I plan to move to Florida in three years. Will you be able to live comfortably?
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question: I’m 54 years old and can retire in two years with a $6,000 (net) monthly pension. He has $800,000 in his 401(k) and 457 plans, and he has a $90,000 mortgage at 5.25%. I plan to move to Florida in three years. Will you be able to live comfortably? What advisors can help me solve this problem?
answer: Congratulations on being able to save up a solid retirement fund in addition to your outstanding pension. That being said, there are many factors to consider when determining how comfortable retirement living in Florida will be. If you have questions, it’s a good idea to talk to a financial advisor now. (Are you also looking for a financial advisor? This free tool allows us to match you with fiduciary advisors who may meet your needs.)
Having a problem with your financial advisor or looking for a new one? Email picks@marketwatch.com.
Here’s the answer to the main question: Can you afford to live in Florida? It depends. There are a lot of moving parts when it comes to calculating whether you can comfortably retire to Florida.
The first step you should take is to create a detailed retirement budget. Consider anticipated living costs, medical expenses, travel costs, and other major expenses. “Many people make the mistake of creating a monthly budget, but they don’t always have time to budget for important milestones that often cost money, such as the cost of a child’s wedding,” says Ryan Heiss, a certified financial planner with Flynn Zito Capital Management. “I forget,” he says.
Next, you need to plan your home. “Do you want to sell your current property and buy a new home in Florida? Do you have money left over that you can invest and use as a source of income? Moving to Florida may save you taxes, but there are other “Due to the potential increased expenses and high premiums, some insurance companies are discontinuing coverage in Florida altogether,” Heiss said.
Sure, it’s good to know your interest rate and balance, but you don’t know what your mortgage will be in two years when you retire. “You’re probably selling your current home to buy another home in Florida, but you’re not sharing any home equity,” says Chris Chen, a certified financial planner with Insight Financial Strategists. and talk.
There’s no doubt that moving to Florida has its perks. In addition to the climate, the state has no personal income tax. “But consider that more people are on the move every day. Home prices are rising, so the cost of home insurance against hurricanes is also rising,” says a certified financial planner at Advice Financial. , says Alonso Rodríguez Segarra.
Another factor to consider is tax projections. “If the funds in your 401(k) are all pre-tax dollars, distributions are taxable and may result in penalties if the funds are withdrawn before 59½ years.Retire at age 57 “If you’re preparing to do that, that’s going to impact your retirement plans,” says Heiss.
It also appears that social security benefits are not taken into account. ‘Your pension may have a state pension offset, which explains why you didn’t include it. On the other hand, you may think it’s so far off that it won’t be factored into the calculation. No,” Chen says.
Should I get an advisor?
This may sound like a lot to deal with, and it is. “Working with a CFP who specializes in retirement planning is a good place to start. I always tell my clients, ‘It may be your first retirement, but it’s not our retirement.’ We learn from the mistakes others have made in retirement, which can provide valuable advice as you plan for your own retirement,” says Heiss. (Are you also looking for a financial advisor? This free tool allows us to match you with fiduciary advisors who may meet your needs.)
You may want to look for a fee-only CFP. Fee-only financial planners are paid directly by clients and do not receive commissions for financial product recommendations, making their advice less biased. To become a CFP, these advisors must have thousands of hours of work-related experience, complete a financial planning course, and act as a fiduciary. This means that advisors are expected to put their clients’ best interests ahead of their own.
Meet with at least three advisors before making your selection. In most cases, a free session and some advice will be provided for free. MarketWatch Picks has compiled a list of questions you can ask your advisor during the interview process.
Consult with the National Association of Personal Financial Advisors (NAPFA), Fee Only Network, CFP Board, or use: this free tool We will match you with a financial advisor who may meet your needs. You can choose a planner who will create a one-time financial plan for you (which you will then follow through on), or one who will provide ongoing support.
Having a problem with your financial advisor or looking for a new one? Email picks@marketwatch.com.