r/personalfinance

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41m, single income, married with 2 5yr old kids. TC: $400K.

401k: $370k

Roth IRA: $26K

Roth IRA(Wife's): $22k

529s: $15k

HYSA: $20K

Taxable brokerage: $185k

Mortgage balance: $900k at 5%

I bought a whole life insurance back in my 20s because my friends husband was
Selling it and I was a diagnosed diabetic and at that time a smoker. I was single and living on my own.. Fast forward almost 30 years and low premiums for a 100K policy.. I am divorced with a house and significant investments and was laid off this year so I am retiring at 57.. if I take the cash balance - it is about 50k and that would cover my healthcare premiums for about 4 years. Is there any reason to keep a policy anymore.
My 18 year old son will have plenty of funds if I were to pass and I don’t really plan on leaving too much for legacy- I want to enjoy my retirement while I am still young and healthy.
Thoughts on keeping of giving up the policy?

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I have an HSA, but have to switch to a new insurance plan which provides an FSA.

I was paying out of pocket for medical expenses for the purpose of reimbursing from HSA many years down the line.

Now that I have an FSA, would it make more sense to now contribute to FSA and use those to pay for my current medical expenses? Or do I continue to pay out of pocket and reimburse from HSA in the future, at least until my out of pocket total expenses surpass my HSA balance?

Edit: I think better rephrasing of question is: which of these options is better?

1. Contribute to FSA to pay for expected medical expenses or
2. Don't contribute to FSA, pay out of pocket, then reimburse from HSA in retirement.

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Trying to put together a plan for funding expenses in 2027.

Current scenario:

• 66 y/o, Single filer, retired two years ago

• Trad IRA: $600k (80/20 - S&P 500 index fund/Fixed Income)

• Roth IRA: $30k (100% S&P 500 index fund)

• Taxable brokerage: $80k (100% S&P 500 index fund) (Lump sum investment of $77k, purchased May 2026)

• Annual expenses: $60k

• Annual Social Security at FRA (age 67): $41k

• Delaying Social Security until 70: Estimated annual benefit $50k

Plan for 2027:

• Delay Social Security until 2030 (Age 70)

• Pay expenses by drawing from Taxable brokerage and Trad IRA

2027 Estimated Tax Breakdown (using this tax calculator):

• Long term capital gains: $5k (Taxable brokerage withdrawal of ~$40k )

• Taxable IRA distributions: $30k (Trad IRA distributions of $20k & Roth conversions of $10k)

• Total income: $35k

• AGI: $35k

• Total tax owed after deductions and credits: $588

2027 Plan Goals:

• Minimize taxes by utilizing LTCG from brokerage (once lump sum investment is a year old, in May 2027).

• By keeping taxes under $1,000, avoid underpayment penalty and having to make any quarterly estimated payments. (Safe Harbor)

• Minimize RMDs (which begin in 2035 at age 75) with Roth conversions and drawdown of Trad IRA.

Notes:

• Will keep Roth conversions small each year going forward; to avoid the downside of a corresponding big tax hit, and towards keeping total taxes under $1,000 for the year.

• Would like to minimize RMDs as much as possible – as they will most likely exceed what I need to draw from Trad IRA for expenses.

• Not planning on any future QCDs or legacy considerations to factor into the equation.

• If 2027 plan is solid, I'll repeat it in 2028 and 2029.

Prior to retiring two years ago I had little to no knowledge of investing, optimizing taxes, retirement, etc. etc. So I've spent the last two years being like a sponge and trying to ramp up as much as possible. Using everything I've learned the last couple years – I put this plan together by the seat of my pants. So any critiques are appreciated.

How solid is the plan?

I know the general consensus is that 401k loans are a bad idea but I have some questions about it and need convincing why it's a bad idea vs paying interest to a bank.

I'm 39 and my only current debts are my mortgage @ 2.5% and a 0% loan on a tractor which will be paid off in a few months. My vehicle and my wife's vehicle are both paid off. I need to buy a new car so I'm considering a 35k loan to pay for it. I set a strict cap at 35k because I want something that will last a very long time but I don't need to overspend. The options I'm considering are 4.59 from my bank or 8% from my 401k.

