“I May Not Live Long Enough to Retire” — Suze Orman Breaks Down His Plan | How Am I Doing?

Hi, Suze. I'm 50 and my partner Jeff is 55. My mom retired at 60 then passed away shortly after and I'm afraid that could happen to me. My goal is to retire in 12 years when I'm 62 and he's 67. Suze, how am I doing? Oh, Charles, first of all, welcome. It's kind of sad when you're afraid cuz something happened to a parent that it's going to happen to you, isn't it? Yes, it is, Suze. Yeah, so I understand it, but hopefully we can do something here to know that no matter what we can make sure that you're okay. So, before we look at your financials, if you were going to continue to do everything exactly like you're doing right now, would you be able to retire in 12 years from now? That is the question. And live the lifestyle that you want, what kind of grade would you give yourself? Um I know I'm not perfect, so I would probably give myself a C. All right, so let's see if I agree. Let's show everybody your financials. You are 50 years of age, my dear Charles. Jeff is 55. You have about $400,000 in retirement, about $11,000 in an emergency fund, $28,000 in investments. You do have a current home value of $200,000, but you owe $129,000 on it. You have consumer debt of about $242. So, you have a net worth here of about $500,000. You now have monthly income after tax of about $5,899. Your monthly expenses are $3,470. So, by those monthly expenses, by the way, you're a little bit short in your emergency fund, but then I'm sure you know that. But, you have excess of about $2,400 a month. — We do put about $1,600 in savings every month. All right. So, Charles, listen. You want to retire in 12 years. I know you're saving quite a bit of money towards that. The question is, will you have enough? Will you not? I've given you truthfully a B minus cuz I have to tell you, the reason is I'm concerned that you even though you say you're saving, I want to see it. Where is it with the emergency fund right now? But, even if you continue to do everything exactly like you're doing right now, I've given you a goal of about $4,000 a month is what you're going to need. Now, if you continue to save, when you look at your pensions and you look at all of your income from your Roth IRAs, your 401Ks, everything, I only get $4,795 per month for you after taxes. That's $800 a month more than what you really need. That's cutting it really close. Now, of course, Jeff could start to claim Social Security at that point in time cuz he's going to be 67. So, after we look at everything, now with his Social Security, you're at $6,355. All right, not bad, but here is the problem. As we are taping the show right here and right now, right? Marriage equality has not been legalized. So, therefore, you are not recognized as a legal married couple on the federal level. So, listen to me closely. What that means is, if Jeff dies, you do not get his social security, do you? No. No. So, I have to look at your life as will Charles be okay if Jeff dies? And looking at the numbers, if Jeff dies, you're not going to be okay. So, here is your way to an A. You need a will and a trust. You don't have one. What are you thinking? You need long-term care insurance because here you have all this money and all of a sudden you have extra per month. Long-term care say will wipe this all out in 2 seconds. Don't do that to yourself. Jeff needs to put the extra money to work in that he should be funding his Roth IRA to the max every single month. Now, the problem that I'm having here is if something happens to Jeff. So, one thing that you can do to protect yourself, my dear Charles, is we can take out a $1 million term insurance policy on Jeff. A 20-year level term policy, which would make you 70. So, if Jeff dies before that, you'll be

okay cuz you have a million dollars of insurance. After 70, it becomes too expensive for you to have this, but if after 70, Jeff dies, then you can collect your full social security at that time and things will be relatively better. You might have to find, however, that you stay working, Charles, till you're 67 or 70, but those are the things you need to take into consideration. So, when planning for your future, always plan, will I be okay if something happens to my spouse?