Nolly Cabantug has repeatedly spent her career in the public and private sectors. Now, at 58, he wonders what his retirement income will be like and what he can do in the next few years to improve it.
Mr. Cabantug, a licensed practical nurse who lives in Pomona, Calif., Teaches public high-school students the medical profession. With 18 years of investment, he expects to receive about $ 1,300 per month from the state teacher’s pension program when he retires at age 62 and $ 1,800 per month when he retires at age 67.
She has paid for social security for decades, working as a nurse in the private sector during school holidays and before becoming a full-time educator. Now whether she will work long hours as a teacher to increase her pension or return to nursing after the age of 62 depends on how it affects her social security.
Mr Cabantug says he earns the equivalent of $ 42 an hour teaching as compared to $ 60 per hour as a nurse, a job that also offers the possibility of overtime.
Together, Mr. Cabantug and his wife, Mary Cheryl Cabantug, earn about $ 110,000 a year, and their 25-year-old son, Brian, stays with them to save money. Mrs Cabantug, 48, is a registered nurse at a home health agency and plans to continue working for the foreseeable future. The couple pays about $ 400 a month for her personal health insurance because she prefers to use Kaiser Permanent instead of the health insurance provided through her husband’s work.
The couple owns about $ 160,000 IRAs and $ 250,000 equity in their home They have about 20 years left in their mortgage, with an interest rate of 4.25%. Monthly accommodation costs 2,600 plus $ 880 for utilities. Families rarely eat, and they give about 10% of their income to support Philippine churches.
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They earn about $ 800 a month to rent a room in their home, and they expect to earn another $ 1,000 a month from the second rental unit of their property next year. They own a paid vacation home in the Philippines worth about $ 40,000, which they rent most of the time.
Mr Cabantug said he was interested in learning more about long-term care insurance.
Mr Cabantug said he enjoyed working in both cases. “Education builds the character of young and promising, as well as young adults who need inspiration,” he says. “Nursing cares through touch.” But if her retirement income is secure, she says, she could be in favor of flexibility, diversity and higher pay in nursing for the rest of her career.
Advice from a professional
William Houston, founder and chief investment officer of Bay Street Capital Holdings in Los Altos, California, said Mr. Cabantug deserves social security because he has worked in at least 40 qualified quarters in the private sector. But he will not accept his money. Full advantage.
Employees such as Mr. Cabantug are subject to the Windfall Elimination Provision (with rare exceptions), which reduces the social security benefits for retired workers who receive a pension based on earnings that were not subject to Social Security pay tax.
Assuming Mr. Cabantug starts collecting at the age of 67, he will be given a discount of about $ 680 a month from the $ 1,372 he receives without a pension.
Mr Houston said Mr Cabantug should be consulted for more clarity with his pension plan on how it would change if he continued teaching. She says that while she appreciates Mr. Cabantug’s focus on trying to maximize her retirement income, making a higher income as a nurse over the next few years is something she shouldn’t ignore.
Mr Cabantug qualifies for a catch-up contribution to his retirement savings, and couples should maximize tax-exempt and tax-free accounts, as is the case with traditional and Roth IRAs and Mr Cabantug’s workplace 403 (b), Mr Houston said.
The couple doesn’t spend much on luxuries, but Mr. Houston suggests that they shop for less expensive car insurance and investigate their utility budgets for more savings.
Mr Houston says long-term care insurance is expensive, but seven out of 10 Americans are thought to need care as they age. He suggested that the couple look at a policy with a return-of-premium rider, which reimburses heirs if they die without tapping the policyholder’s benefits. It costs more, he said, but it provides peace of mind.
Mrs. Gallegos is an editor of the Wall Street Journal in New York. Email him at [email protected]
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