I know that the biggest turn off for 401k loans is taking away money that could be gaining interest. I have a very steady job and have no worries about losing it. My employer matches 100% of 6% which I'm currently contributing 12%. I also have a pension plan through my employer. I max a Roth IRA every year, have an individual brokerage account and a HYSA. I also collect retirement from military service, so while withdrawing money from my 401k is a huge turn off (which I agree with, I'd rather not if it doesn't make sense), my finances in retirement will still be fine.

My questions about 401k loans... I understand that I will just be paying myself back with interest. If I withdraw 35k @ 8%, does that 35k + 8% go back into my 401k, or is the 8% interest more like a fee to where I will only be putting back 35k (without the 8% even though I'm paying it) into my account? It doesn't make any sense to me why the 8% wouldn't go into my 401k but just want to verify. I did confirm through vanguard that I can still make additional contributions to my 401k while I am paying off the loan. With this option I think the (only) positive side is that I'm paying interest to myself instead of a bank

Or the other option, go through my bank and get a 4.59% loan and be paying them the interest. With this option that 35k that I didn't withdraw from my 401k will continue to make ~12% (as of right now) growth.
As I'm typing this I think I answered my own question. It makes a lot more sense to pay interest to a bank at 4.59 and leave my 401k alone so that 35k continues to grow by ~12% instead of taking it out and paying back in small increments. ????

Since I know someone will chime in about buying a new vehicle, ive ran the numbers and made my mind especially considering the state of the used car/truck market for anything halfway decent.

How do I prove income for a child to open a Roth IRA. And when tax season comes do they have to do taxes on the income?

Went to log into my account via edward jones app (FYI did not want to go with them, but that's a different story) upon login it said account closed contact financial advisor...beyond contacting that person, what does that mean...where is the money? Should I say give me a check bye? Where does this leave me?

Hi everyone!
I’m M33 Canadian citizen and I lost my brother recently. He was working in the US and had a life insurance policy which will payout the money to the beneficiary.
I am added as a beneficiary however the insurance may have more questions about this. We do not have a will.

1. What other documents can I provide to ensure smooth payout? Like an affidavit saying I am the next of kin.
2. They have given me options for a wire transfer or a paper check or an alliance account. Which one is the best one considering I have to eventually move the money to Canada.
3. Do I need to hire a financial advisor who will help me with this?

I have a cross-border US account that I can use.
I’d like to ensure I am not paying double taxes and conversion fees.
Any help or suggestions would be helpful here.

I’m 27, I earn $123k per year, spend about $2200 per month on rent + food + hobbies. I max my Roth 401k plus a 6% employer match, I have biweekly recurring investments of $900 (so $1800 per month). Is there anything I’m missing? I’m not committed to retiring super early but it would be nice! I currently have $270k in investments (Robinhood), $30k in high yield savings, and $215k in my Roth 401k.

Edit: okay gathering I should switch to traditional 401k.

My brother and I bought a house together when we were in our early 20s. We are now both pushing 30, and he has a serious girlfriend. I imagine they will want to move into their own place at some point. I may want to continue living in the house, so selling it and splitting the profit isn't the solution. I can afford to pay the entire mortgage payment.

Currently owe about $160k, mortgage interest rate is 2.99%.

I have had the same savings account forever and only recently got interested in investing and having my money make money. I have learned my current savings account has a 0.02% APY which is essentially nothing and was wondering what recommendations or advice this group has.

So far, the best I have been offered by my local banks is a 2.8% APY through Citizens bank, but google is telling me there are many other online options with up to 5% APY, except I know nothing about them.

For reference, the best I've found so far is EverBank at 4.2%.

What would you recommend? What HYSA do you use? Thanks for the advice!

I made an accidental credit card payment ($17,000) instead of my minimum payment, and usually what would happen is the bank would reverse it as insufficient funds, however due to a internal bank error the payment got withdrawn out of my checking account leaving me with a negative $17k checking account balance. The CC is investigating to send a refund check for the payment so I can make my checking account positive again, but worried it will be too late and my checking account will be charged off. Any suggestions?

How are we doing kid's phones when we get to the stage that several kids need a phone ( I get that "need" is subjective).

Currently my husband, oldest son and I have three lines through T-mobile at $150/month.

Our 14 and 12 year olds have a Gabb phone and watch which is $66/month. We have no land line so realistically they need a way to be able to contact us when they are home alone or at activities.

