We love using the podcast as a platform for answering questions that people might not want to bring directly to us just yet. Listeners from across Connecticut and the northeast come to us with a variety of financial planning topics, and most of them ask about things relating to that stage right before retirement.

On this episode of the Money Wisdom podcast, we take seven different questions from pre-retirees and try to provide as much guidance as possible based on the information provided.

Questions About 401(k) Accounts

A handful of the questions today focus on 401(k) accounts. This retirement account is one of the most popular savings tools for investors, and it can be a powerful resource if used effectively. We’ll talk about why it’s not a good idea to pull money out of a 401(k) to pay off debt, why consistent contributions are critical for long-term success, and whether a company stock match is worth maxing out.

How Much Do You Really Need for Retirement?

As you build that 401(k) account along with other savings, how much are you going to need for retirement? This is one of the most common retirement questions people ask. A general guideline says 15–20 times your annual salary will be enough to cover you. Is that correct? Joel will explain both sides during the show.

Questions from Soon-to-Be Retirees

We also got two questions from people that are within months of retirement. First off, congratulations! Now, let’s talk about two financial items you might need to work out before that big day:

• Healthcare: Are you going to be covered by Medicare, and what if you’re not? How can you bridge the gap until you’ve qualified for coverage?
• Paid time off: If you have built up vacation or sick leave, it might not be the best idea to take it all in one paycheck, which we’ll explain.

How Our Team Can Help

Joel Johnson, CFP® and his team of advisors work with clients on these same types of issues and decisions all the time and can help you as well if there are financial planning needs in your family. Contact us and find out how our Money Map can help get you on the path to retirement.

0:23 – Mailbag Question #1: I’m retiring in three years and I have almost a million in my 401(k) but I also have about $60K in consumer debt. Is it worth it to take money out of the 401(k) to pay it off now while I’m working?

2:09 – Mailbag Question #2: I’m retiring later this year and I’ll have about 16 weeks of unused vacation and sick leave that they’ll have to pay me. I’m told I can take this all in my final paycheck or continue being paid on my normal schedule every two weeks after I retire. Does it matter which way I do it?

4:02 – Mailbag Question #3: I’m ready to retire but I won’t be old enough for Medicare for another six months. Should I just stick it out until then?

4:50 – Mailbag Question #4: I’m starting a new job with a lower base side but higher commissions. My base salary is too low to contribute to my 401(k) and pay my bills. Is it ok to just use my commissions for retirement savings?

6:15 – Mailbag Question #5: My company matches my 401(k) savings but they do it in company stock. I’m not excited about owning a lot of company stock but don’t want to miss out on the match. Should I still try to put in as much as I can?

8:25 – Mailbag Question #6: I’ve heard that you need between 15–20x your annual salary in savings to be able to retire comfortably. Is that accurate?

9:59 – Mailbag Question #7: My husband and I argue every day about money because we haven’t done a great job saving for retirement and it’s stressing us out. Is this normal?

12:15 – How we can help with all of these things