Stuff happens, hopefully only small things financially.
We had a plumber that knocked a hole in the pipe (novice tech they sent…created the problem w/o knowing it), and after giving the company an opportunity to ‘do the right thing’ - to file it with their insurance, the owner showed out to be a lying sack of ….. so we took him to small claims court ($3,400 after our insurance paid $ 10 K) - insurance said it was ‘difficult’ often to ‘prove’ a water claim. It turns out the judge denied our claim “Plaintiff has failed to prove their case” – but within a few days of this we find out the judge is running for an elected District Court position, and the attorney firm the plumber used has a number of clients - which the judge wants business owners and law firms to support his election campaign (having seen the law firm present at our two times in court). #1, plumber would rather lie and use an attorney than file an insurance claim with his bonding/insurance company; #2 there are people that lie all the time, and it is a ‘game’ to them even though honesty IMHO would have been a better thing to ‘do the right thing’ (the opportunity cost with the plumber sitting in court two times). We had two bites at the apple because the first time, we filed against the owner’s name and the LLC and we should have only filed against the LLC, so we could refile an amended complaint and only pay the serving charge (sheriff’s office, $20). I think we would have won the case with the first judge (he got promoted so we had a different judge the 2nd time), but IDK if an ‘honest judge’ would have 1 plus 1 add up to the right thing. I sure hope the slimy judge feels slimy.
I underestimated our federal taxes by enough to pay a penalty (under $300 penalty). I will adjust and make sure that doesn’t happen again.
The good news is we are healthy for our ages; our kids and grandkids are healthy; we all have enough financial resources to not be strained about that. When you have your health, you have a lot.
How much less are you going to pay monthly if you refi to an interest only payment? Your new interest rate will likely be much higher, your principal amount is a small percentage of your current monthly payment, and also a refi has fees… all of that might make a refi a bad deal for you while being a sweet deal for the broker.
Also, what would happen if you for some reason decide to stay put? You will likely have to refinance again, and it doesn’t look like the rates would come down any time soon.
This is confusing. The way you phrase it, it sounds like there is an option to only pay interest if you chose. But most mortgages aren’t structured like that. So are you saying that you already have an interest only mortgage, but you’ve been paying off the principle? Or are you talking about refinancing to an interest only mortgage?
If you’re talking about refinancing, rates are so much higher now, especially with an interest only mortgage and closing fees, it’s unlikely that the numbers would make sense, unless you already have a higher rate mortgage. If you can’t afford the mortgage you have now, but it’s at a good rate and you’ll only be staying for a few years, I’d consider a HELOC to make up the shortage in your bills, rates are about 7% now.
Thanks so much for the thoughts on the refi. We can pay our bills now (H has retired and has 401k and I’m still working). Just trying to figure out a strategy where we could lower monthly bills and then I’d not be so pushed to leave our HCOL state if I were to go part-time.
I’m talking to mortgage broker tomorrow but like was mentioned - the higher interest rate than what we have (abt 4.5) might not move the needle much (monthly) after fees etc.
Dh and I are 63. His SS is more than mine. The plan always was for me to take at 65 and for him to wait until 70. FA and Monte Carlo analysis says that works best for us. Actually, I think i could take it now, and it still works better than me waiting until FRA or 70.
Anyway, if I take mine before FRA and dh had planned to wait until 70, what would I get if he dies before 70? Do i get his FRA amount or what he would have gotten whenever I claim it (like if I waited until what would’ve been his 70th birthday)? Or is it the amount he would’ve gotten at the time of his passing? TIA
AARP says the survivor benefit is a percentage of the amount deceased spouse would have qualified for at time of death (not maximum possible years down the road).
Have you run Open Social Security for another data point? (click on the box in the upper middle to add details. You an also change the actuary table used.)
Regardless, don’t’ forget a few reasons to wait (which may not apply to you): Roth conversions, qualify for ACA subsidies, remain under IRAMAA limits, lower tax bracket…
I have tried to figure this out to as my H is older than me. My understanding is, if he dies before I reach full retirement age and I have claimed early, I will not be penalized if I keep taking only mine until full retirement age, if I switch to his earlier, it would be reduced.
I worked enough with my sunset career to earn enough with SS to claim my own benefits, which I did right at 65 and that is when I retired (those extra years after an 18-year gap at higher salary gave me more on SS than as a spousal benefit). DH started taking his SS at age 65 and 7 months (even though he retired from his job at age 64 1/2) - we held out for higher SS benefits - as he had the much higher SS benefits, and as soon as we needed that extra cash flow in we took his SS and also turned on the cash stream from our annuities (neither of us had pensions).
I know with SS, if he dies, I will get a higher benefit - and it would need to be calculated by SS based on the current data (what his SS benefit currently was and the spousal benefit from that). As far as I know, since the spousal benefit from mine is much lower than what he draws from SS if I die first, he would not get a higher SS benefit.
We are both 69 now - he is 4 months older than me.
If at the time he claims SS, are you claiming earlier using your own SS benefit? When he claims SS, would you be eligible for higher SS benefit under his SS - regardless of you taking your SS earlier than FRA (at 62 or later)?
To me, you can call into SS and ask specific questions on your scenario. But I would first get each of your “Your Social Security Statement” - if you each have your SS sign in, you can print off. Unless they have changed from the last time we got our reports, the 2nd page will give a number of “Your Estimated Benefits” scenarios. The first category is *Retirement and mine stated “You have earned enough credits to qualify for benefits. At your current earning rate, if you continue working until….
Then it give your full retirement age (mine said 66 and four months, as did my husband since we were born in 1956), at age 70, and then I believe it calculates based on your current age (as ours said “age 64”) and that was correct for the date we got our report. We had three monthly benefits under these 3 scenarios.
What relates to you may be the survivor benefits - and it gives two numbers that may apply to you. Under *Survivors – “Your spouse, if benefits start at full retirement age…. “Total family benefits cannot be more than…..”
I would look at these survivor benefits under both of your reports as well, and see what the numbers there are for “Your spouse…”
For me, taking SS around age 62 (based on my own earnings) was an easy decision. My husband is 7 years older, starting taking his age70/max SS a half year later. This way whoever lives longer will get the larger/deferred benefit. (It took a while for him to agree with this strategy advised by open ss and our FA, but it made sense to me. I liked the idea of more money in our Go Go years.)
I’d be leery of a refi at this point, but it can’t hurt to research the options. Going part time might be a nice way to ramp down into retirement… hope you do find some creative ways to do so.
I think the decision is more difficult when faced with looming benefit cuts. The logical part of me says that the gov’t couldn’t cut benefits for those nearing retirement/of retirement age, but as this past year has illustrated, anything is possible.
Agreed. There’s the data, and then there are the vibes. And I am just thankful my data backs up my vibes. We have had some recent “unexpected” expenditures — hot water heater, two crowns, cataract surgery — and I’ll feel better with the extra cash in this down market. Do I think we have enough cash to not worry about a market downturn? Technically, yes. But I am the queen of the buffer.
