They Want to Retire in 10 Years — Is Their Plan Strong Enough? | Suze Orman How Am I Doing?

Hi, Suze I'm 55, and my husband is 49. I'm the one who plans ahead in our relationship, and I'm concerned we won't have enough money to retire. We're so active in our personal lives But act like a deer in the headlights when it comes to our money. Our goal is for me to retire in ten years when I'm 65, and my husband will continue to work until his full retirement age. Suze, how are we doing? Hi and welcome to the show girlfriend. I have to ask you a question before we begin. In the package that we just saw, you say that you want to retire very clearly in ten years when you're 65, because you're 55 right now, you say. However, Gaetano wants to retire at his full retirement age. In your mind, what is his full retirement age that you're talking about? Suze That would be 62 All right, so if you were going to give yourself a grade as to can you retire in ten years and can Gaetano retire in 13 from right now, what grade would you give yourself? I think I'd give myself a C A C, Okay now, before I give you my grade, let's show everybody your money. All right As you just heard, Jen is 55, Gaetano is 49. They are married and they have an eight year old. They have currently $379,000 in retirement, $2,000 in an emergency fund, $122,000 in investments. Your current home value is $320,000. You have a mortgage debt of $69,000. Car loan debt of $5,600, giving you a net worth of $748,400. Anything surprised you there, my dear Jen? It's higher than I thought. Well, there you go. Well that's good. Maybe you'll give yourself a better grade. Let's look at your monthly income versus your monthly expenses. You currently have income after tax of $8,288 a month, but your expenses currently are $8,013 a month. You're not really putting anything into additional savings. So we could see that in terms of your emergency fund because it's so low. So you have an excess of about $275 per month. So if I were going to give you a grade, I have to tell you, I'm not far off from the grade that you would give yourself, although I would make it just a little bit lower and I would give you a C minus. And here are the reasons why. Even though currently your monthly expenses are $8,000, the truth of the matter is, in just three years from now, your home will be paid off. So you're putting an extra 2000 a month into your home currently. So I have that extra $2,000 to do what? to invest. You also, as time goes on, as your child gets older and everything, you won't have that $2,000 approximately per month that you're paying on schooling and everything else that goes into the child, because he's going to be essentially 18 in 10 years. So in ten years, I've projected that your monthly goal is not going to be $8,000 a month, but about $5,000 a month is what you are going to need. Now, with that goal in mind, I've still given you a C minus. And this is why in ten years when you are 65, including Gaetano, who will still be working for those next three years, you will have $6,400 a month after tax, which is $1,400 more a month while Gaetano is working than you actually need now. Gaetano retires. You both claim Social Security. At that point in time you will after tax have $6,000 a month. You're still fine, but it's only $1,000 more a month than you actually need. If one of you happens to die, you will lose one of your Social Security checks. And now we are in trouble. We're cutting it too close. If anything goes wrong, we are in trouble. So here is your way to an A. I personally think because most of us are going to live a long life in our late 80s or 90s, you need more money than you have any idea. So I personally think Gaetano should work until he is 67. You should claim Social Security at 70. It will be a whole

lot more money for you. You need to fund and get a will and a trust because your little eight year old, if something happens to you now, an eight year old is a minor. He can't inherit money. So what are you going to do? You have to plan for today as well as tomorrow. You also need to get long term care insurance. You are way under-insured because we're looking at ten years or more until you start this retirement process. So I would personally get, if I were you, an additional $800,000 of ten year level term on you, $600,000 of 15 Gaetano as soon as he retires, he collects half of your Social Security. That will give you so much money during your retirement ages that no matter what happens if one of you dies, both of you will be great.