"I never understood the attraction to a debit card if one qualified for a cash back credit card."

I use it at small businesses and mom-and-pop places instead of a credit card, because it doesn't cost them as much (in service charges) when I use it. I use my credit card in other places.

"I never understood the attraction to a debit card if one qualified for a cash back credit card."

Some people don't have willpower when a credit card is involved.

Debit cards still have fees, around a 1/2% so I carry a big wad of cash for the mom and pop places but not to be nice. The last time I had my credit card number stolen was from one of those mom and pop businesses on a road trip to South Dakota. NEVER again and I carry cash, and never use a card at a sit down restaurant where they take your card in back and return it. I always use cash but the niceness comes when the waiter gets tips in cash and I say "don't pay taxes on that cash".

"Debit cards still have fees, around a 1/2%"

Here the fees are per transaction, not a percentage of transaction, but it does save carrying a big wad of cash ;)

I've always viewed debit cards as a way for banks to pull money out of your account faster than with a check, and we pay them for the privilege. And I've always marveled at how they can pay you trivial amounts of interest on your money -- if they pay any at all -- but take 2-3% for you to use an ATM, which allows them to also cut back on human staffing at branches. And don't get me started on the loan shark rates they charge if you don't pay off your credit card balance each month....

One of the advantages of using a national bank is that I can find their ATMs almost everywhere so there are not ATM fees. I also have the required minimum in my account so I can do this. Any amount of interest that I might loose from paying paying via debit vs time lag paying my credit card is so small as to be unimportant in these days of low interest.

I have had my debit card number "stolen" but I can not pinpoint a place that it was taken although I have suspicions of where it was skimmed and it was no direct human involved. Did not loose anything. Was notified when it happened. Received a new card the next day. same as I would have if it was a credit card.

"I've always viewed debit cards as a way for banks to pull money out of your account faster than with a check,"

That shouldn't be a problem -- you shouldn't be writing a cheque if you don't have the money in the bank to cover it now.

"but take 2-3% for you to use an ATM"

I don't know where you bank, but I don't pay any fees at all when I use an ATM.

I'm not advocating writing rubber checks. But I will point out that carrying a checkbook and maintaining the register each time you write a check often leads to better money management by individuals, and a reduction in impulse purchases. The instantaneous nature of a withdrawal by using a debit card was just an example where it seems like all the changes made in the the last couple of decades have little to offer in terms of customer service but a lot to do with squeezing the customer. Some banks even charge for the privilege of interacting with a human teller when you need to make a transaction with your own money.

As regards no-fee ATMs, I agree...but it's not an option easily available to everyone.

maifleur- It is important to recognize that debit cards don't have as robust consumer protection in place as credit cards in case of fraudulent use. I won't go into the details, but it's easy enough to google.

It depends on the bank and individual state laws. The main difference is credit cards purchases can be reversed if the credit card company feels the reason is valid. Debit cards are only reversed if there is fraud and not just because you dislike the product or the company.

Having worked although long ago with two different credit card companies the idea of more robust consumer protection while there is basic protection not all customers are treated equally. A lot has to do with your bank rather than the credit card company. When my card number was used in many places around the world the bank could have just turned it over to the card fraud investigation area and let me wait for the money to be placed back into my account which is what some banks do. Mine did not. The bank and the debit card company both carry insurance incase I was trying to defraud them so they had no reason not to return the money to me.

If you or anyone is concerned about using a debit card I would suggest that they not use a check because that too can be stolen, reproduced, and used.

We've been looking at retirement homes in another region (now suspended during the pandemic). Our choice regarding price is this: the cost for the retirement house, closing, moving, and some limited new furnishings will not exceed the combined net proceeds of a condo my husband sold a couple of years ago and the townhouse we now live in. Note that the condo only had about $5K left on the mortgage and our current home is paid off. So the net proceeds are basically sale prices minus realtor fees and our portion of closing costs. Since we are moving to a somewhat lower-cost area, this actually allows us to upsize and have enough space for the kids & grandkids or other family to visit and have sufficient space and bathrooms.

We will have a year or so of overlap when we have two places and will carry a mortgage on the new place for that year, but when we sell our current place, we'll pay it off. While I totally understand the concept of carrying a low-rate mortgage and having money invested in mutual funds instead, being entirely debt-free is something we find more comfortable.

A couple with two or more defined benefit pension plans indexed to inflation might have a small "nest egg" but the actuarial value of the pensions can be in the millions.

