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But I have somehow the idea this is a more american thing than european thing (I am from europe) and buying stuff on credit is less common here.
This makes no sense at all to me because you can still pay with a regular "bank card" (not sure what the right term is). A bank card that is not a credit card.
I have one of those and use it... I can just use the money I actually have.
To me it makes no sense what so ever to buy stuff on credit that you either can't afford (so you do not have the money) or can afford (because you do have the money) but buy on credit.
Why would people want to pay MORE then necessary for stuff?
Makes purrrfect sense to me, use reward credit card to pay for grocery, utility, insurance bills. You know, stuff that you write a check to pay (my God, I hope you aren't that check writer in front of me at the checkout!). I don't pay a cent more than your check, balance paid in full every month. I get points which means when I travel, miraculously flights or hotels are free! So in a sense, you are the one who is paying MORE then necessary.
It's possible in Europe they don't have a lot of reward cards due to regulations, so you just don't know about their benefits vs. a debit card.
Unless your pension is very fat and forever that tiny "retirement account" isn't going to do much....whether 10K or 30K doesn't matter much. That is, at most, a year of "extras"....
So your choices are to either get ahold of MUCH more money (any inheritances headed your way)...or pull out the spreadsheet and be poor and happy.
Unless your pension is very fat and forever that tiny "retirement account" isn't going to do much....whether 10K or 30K doesn't matter much. That is, at most, a year of "extras"....
So your choices are to either get ahold of MUCH more money (any inheritances headed your way)...or pull out the spreadsheet and be poor and happy.
The OP has a separate retirement account. The now 15k that was previously 30k is just after tax money like a emergency fund while still working.
One of the basic retirement moves that pensioners are wise to strive for is having a solid to large after tax savings/investment account independent of their work place retirement account.
This enables you to have access to significant funds without creating tax liabilities. For instance if you need significant dental work, HVAC replacement, a new roof etc, you have the funds available to pay without impacting your retirement fund beyond RMD's or planned withdrawals.
Also this is great with credit cards as you can put a significant expense like HVAC replacement on CC get the points and use the funds to pay the card off without any interest. We did this earlier this year when we replaced two HVAC units.
So this is embarrassing but I am posting here for advice, not judgement as I already have done more than enough of that on myself.
I retired April, 2017 with a paid off mortgage and over $30k in cash savings, no debt other than a car payment and a 401K account. Apparently and much to my surprise, I have no impulse control Although I have an adequate pension, I am over $15k in credit card debt I still have my 401K, my home is still paid off but I HAVE about $15K in CC debt.
Quote:
Originally Posted by City Guy997S
Odd that you mentioned "no debt other than a car payment and a 401K account".....401K shouldn't be a debt.
Are you smacking your head because you failed to comprehend correctly what the OP wrote? (j/k) ;-) Now, admittedly, your error was partially the result of the OP failing to use a comma after the word payment, but you still should have been able to figure out what was meant. Even though it was fairly obvious that the OP wasn't referring to the 401(k) account as debt, I'll C&P the sentence for you below, this time with the missing comma included, to make it easier for you to ascertain what was meant:
I retired April, 2017 with a paid off mortgage and over $30k in cash savings, no debt other than a car payment, and a 401K account.
So just an update on our current situation, we decided to take most of our immediate cash savings out of the bank to pay down the debt. If feels great! We are doing the snowball thing with the remaining amount. I have several per diem job offers, and the remaining debt will be paid off soon. I plan to use the income from the per diem job to bolster our savings and continue traveling. I don’t plan on touching my TSP account until I hit the age of RMD. Thanks again for your very helpful comments.
So just an update on our current situation, we decided to take most of our immediate cash savings out of the bank to pay down the debt. If feels great! We are doing the snowball thing with the remaining amount. I have several per diem job offers, and the remaining debt will be paid off soon. I plan to use the income from the per diem job to bolster our savings and continue traveling. I don’t plan on touching my TSP account until I hit the age of RMD. Thanks again for your very helpful comments.
Good to hear.
Now don't let us catch you making another thread like this again.
I never understood this: why do people use a credit card (and gets "debts") when they actually have the cash (he has $30k savings) to pay for the stuff they buy?
What is the idea or logic behind buying stuff with a credit card if you actually can afford it with your money?
I put most things on my credit cards. I actually have the money in my bank when I do it. I get 1% cash back on the amount I charge on one card and reward points on the other which I use for hotels when I travel. When the charge shows up online at the credit card company, I pay it off. I do not carry any credit card debt. A credit card is somewhat more secure than a debit card also.
I recently put $15,000 USD on my card for new flooring/carpet. I paid it off, paid no interest. The credit card company sent me $150.
How much is in your TSP account? That is an important piece of the puzzle as to whether your initial retirement spending is objectively a serious concern.
I put most things on my credit cards. I actually have the money in my bank when I do it. I get 1% cash back on the amount I charge on one card and reward points on the other which I use for hotels when I travel. When the charge shows up online at the credit card company, I pay it off. I do not carry any credit card debt. A credit card is somewhat more secure than a debit card also.
I recently put $15,000 USD on my card for new flooring/carpet. I paid it off, paid no interest. The credit card company sent me $150.
Bada Bing. Doing a floor via Costco and their Citi card can create a ton of benefits/savings without incurring any interest.
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Although I have an adequate pension, I am over $15k in credit card debt
I still have my 401K, my home is still paid off but I HAVE about $15K in CC debt.
