[USER]

As a retired couple, aged 69 and 56, we benefit from living with our son, thereby eliminating mortgage payments and utility expenses for our primary residence.

Our rental property’s mortgage, totaling $2,000 monthly, has an outstanding balance of $209,000 at 3% interest and is projected to be paid off by 2034.

The sale of another rental property has provided us with $250,000, now held in a Fidelity money market account, in addition to the $200,000 we have in a traditional IRA.

Our monthly expenditures total $7,500, leading us to question whether our spending is sufficient or excessive to ensure a sustainable retirement.

Are there any software tools or methods available to help us evaluate this?

We have $1 million in cash, money market account and in property value.

[Deborah]

I’m in a couple of caregiver groups. I say this with the all the kindness possible.

PLEASE start thinking and planning when this house no longer suits your capabilities- physical or mental.

I see soooooo many posts about kids feeling trapped caring for their parents. Will carrying for you limit his ability to care for his family, spouse or kids?

Limit his career choices and advancements?

The 56yo statistically has more time before needing extra help, but one of you will eventually need additional help.

Please don’t make your son promise to never put you in a “home.” Your needs make evolve to need that.

It’s unfair to expect him to provide all your housing, care, emotional and physical support.

[Jenny]

All the projections of how long a portfolio last are based on investing the money in the stock markets.

If it’s not invested, you don’t have protection against inflation because your money would not be keeping up with inflation with the interest rates in MM.

I’m curious, what do you spend $7500 on when your housing costs are free?

[Nancy]

What is your income? Spending 90k. You stated the rentals outflow what is the income? Is SS being taken yet by the 69 year old?

If not what will that number be next year?

Assuming the person is eligible

[Cindy]

Can you count on living with your son rent free forever or could that change?

[Dave]

$7,500/month in spending would necessitate a $1.8 million nest egg with the newer 5% Rule.

That said, one of you is eligible for Social Security — are you already taking it?

If not, do you know how much that payment will be?

And how much it will be for the other spouse when they reach retirement age?

[Brittney]

How much of your expenditures are needs vs wants?
Also, you need to factor in if your situation changes (i.e., you cannot live mortgage free anymore).

I would just first start with logging all of your expenses for a year in a spreadsheet first.

Then you can start to see how far your savings will go.

[Ernest]

“whether our spending is sufficient or excessive to ensure a sustainable retirement.

Are there any software tools or methods available to help us evaluate this?”

Since you already have Fidelity – use their tools(Full View, etc.).

[Sarah]

Looks like you need to invest most of the cash and money market account, because that won’t keep up with inflation.

[Laila]

It will be important to plan for long-term care costs, near the end of your two lives.

There is often a point that comes when we need more care than we can reasonably provide for ourselves, or than our adult children and their spouses can provide for us.

It is important to have a significant amount of funds available to cover costs in a nursing home, Board & Care Home, and/or memory care facility.

It would be a good idea to research and find out the average monthly costs of both a nursing home and memory care place / unit, in your area.

Depending on where you live, and whether you end up preferring a larger nursing home or a Board & Care Home, it seems like the non-memory care home places are currently costing about $5000 to $12,000 per month.

That number is generally going up faster than inflation… At about 5% per year, I believe?

It would also be a good idea to tour at least about 3 to 7 different facilities in your area, to get an idea of which kind offacilities you and your spouse would likely prefer, if need be.

Of course, there is often a period of months or years when one can pay for in-home care to provide extra help, but near the end of life that usually becomes untenable, because 24 hour care is needed, and that is equal to three shifts per day , which can cost as much as about $250,000 per year, from my personal experience.

it would be wise to meet with an elder care, attorney, so that you can see the best way to set aside and have access to funds for long-term care.

[Joel]

Your spending is LIKELY NOT sustainable given your liquid assets.
That said, there are some good modeling tools to help you better understand Retirement Finances.

– Boldin
– Pralana Online
– Retiree Portfolio Model
– Flexible Retirement Planner

My strong suggestion is to:
– Develop a set of goals and priorities
– Understand your Income, Expenses and Cashflow Needs
– Invest by assigning each dollar a job, a use-by date, and a risk-profile.

Lots of resources if you are a DIY type but it takes effort.

Alternatively, there are flat fee Financial Advisors who specialize in Retirement Planning.
Best of luck …

[Author]

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