Doesn't this depend on the survivor benefit? When my dad dies, his pension dies with him. A friend who has been widowed is not able to specify another survivor now that her husband has passed--he would have gotten a 50% survivor benefit if he outlived her, but now the pension dies with her. If my husband dies, I get his entire IRA and if I predecease him, our two daughters get the whole thing.

Mary_md the short answer is no. The actuarial value of the pensions means all of the pensions in the plan not just an individual pension. An IRA is not a pension it is only part of future or current retirement income.

But if the pension dies with the recipient, it has no long term value for the surviving spouse.

Also, in addition to possibly losing a spouse’s pension income when that person dies, many people aren’t aware that as a surviving spouse you cannot continue to receive both your and your spouse’s social security benefits, only one or the other, whichever is greater.

It would depend on how the pension is written along with what survivor benefit if any is available and selected. I am receiving my husband's full pension although it was recomputed back to when he retired. I did not understand but based on my age at the time of his retirement it reduced by $35. Was not going to complain. But then he selected 100% spousal death pension benefit. My pension increased because the offset to provide him a 50% pension ceased. Neither amount that the pensions were reduced was very much. Couples do need to look at what both parties have as far as pension's and death benefits such as life insurance and can you continue with the employee health coverage. A single person pension will normally cease at the time of death an like social security some may need to be paid back, normally the last month.

At one time the spouse was not required to agree to anything the other person selected. Gone are those days but there are still too many that do not understand what they could be entitled to when their spouse passes away. I wish I could say I have never known a spouse that was left with only the social security after their spouse died because they signed so that the spouse's pension would be the maximum amount.

Edited to add the other thing that widow/widower's are not aware of is that their income taxes may become higher because they are paying with the single rate but on a married income.

Mrs Pete talk to your pension coordinators about how much each option will cost if you reduce both of your pensions to give the other person a benefit if/when one of you dies. It may not be that much.

I've done it. We're 95% sure we'll go with max-pension for me alone -- but we have until March to decide for certain. I'm younger than my husband, I'm in better health, and I come from a family with super long-lived genes (seriously, we joke that we're part vampire 'cause we're kinda un-killable). We're in agreement that naming my husband as beneficiary isn't the wisest choice; yes, it's a gamble, but isn't everything in this discussion a bit of a guess?

What I've played with is the idea of naming one of my daughters my beneficiary -- or, and this is the one that really intrigues me -- naming my grandson (who will be born October 2021) as my beneficiary.

What intrigues me: I started teaching in 1992. If I were to name this new grandson as my beneficiary and he were to live to 100 (not unlikely), the state would have paid me (or my beneficiary) for 129 years. 30 years of work = 129 years of pay. No wonder companies are distancing themselves from pensions.

Why I've decided not to do this: I drew out a timeline including my retirement year, my children's likely retirement years, this grandson's likely retirement years -- and the bottom line is that IF I were to name one of my children as beneficiary, she wouldn't get the money until after her retirement -- money would be nice, obviously, but it'd come late in her life. If I were to name this unborn grandson, he would be well entrenched in his career.

I think I can serve them better by maxing the pension and saving /investing a part for them -- and although some assumptions are involved, math supports this idea. My youngest just finished college, and I'm of the opinion that the best way we can help our children is to educate them -- then they have the tools to provide for themselves for the rest of their lives. I'd rather save /invest and be prepared to help that grandson earlier in his life -- see him well educated in his youth rather than feather his middle years /retirement.

Also, I can only name one beneficiary. I'd trust either of my daughters to "share nicely" with the rest of the family -- but the grandson is a total unknown. He literally isn't born yet, and IF I left the pension to him, I'd want him to share it with the family (not keep the benefit to himself simply because he has the good luck to be born first in his generation).

My goal for my grandson is to invest a lump sum for him (once he's born and has a name and SS number) that will grow so he can have $2000/semester + $2000 as a college graduation gift. We're thinking this will be for his books and incidentals.

A good friend of ours just died, leaving 2-year old and a 5-year old grandchildren behind; that's why we're determined to invest a (fairly small) lump sum for our new grandson NOW. If we should die unexpectedly, that money would already be set aside for him, and we'd leave a letter in our Death Notebook explaining our plans for him to have money for each college semester.

Good luck on your retirement and be glad that as a teacher you can receive social security as many states do not allow that or the SS is offset by part of the pension.

Thanks! Teaching is a job that "pays" only if you stick it out for a whole career (in the same state), and our retirement benefits are good.

Yes, I'll be able to collect SS too (not for some years). Yes, I'm in a state that gives teachers SS -- well, I say GIVE, but that's not true. I've paid in quite a bit over the years. Ditto for my pension.

