Today’s Prep:
Are you wondering how to pay for a home renovation in retirement? Or, are you concerned about the market volatility with retirement a few years away? Eric answers three questions from the mailbag all related to making wise decisions regarding money in retirement.
(Click the featured times below to jump forward in the episode)
Equipping Points:
Should you move money into a safer place if you plan to retire soon? How do you protect pension benefits from a former spouse? When it comes to retirement planning, sometimes a situation comes up that has you asking for more information. We answer three questions from the mailbag in this episode of the Retirement Ready podcast.
Annie in Johnston writes in with a question about wanting to put in a screened in porch on her home. Should she pay for it by taking money out of her IRA or by getting a home equity loan? Assuming that Annie is retired, Eric says it can be difficult to get a home equity loan. In retirement, taking money out of the IRA may be the way to go. Ultimately, you’ll want to have a strategic plan that includes a tax analysis before you take money out.
Randall in Clive is considering his retirement timeline, especially in light of the current market fluctuations. He wants to know if it’s worth moving his money to cash now, knowing he plans to retire in the next few years. Eric says it’s important to consider liquidity, safety, and growth opportunity. While it’s helpful to have money in a safe place in retirement, you’ll still want to make sure to get growth opportunity in order to outpace inflation.
Finally, Tess in Ames will receive a portion of her ex-husband’s pension as long as he is alive. Should she take out a life insurance policy in case he passes on before her, resulting in a major loss of income? Eric says some of this depends on how it is set up with the company and may be worth a conversation with HR. A life insurance policy may require cooperation from the ex-husband, but could be a good plan if he is willing.
Listen to the full episode or click on the timestamps below to hear this week’s questions from the mailbag.
0:47 – Mailbag: Should I pay for home renovations from my IRA or with a home equity loan?
3:10 – Mailbag: If planning to retire in the next few years, should I move my retirement savings to cash and wait until the market volatility blows over?
7:32 – Mailbag: What happens to my pension benefit if my ex-husband dies?
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