Dear Dave,
My husband and I both lost our jobs over a month ago. I’ve been interviewing, and he started a two-week training program for a new job the other day, but right now we’re in survival mode. We just cashed in an annuity, and were wondering if we should pay down debt and reduce the money going out each month, or just live on it?
- Veronica
Dear Veronica,
I’d sit on the money for now. It’s raining, and you need an umbrella. Don’t misunderstand me. You need to be honorable and pay your debts, but you may have to put that on hold for a while. Right now, it’s more important to keep food in the house and keep the heat on. Make sure you hug on each other a lot, too.
This kind of situation is scary, and can be very stressful.
It’s been a rough winter for you guys, but it sounds to me like you’re seeing a light at the end of the tunnel. The great news is that the light isn’t an oncoming train! Your husband is about to start making money again, and it sounds like you’ve got some possibilities. Through this stretch, honest communication can make a huge difference. Make sure your creditors know what’s happening. Let them know that you want to make things right, and that you will make things right as soon as you can.
God bless!
- Dave
Dear Dave,
My husband has been active-duty Navy for 22 years. He plans to stay in for 30 years, and retire with a pension equal to 75 percent of his base pay. Considering that he’ll receive that money, should we still go ahead and save 15 percent in a Roth IRA for retirement?
- Megan
Dear Megan,
That’s a pretty nice pension, so I don’t mind if you turn down the retirement saving a notch or two. I’d be okay with 10 percent instead of 15, but I still want you guys to save lots and lots of money!
Even though a military or government pension seems pretty stable, you should never rely on things that are beyond your control. So, don’t assume the Navy is going to take care of you. I’m not knocking the military, Megan. I just want you to have a separate nest egg over and above what they will provide. If something unforeseen happened and your husband couldn’t make it to 30 years, you guys would need an additional source of income more than ever!
- Dave
Dear Dave,
I’m in the middle of filling out an application for life insurance, and they are asking me for my net worth. Is there a formula for figuring this out?
- Sheila
Dear Sheila,