laterbloomer
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Post by laterbloomer on Jun 26, 2022 18:45:41 GMT -5
I'm Canadian. Up here there is no such thing as a 25 or 30 year mortgage. About the best we can do is a 5 year mortgage amortized over 25 or 30 years. Every 5 years I have to renegotiate my interest rate. I bought this house in August 2012, renewed in August 2017 and was due to renew in August of this year. Last September I got nervous about interest rates going up so I refinanced early. I went from 2.99% to 1.99% but had to pay the 1% difference for the rest of the year as a penalty. Well interest rates have gone up. If I had to renew today the best I would get is 4.49%. It's going to be higher by August. This move has saved me at least $25,000. I think it will actually be closer to $30,000. This is a move I never would have made if I wasn't on these boards.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Jun 26, 2022 19:05:37 GMT -5
Cool! And Kudos!
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Artemis Windsong
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Post by Artemis Windsong on Jun 26, 2022 19:58:05 GMT -5
I didn't know Canadian mortgages worked that way. How does house insurance work in Canada? The reason I asked is some friends had their garage, safe, electronics in their house cleaned out last Spring. Is there coverage for that?
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laterbloomer
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Post by laterbloomer on Jun 26, 2022 20:13:44 GMT -5
I didn't know Canadian mortgages worked that way. How does house insurance work in Canada? The reason I asked is some friends had their garage, safe, electronics in their house cleaned out last Spring. Is there coverage for that?
I think our insurance policies are the same. If they included that in the policy they bought it would be covered.
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tallguy
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Post by tallguy on Jun 26, 2022 20:37:57 GMT -5
I'm Canadian. Up here there is no such thing as a 25 or 30 year mortgage. About the best we can do is a 5 year mortgage amortized over 25 or 30 years. Every 5 years I have to renegotiate my interest rate. I bought this house in August 2012, renewed in August 2017 and was due to renew in August of this year. Last September I got nervous about interest rates going up so I refinanced early. I went from 2.99% to 1.99% but had to pay the 1% difference for the rest of the year as a penalty. Well interest rates have gone up. If I had to renew today the best I would get is 4.49%. It's going to be higher by August. This move has saved me at least $25,000. I think it will actually be closer to $30,000. This is a move I never would have made if I wasn't on these boards. Not important, but I am (and probably others are) curious. Do you now have the 1.99% for four years or does the 1.99% rate start after the other rate expires and you still have five years remaining? I'm guessing four, but.... Either way, this is a tremendous improvement over where you were fifteen years ago when we met, isn't it?
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laterbloomer
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Post by laterbloomer on Jun 26, 2022 20:40:55 GMT -5
I'm Canadian. Up here there is no such thing as a 25 or 30 year mortgage. About the best we can do is a 5 year mortgage amortized over 25 or 30 years. Every 5 years I have to renegotiate my interest rate. I bought this house in August 2012, renewed in August 2017 and was due to renew in August of this year. Last September I got nervous about interest rates going up so I refinanced early. I went from 2.99% to 1.99% but had to pay the 1% difference for the rest of the year as a penalty. Well interest rates have gone up. If I had to renew today the best I would get is 4.49%. It's going to be higher by August. This move has saved me at least $25,000. I think it will actually be closer to $30,000. This is a move I never would have made if I wasn't on these boards. Not important, but I am (and probably others are) curious. Do you now have the 1.99% for four years or does the 1.99% rate start after the other rate expires and you still have five years remaining? I'm guessing four, but.... Either way, this is a tremendous improvement over where you were fifteen years ago when we met, isn't it? Just 4 more years. The mortgaging system up here is not user friendly. And yes, I am much better off.
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TheOtherMe
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Post by TheOtherMe on Jun 26, 2022 20:49:14 GMT -5
You have just explained one of many reasons DN1 and his wife are leery of buying property in Canada.
Isn't there some kind of tax on purchases by non-citizens?
