I had an ex-boyfriend who was a computer science major and I remember asking him if he could build me a computer. When he said he wasn’t able to do that, I gave him a lot of flak. “How is it that a computer science major can’t build a computer from scratch? That’s like me being an English major and saying I can’t write a book.”
Oh the irony. Even though I have an MBA, I don’t know googly squat about managing money. Sure I’ve socked a lot away, but that isn’t a retirement strategy. Do I have enough? Hell if I know. When can I retire? Your guess is as good as mine.
Now that I have a baby, I’ve suddenly become hyper-responsible. I’ve retained a lawyer to create a trust for our family. I scheduled an appointment with a financial advisor I found highly-recommended through San Francisco’s Golden Gate Mothers Group. She gathered all my financial data and recently walked me through my plan. It was really informative and she advised the following:
1) Continue to max out our 401ks (no brainer).
2) Keep an emergency fund of 6 months living expenses in cash (already done).
3) Save at least $12k/year (duh).
4) Save an additional $12k/year to be able to pay private school tuition for Franco from K-12 (not a problem).
5) Rebalance my stock portfolio because having half my investments in Berkshire Hathaway isn’t smart (must rebalance ASAP, bad Catherine).
6) Supplement with life insurance for me and Dean.
All really great points that I will be acting on, especially life insurance. If you are young and healthy, life insurance is a no brainer. I should have gotten life insurance years ago! For a nominal monthly fee, I can ensure that all our debts (i.e., mortgage) are paid off and my family is provided for in case I get killed by a wayward Amazon Prime drone. Now if you’re old (i.e., in your 40s) then you’re screwed because life insurance premiums are exorbitant.
Now here’s the part that was really empowering. After decades of scrimping, eating Cup O’Noodle and maxing out my 401k from the time I was 22 when I absolutely hated my first full-time job after college, I am on track to retire when I’m 57 years old, which is when Franco turns 18. Happy dance! At that point, I can withdraw $10k/month until I die at 92 years old. How insane is that? First of all, I don’t even need half that amount to live comfortably every month. Secondly, there is no way with my genetics that I am living to 92 years old. No one in my family has lived that long.
Put this on your to-do list: schedule an appointment with a financial advisor. All of the above was free advice!
Thumbnail image courtesy of ddpavumba at FreeDigitalPhotos.net