My wife and I are in our 60s and have $500K saved for retirement – one expert says we’ll make it if we ‘stagger’ our benefits

A financial expert helped a couple in their sixties decide what to do with their $500,000 retirement savings so they could live comfortably.

There are a lot of moving parts when it comes to saving for retirement; syncing them all can be difficult.

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Ari Taublieb, a certified financial planner, helps people figure out how much money they need to retire comfortably.

He shares advice on his YouTube channel and recently posted a video helping an older couple who had little savings.

Luke, 66, and Mary, 64, have a net worth of $972,000 but just $500,000 in retirement savings. They want to retire as quickly as possible.

Luke has $250,000 in his IRA; Mary has a 401K with $200,000 and a Roth IRA with $50,000.

With a Roth IRA, you pay taxes on the money you invest in it, but the earnings on your investment are tax-free.

The couple hopes to pay off the remainder of their $95,000 mortgage before retiring.

They planned to spend about $5,000 a month, but wanted to set aside $10,000 annually for travel.

PLANNING

Taublieb said the couple’s financial future could be decided when they decide to collect Social Security.

“Let’s say Luke has a Social Security benefit and he says, ‘I don’t know how long I’m going to live, but I want to make sure Mary gets the biggest benefit for the rest of her life if something happens to me,'” he said.

Taublieb suggested that Luke wait until he was 70 to collect, but Mary should collect when she was 67.

Staggering your benefits in this way would ensure that both people are prepared if something were to happen to each other.

“If God forbid something happens to you, Mary, Luke will still receive his greater benefit,” Taublieb said.

“But if something were to happen to Luke, Mary would receive the greatest benefit from Luke.”

After digging deeper into their finances, Taublieb discovered the couple could retire at ages 68 and 66 and settle down for the rest of their lives.

RETIREMENT TERMS

Don’t worry if you’re unsure about the difference between a 401K and an IRA; you are not alone.

A 401K is a retirement plan offered by an employer. Employees can automatically allocate a portion of their salary to the savings account.

Most companies also offer matching, meaning they will deposit up to 5% of your salary into your 401K.

Meanwhile, IRAs are individual retirement accounts, so matching is not an option.

IRAs also have stricter contribution limits.

Where to save retirement money

There are several different places you can put the money you have saved for retirement. Each has different tax advantages, but not all are available to everyone.

401(k) – an employer-sponsored retirement account. Contributions are made pre-tax and many employers will match a certain percentage of your contributions. Taxes are paid when funds are withdrawn in retirement.

Roth IRA – an individual retirement account. Contributions are made after taxes, but withdrawals in retirement are not taxed.

TSP (Thrift Savings Plan) – a retirement savings and investment plan for federal employees and members of the uniformed services. They work similarly to 401(k)s, but may have more limited investment options.

Pension – an employee benefit that obliges the employer to make payments to the employee upon retirement. Pensions are becoming increasingly rare.

The maximum individuals under age 50 who can contribute to their IRA each year is $6,000, while the maximum for 401Ks is $19,500.

This makes the 401K seem like the best option, but it’s important to watch what happens when you leave work.

“If you leave an employer before retirement and go work somewhere else, you still have the option of rolling your 401k into an IRA,” said Brandon Renfro, a financial planner who specializes in retirement income planning.

Fortunately, there is no “worry about your employer having control of your retirement money.”

Another financial expert advised a 59-year-old man who retired with $1.9 million but no access to his own money.

Plus, see the plan that one retirement expert said is the “shortest path to riches.”