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Rukh O'Rorke
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Post by Rukh O'Rorke on Jun 26, 2022 21:38:48 GMT -5
Not important, but I am (and probably others are) curious. Do you now have the 1.99% for four years or does the 1.99% rate start after the other rate expires and you still have five years remaining? I'm guessing four, but.... Either way, this is a tremendous improvement over where you were fifteen years ago when we met, isn't it? Just 4 more years. The mortgaging system up here is not user friendly. And yes, I am much better off. It would be sad and worrisome not to be better off after 15 of your prime earning years…
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laterbloomer
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Post by laterbloomer on Jun 26, 2022 22:00:13 GMT -5
Just 4 more years. The mortgaging system up here is not user friendly. And yes, I am much better off. It would be sad and worrisome not to be better off after 15 of your prime earning years… The way I was going that was a real possibility. I had no financial education when I went looking for info on MSN.
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djAdvocate
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Post by djAdvocate on Jun 27, 2022 0:55:36 GMT -5
best move ever was buying a $1.1M commercial building in 2012 as our recession ended. i got an SBA 90/10 loan, did a very clever borrow from my IRA for $165k for improvements, and took out a 20 year loan at a then record low of 3.25%, and the SBA waived all the fees because it was such a bad year for real estate. for the first few years the rent did not cover the loan payment, so it was cash negative, at first. fast forward 10 years, the value of the building has doubled. so that $265k investment has thusfar yielded approximately $1.1M. tenant is on a NNN lease, 20 year term, with 3.53% statutory increases ever year. this year, rent will be $25k more than mortgage prin+interest. so, my ROIC is currently about 300% over (10) years with $25k/year in flow through income. i wish that i had bought ten such buildings.
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Deleted
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Post by Deleted on Jun 27, 2022 7:16:27 GMT -5
It would be sad and worrisome not to be better off after 15 of your prime earning years… And yet we know it happens, when people turn them into prime spending years! I wouldn't want to add yet another item to the list of compulsory education topics, but if I did, compound interest would be at the top of the list. I had to learn it around age 23 for an actuarial exam. Just last week I created an amortization table for our church mortgage refinance (commercial loans here work the same way as residential mortgages in Canada). The Finance Committee Chair had been using an amortization program he'd paid for on his last computer and lost it when the computer died. He wanted to be able to see the impact of additional principle payments on the payoff date. We did have some residential "Balloon" mortgages in the US, where you had to refinance after 3-5 years. They added to the housing crisis when people found they were underwater and I don't think they're used much now. Anyway, congratulations, laterbloomer. I'm glad you got good advice here but you also USED it. That takes smarts and discipline.
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laterbloomer
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Post by laterbloomer on Jun 27, 2022 8:10:15 GMT -5
You have just explained one of many reasons DN1 and his wife are leery of buying property in Canada. Isn't there some kind of tax on purchases by non-citizens? Yes, it is intended to discourage international investors from driving up our housing costs. And apparently there is a problem of Chinese investors buying houses in Vancouver then leaving them empty, while there is a housing shortage. I'm not sure how much these taxes are helping.
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TheOtherMe
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Post by TheOtherMe on Jun 27, 2022 8:21:50 GMT -5
It's too bad that people who have work visas can't afford to buy between the high cost and the tax.
Their apartment is owned by a foreign investor who owns several apartments in the building.
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tallguy
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Post by tallguy on Jun 27, 2022 10:41:43 GMT -5
You have just explained one of many reasons DN1 and his wife are leery of buying property in Canada. Isn't there some kind of tax on purchases by non-citizens? Yes, it is intended to discourage international investors from driving up our housing costs. And apparently there is a problem of Chinese investors buying houses in Vancouver then leaving them empty, while there is a housing shortage. I'm not sure how much these taxes are helping. My GF still laments the fact that she did not buy a place in Vancouver when she wanted to. Her husband didn't want to do it, saying they had too much real estate already. I'm not sure when it was, maybe 20 years ago, but it was only afterward that she started "insisting" on certain things and having him "go along." I do wish she had that place now. Vancouver is beautiful, not to even mention how much the price would have gone up.
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laterbloomer
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Post by laterbloomer on Jun 27, 2022 10:45:17 GMT -5
At the same time I remortgaged I thought "higher interest rates probably mean a drop in the market, maybe I should put my money in more conservative investments" Unfortunately I didn't have the nerve to do it.