What if chasing status gives them happiness?

Truthfully, I don't think chasing status can every bring happiness because -- perhaps excepting the Queen -- someone will always have more. Status is a moving target.

I myself was turned down for a car loan two years ago with a 800+ credit rating because I had no active credit usage on my report.That would be solely based on income, as no credit use would lower your score a bit anyway. You can have a 500 FICO and get a car loan if you have income that covers the payment.

Some 20 years ago -- the last time we financed a car -- the person at the bank jokingly said, "We don't see this often." Our credit score wasn't just good: it was perfect. Some time later -- after we paid off our house -- we found out our credit score had dropped. We were more financially secure, but our credit score was lower. That's when I decided I don't care a fig for credit scores; instead, I care about financial security. This incident really illustrated to me that they are not the same measurement.

I think credit scores are important when you're young, but once you're solidly established, their importance diminishes.

People are actually pretty crap at putting their money where it will make them the happiest.

I do believe that, and it's usually due to poor planning and spur-of-the-moment choices. New clothes and fast food, for example, are short-term pleasures.

There are lots of things that I can afford that I probably shouldn't buy.

This is definitely true. For all of us.

Mrs pete, you say your husband is older than you, he will be 65 in eight years, which will make him 57 now. So you must be retiring at 55 or 60, is this correct?

Your sleuthing is quite close to the truth.

And when you say should "WE" take social security early do you quality for benefits? Some teachers retirement systems don't pay social security tax and aren't eligible for social security benefits.

I live in a state where teachers pay into both teachers' retirement AND SS, so we can collect from both. After one more year of school I'll have 30 years, and I can begin to collect my pension regardless of my age. It'll still be years 'til I can collect SS.

If all the above is true I'm going to be honest, I don't see any reason to not say your husband will need to work until he's 66, pay for medicare part B and a supplement.

He's already retired, and he's on my teacher insurance. I can continue to insure him after I retire next year, though it's quite expensive -- I'll "get a raise" when he qualifies for Medicare.

With cash flow being a concern

Not so much a concern as a decision that must be made. Once I retire, we will need to dip into savings of some sort (as long as I'm paying my husband's $$$ insurance and we aren't yet collecting SS).

We have investments; the question is, which accounts to use /how logistically to start this process.

the difference between 62 and full retirement age is about $500 a month

We've "mathed it up" and have decided to take SS at 62. Our thought process: we'd rather take SS and maintain our savings /investments. Once we're gone, SS stops; whereas, if we maintain our actual money, it can be passed on to our children. And we feel that money/investments is more sure than future SS checks.

We are seriously considering a credit card like the ones that gain points.

Assuming you're not tempted to over-spend, credit card rewards points are the best! We buy every loaf of bread and every gallon of gas with our credit card -- and we "play the game" of paying attention to which spending categories are paying extra this month (so if grocery stores are paying 5% next month, we might put off a big stock-up shopping trip), and we get a couple hundred free dollars every year.

We typically use them to buy generous restaurant gift cards for our senior citizen parents for Christmas -- being retired and needing nothing, that's what they love to receive.

The dealer will not go down as far on the price for a 0% manufacturer subsidized loan compared to a bank interest loan.

I think I'm pretty good at negotiating a car's price. I start by telling the dealer which car I want /insisting that we will discuss one thing and one thing only: the total, out the door price. I never trade in my old car, and I say I'll discuss financing once I know the total price.

Thing is, car salesmen do this every day, all day, and they will beat you -- if you allow them to start throwing around multiple numbers. I sit there and say it to the point that they might think I'm simple:

- I don't want to talk about payments. I want to talk about the total out-the-door price.

- I don't want to talk about financing. I want to talk about the total out-the-door price.

- I don't want to talk about add-ons. I want to talk about the total out-the-door price.

Only after I have the final price will I say HOW I intend to pay for the car (though I've known from the start).

When we bought my new car 12/31/2019, we'd emphasized total out-the-door price, and we'd emphasized that we were tight on funds because we were paying college tuition. I am sure the dealer thought we were poor as church mice (and we were in jeans and sweatshirts), but they were sure they were going to "make up" the low price to which they finally agreed in financing. The guy's eyes just about popped out of his head when I wrote a check for full price. I could see, "Well, damn" in his eyes.

We should have had our kid get a credit card, not a debit card, as her first "card" -- she ran into the "you have no credit history" problem when renting her first apartment and had to pay an extra month's deposit.)

