The Doctor’s Bill: Empty Nest Dilemma
For an audio version of this post, please click on the speaker icon (top left).
Welcome to this episode of The Doctor’s Bill (Can You Afford It?).
Wonder if you should buy that big ticket item or not?
Well here’s your chance to have a wealth management expert, Johanna Fox Turner, of Fox & Company Wealth Management analyze your overall finances and make a final verdict on whether or not you can indeed swing for the fences and splurge on yourself or whether you should just walk away.
[Johanna and I have no current financial relationship]
Disclaimer: This is not meant to be a substitute for paid professional advice but only meant to serve as a suggestion/guideline.
The following are the details from our submission form:
Empty Nester Home
On A Happiness Scale of 1-10 (10 Being Happiest), rate what this item/experience will do for you A) Short Term and B) Long Term:
Short Term: 8 Long Term 8
Her: 53 Him 54
How Many Years Till Planned Retirement?
What is your total household income?
$350,000- varies and may be more, depending on side gigs.
What is your % Annual Savings Rate? (savings/gross income)
30% (Includes 401k contribution from employer of $27,000)
Primary Home Equity (Market Value-Debt) [For Renter =$ 0]
$600-625k (conservative estimate)
Additional Real Estate Holdings Equity (Market Value-Debt):
Current Liquid Asset Value (Savings, Checking, Etc.):
Retirement/HSA Combined Value:
Miscellaneous Asset Value:
$1,231,200 (taxable account)
Student Loan Balance:
Future College Plan Funding Needed (Today’s Dollars):
$0 (Already paid for 4 years of state college for two kids plus two years of med/graduate school for each.
Future Parental Support Funding Needed (Today’s Dollars):
Additional Future Obligation Support (Today’s Dollars):
How do you plan on paying for this item/experience?
Any other pertinent information not addressed?
Current Annual Living Expenses:
Living Expenses If Buying New Home:
$100,000 ($27,000 mortgage will disappear if paying cash for new home.
Estimated Annual Living Expenses In Retirement:
$120,000 (will budget health insurance and travel expenses 🙂 )
Current Property Taxes:
Property Taxes on New Home:
$18,000 (same city so just $2,000 more than current tax bill)
Homeowners Association (New House):
Where Extra Cash Came From:
Husband had previous job with annual bonus which we always socked away.
No inheritance or gifts–all earned on our own quite literally through blood, sweat, and tears.
What will we do with extra cash after paying for new home with cash:
Probably will put it into CDs.
We were pushing 60% equity allocation before the recent market correction and need to maintain a fixed income since we are already investing in the market each month through husband’s 401k.
We want to start gliding toward 50/50 allocation prior to retirement.
I guess the recent correction rebalanced us because we lost nearly $200,000 in the past few months. 🙁
So do these soon to be “Empty Nesters” get to fly the coop to find a new roost?
Or do you think if they shell out that kind of money, they risk cracking their nest egg ?
Click on the Doctor’s Bill Image and find out the verdict:
After you see the verdict please come back to this page and comment whether you agree or not with the decision (and no cheating by looking at comments first!)
If you would like to submit your own Doctor’s Bill request please fill out the submission form.
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Even a steadfast DIY’er can sometimes gain benefit from the occasional professional input.
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