I spent way too much money my first year in retirement (pensions, vacations)
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Just seeing this thread for the first time and to be honest I'm not sure why there is such panic. You spent $15,000, some on furniture, you did not take on huge debt or destroy your complete savings. You still have a pension and your 401 in addition to a paid off house. Given the other financial crises we see here your's appears to be pretty minor.
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.
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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 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?
There is no logic to it. It's usually emotional and often irrational. You want that gorgeous new in-ground swimming pool but you also want to keep your $40k in savings. So you buy it on credit and try not to think about the fact that you are now in debt. Which, if you want to keep your savings (and you do) means a monthly payment you hadn't planned for in your retirement budget.
Fortunately, lounging by your sparkling new pool with its natural rock waterfall and classy-looking fire bowls helps you relax and postpone worry for another day. Until your spouse decides he wants an outdoor kitchen with a swim-up bar, because he's always wanted to do that Tom Cruise "Cocktail" thing. That sounds pretty good to you. More relaxation, right? People will be eager to come over. You've already got the pool payment, what's a little more?
Trust me. Having gotten myself into an enormous amount of consumer debt, I know how this works. Besides, there are examples of it all around us. If you ever want to see something chilling, try the David Duchovny/Demi Moore film "The Joneses":
OP you only had 30k in savings and assumed you were ready for retirement?
Get rid of your plastic as IMO it is mans and woman's downfall. You'll never live comfortably in debt.
OP you only had 30k in savings and assumed you were ready for retirement?
Get rid of your plastic as IMO it is mans and woman's downfall. You'll never live comfortably in debt.
OP also has a 401 with an unknown balance as well as a pension.
Look on the bright side, you figured out the problem and the solution. I assume the lesson learned means your will be ok for the rest of your retirement.
I think I would keep working until the CC is paid and the 30,000 is back in the bank. You may find you enjoy the part time work and end up doing it for fund. I know a few retirees in their 70's that work part time because they enjoy it.
I was just talking with an acquaintance who still works at her old job, about 6 to 8 hours a week, at age 86. She says that it is the best of all worlds, she gets to see her former co-workers, the job is very easy (she is a receptionist) she gets to talk to interesting people when she is at work, she gets a little bit of extra spending money, plus they let her take off if she ever needs/wants time off.
OP you only had 30k in savings and assumed you were ready for retirement?
Get rid of your plastic as IMO it is mans and woman's downfall. You'll never live comfortably in debt.
What on earth gave you that idea? I said I had $30k in a cash account. If that was my only money I would never have retired. Obviously I have other sources of income, a pension, Supplemental Security as well as my TSP account.
What on earth gave you that idea? I said I had $30k in a cash account. If that was my only money I would never have retired. Obviously I have other sources of income, a pension, Supplemental Security as well as my TSP account.
I haven't commented but once previously. I did then and even more now understand your question and I think others are becoming more understanding.
As some have noted you have no problem and could if you wanted to take the tax hit use your TSP account to pay the debt off.
I would disagree with others and suggest if income and assets are high enough using a HELOC is not unreasonable. You can pay the higher interest CC debt off and pay the HELOC off with monthly income. If a emergency came up you may well have the investment income to pay the HELOC many fold. Only you know that. We don't.
You are a new retiree and worried about getting in a pattern that can if continued create problems.
You asked your question in a forum of many different people with many different retirement income situations etc etc.
You have not shared your pension amounts or your TSP accounts or your Supplemental Security so we have no idea what the ratio of your debt to assets/income is.
You noted you had 30k in your cash account. Many in this forum and in general don't have that much in a tax sheltered account much less a after tax cash account. Think about that your situation compared to what you read from many in here and elsewhere. Different beast or similar beast.
I am juggling money to pay for a home addition right now and yes it involves multiple accounts including a HELOC for short term maneuvering. Paying it off is a key stroke away but it does involve for a minimal fee accounting security.
I am 85,retired in'88 and have no credit card,I pay for what I need and have no debt.No use in spending tomorrows money.you might at some point need it.
I did have a credit card when I was working with $20,000 limit and charged very little.
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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.