Yes, I started each of my girls on a checking account and a (small balance) credit card -- not a debit card -- when she was a senior in high school. During that year I encouraged her to use the credit card rather than cash, and I monitored her use /helped her balance her accounts every month. My girls went away to college comfortable using something other than cash.

BUT they both needed me to co-sign when it came time to get them an apartment.

I have used a debit card for years because I could not see the need for a second credit card although I now have one.

We prefer Discover -- it gives the best rewards and we have a long history with them, BUT it isn't accepted everywhere. So I have a second credit card; I change it out every year or so depending upon who's offering me money to take a new card.

One of the advantages of using a national bank is that I can find their ATMs almost everywhere so there are not ATM fees.

Yes, when my husband was still working /traveling for work, we kept our checking at a national bank. Now that he's no longer working, we use a local credit union (where I've had accounts since I was 17), which treats us much better.

When we travel, we stop at grocery stores fairly often for this or that, and it's easy to get "cash back" from them instead of ATMs. Years ago that wasn't a choice.

Doesn't this depend on the survivor benefit? When my dad dies, his pension dies with him. A friend who has been widowed is not able to specify another survivor now that her husband has passed--he would have gotten a 50% survivor benefit if he outlived her, but now the pension dies with her. If my husband dies, I get his entire IRA and if I predecease him, our two daughters get the whole thing.

That's why it's so important to choose carefully -- once you're retired, you're locked into the choices you made.

I did not understand but based on my age at the time of his retirement it reduced by $35. Was not going to complain. But then he selected 100% spousal death pension benefit. My pension increased because the offset to provide him a 50% pension ceased. Neither amount that the pensions were reduced was very much. Couples do need to look at what both parties have as far as pension's and death benefits such as life insurance and can you continue with the employee health coverage.

Yes, and since all of us have a different set of assets as we approach retirement, we have to study our choices -- and what's right for one couple may not be right for another.

yes, one does need to consider all of the 'what ifs?" When Dad retired he had to allocate how his pension would go (Mom not only was a SAHM but also had been diagnosed with MS). In fact, Dad retired early (62 yrs) to stay home with Mom and provide a 'better quality of life' for her.

He though she would outlive him. Thus he 'portioned' out the pension so that she would get a larger portion.

He was wrong, he outlived her by 8 yrs. So he lived on the smaller portion and SS.

Fortunately, Mom had a cousin who although married, never had any children; their wills were set up that Mom would inherit, which she did not very long after Dad retired. That inheritance made a HUGE difference in how they were able to spend their remaining years; with Mom's MS just the pension and their SS certainly would not have enabled them to live as comfortably as they did.

I think it is wisest to find a good, highly recommended financial advisor, and work with him/her. My father did well with the one I now use (actually Dad's retired about 20 years ago, but his son responsibly filled his father's footsteps). Everyone's situation will be different.

Constructing the house was a planned use of funds - and I did end up with minimal overage in fees (in construction time, not so good here). Now that I am retired, I am spending less money, because I don't need to spend as much (no commute gas, no need to buy frequent work clothing, and TBH, my rural corner of MA has a better cost of living than my old corner of CT), but allowing myself a few splurges without guilt. Although I admit 2020 was an "easy" year to save money. Nutin' Happenin!

Find a financial advisor prior to retirement. Some companies (including where I worked) offered seminars on what you need to know, and some of this will vary slightly from state to state. Advice on long term health care might be invaluable.

If you are just getting by prior to retirement, all of this will be MUCH harder - all the more reason to get sound financial advice, as well as to pay yourself just about whatever you can prior to that date.... into reasonably sound investment plans that you don't touch. Could be a small sum, but if you are lucky, a relatively large amount.

One of the advantages of using a national bank is that I can find their ATMs almost everywhere so there are not ATM fees.

Ahem, not so fast here. I've never used an ATM until about 2 years ago. Now that I live off in the middle of nowhere, it is important. My local bank is not a large bank, but I can use ATM's not specific to my bank. BUT, for me, more importantly, my original Connecticut bank (about 25 - 30 branch offices) is a good mid-sized bank, and I have maintained my account and loyalty with them. It was they who noticed I was getting scammed on my PayPal account - which I'd set up for them to provide payment from. It was they who worked out a good way to deal with as much of this hellish nonsense I underwent late May through mid-June. I can't picture Bank of America having any such concern. I've been with that CT bank since I got my first bank account, and they've been wonderful all along. And while I could have used ATMs through the CT bank, I had never felt the need to - until now when I live too far away from any bank in general. (SO I have a small account in a MA bank up here, and I do have/use the occasional ATM transaction.)