We have two more kids coming up and I feel like eventually this is going to be a ridiculous portion of our budget. Is there a better/more economical way to do this?

I’m 30 years old. I have about 10k in credit card debt. Owe 18k on my car payment. And I purchased a house in 2024 for 330k. My income is 75k per year.

Since being single, I’m in the negatives after my bills are paid. My mortgage is $3200 and it feels like I’m drowning. My take home after taxes is $4800. I receive $1000 in child support but it doesn’t help too much as I have 2 children in daycare, plus the expenses on essentials. The father of my children is on the title of the house but not the loan and he will not remove his name unless I buy him out.

While I’m already applying to numerous jobs in hopes of getting something that pays better, at least 100k, I’m considering converting my garage into a studio to rent it out.

I was quoted 21k including labor and materials.

Is this a good idea? I was thinking of taking out a loan but my credit score has decreased. I was also considering borrowing money from my dad in case I did want to go this route. I could rent the studio out for $1000-$1300 which would help me only need to pay $1900-$2200 in mortgage.

I’ve also been considering renting out the rooms, possibly $750-$1000 per room to cover the mortgage and me just renting out an apartment for 2k with my children.

I’ve thought about selling but houses are cheaper now than when I initially purchased. Comps in my area are roughly 20k-50k less than what I purchased my home for. Although I did do updates, I know it doesn’t have that type of equity.

I don’t receive any type of state assistance or anything. I understand that times are rough for a lot of people in today’s economy. What can I do to help myself get back on track?

Bills Include:

Mortgage: $3200
Daycare: $850
Car Loan: $450
Car Insurance: $225
Power: $250
Water: $125
Groceries: $450 (family of 5)
WiFi: $100
Phone Bill: $150
Gas: $200
Credit Cards: $600

Total: $6,600 not including costs for basic essentials

Note: I’m a remote worker in HR. I recently had to put my 1 year old in daycare so that added another unforeseen expense. My job duties doubled to tripled with my team getting riffed and it was nearly impossible for me to do my job and care for her at the same time. My pay has not been increased since acquiring a heavier workload which is also why I’m seeking other opportunities.

My long-lost closeted lesbian great aunt passed away, leaving us with a healthy windfall of approximately $125k in an inherited Roth IRA. It is my understanding according to Fidelity that 1) I do not need to do required minimum distributions but 2) I do need to cash it out within 10 years.

This does mean it needs to completely dissolve as an IRA correct? So I need to convert it to cash and then funnel that into my other index funds / ETFs as needed. Which is fine but I have a couple questions:

Does it really matter if I do that now or in 10 years? I already settled another account of hers that left us with about $80k in cash so we’re already taking the income tax hit on that this year. Am I correct that I will not pay a penalty on dissolving this inherited IRA? I also won’t pay taxes because it’s inherited and she held it for a very long time?

And then going further down the rabbit hole - we are interested in moving next year to a bigger house, will mortgage underwriters have a meltdown if we have such a huge “income” bolus this year? Should I wait to stagger the Roth IRA dissolving until after we get a house?

We have no financial burdens otherwise. We make almost $300k annually as of this year, cars are paid off, no student loans, no credit card debt, 401ks are thriving, and we have about $360k in savings. In our early 30’s.

Im retired 11yrs, 73M, single,good health,have 200k in a 3.5% savings account. I have a govt pension plus SSI and my net is 7K monthly. My VA Mortgage is 3.5% fixed and I owe 178k on a home that is valued around 700K. Question is should I drain my savings to pay off my mortgage which is $1724 monthly including taxes/home owner insurance.

Today is my 25th birthday. It has been a rumor in my family that my two siblings and I are to receive a trust from our great grandmother on our 25th birthday. My parents are divorced and it’s my father’s grandmother. He has been the one to keep the secret and will not offer any answers. I do not know where to look to find her information or if it was a lie this whole time. Please help.

EDIT: Thank you all for your advice! I have received the copy of her paperwork and I am in fact a part of it! It is real! The downside of it is my late grandmother and my father were the legal trustees. The will stated the estate to be divided 5 ways between my grandmother, father, myself, and two younger siblings. I still have no further information on how to obtain my portion but I have left a voicemail for the attorney listed on her will. Any further advice is greatly appreciated and I’ll keep this post updated when I can. Thank you all again!