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MN-Investor
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Post by MN-Investor on Jun 27, 2022 14:42:52 GMT -5
Smartest financial move - Marrying my sweetie. We both had the same attitude towards money - don't spend it if you don't have it. And we were both committed to saving for the future. The wonderful thing about my husband was that he was committed to investing. And that was vital. I was a timid novice, but my sweetie got me started and we ended up doing extremely well, thanks to his lead. Runner up smart financial move - over-investing in the company I worked for. I still own a chunk of company stock with a $2 basis. It's currently selling for $78. My husband also over-invested in his mega-company and did well.
An accidental smart financial move - we had invested about $37K (including reinvested dividends) in a master limited partnership in the oil & gas industry. At the end of 2013, with my husband's retirement getting nearer, I said let's get out of this. I hated dealing with the tax issues of a MLP. We sold for about $31/share, so about $58K. A year later the stock was below $11/share. Two years later they had declared bankruptcy and the stock was worth only $1.29/share. We missed that disaster!
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Post by Deleted on Jun 27, 2022 14:52:32 GMT -5
In addition to marrying my second husband, who was a far more responsible financial partner who shared my values, I did very well on the two houses I owned in NJ, both of which were a stretch at the time. In NNJ you HAD to stretch if you wanted to be in a decent school district. The Ex and I bought the first house in 1985 with a $100K down payment form his inheritance (he blew the rest) and a $200K mortgage. I got 40% of the equity when we divorced in 1997 and that was $100K. Put that down on a smaller house in the same town, added a $250K mortgage and cleared $200K 6 years later. Put down only $50K on the house second DH and I bought in KS. We bought a few bottles of good wine and saved the rest. Partly luck, partly lower interest rates and a hot real estate market.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Jun 27, 2022 17:20:05 GMT -5
best move ever was buying a $1.1M commercial building in 2012 as our recession ended. i got an SBA 90/10 loan, did a very clever borrow from my IRA for $165k for improvements, and took out a 20 year loan at a then record low of 3.25%, and the SBA waived all the fees because it was such a bad year for real estate. for the first few years the rent did not cover the loan payment, so it was cash negative, at first. fast forward 10 years, the value of the building has doubled. so that $265k investment has thusfar yielded approximately $1.1M. tenant is on a NNN lease, 20 year term, with 3.53% statutory increases ever year. this year, rent will be $25k more than mortgage prin+interest. so, my ROIC is currently about 300% over (10) years with $25k/year in flow through income. i wish that i had bought ten such buildings. that is super!
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justme
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Post by justme on Jun 27, 2022 18:22:19 GMT -5
You have just explained one of many reasons DN1 and his wife are leery of buying property in Canada. Isn't there some kind of tax on purchases by non-citizens? Yes, it is intended to discourage international investors from driving up our housing costs. And apparently there is a problem of Chinese investors buying houses in Vancouver then leaving them empty, while there is a housing shortage. I'm not sure how much these taxes are helping. I feel like there has to be a better way. The taxes are driving people to sell land that has been in the family for generations... often to the very type of investors they want to discourage.
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jerseygirl
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Post by jerseygirl on Jun 27, 2022 19:10:19 GMT -5
After a year of retirement went to work with a small biotech. Got nice amount of stock options on joining at $28 but these were underwater within a year. More options every quarter and prices went down from $28 to $4 . Lots at $4 , stayed at company for 4 years as employee. Company went from 400 down to 50 and I was kept on as a consultant for 3 years but was able to keep the options by negotiating The company was bought out at $58/share Extremely nice payout even after taxes! And not on Medicare so no IRMAA
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Regis
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Post by Regis on Jun 28, 2022 7:07:11 GMT -5
Best move for us was starting early. We started investing all of my wife's paycheck in 1988, and lived off of mine, when the S&P was about 275 and the Dow was around 2,000. We would have averaged a little more than 8.2% per year for 34 years, but we had almost nine years where DW stayed home with kids, so she had little to no income.
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haapai
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Post by haapai on Jun 29, 2022 10:43:49 GMT -5
Probably my smartest financial move was taking an Excel class at the community college when my parents told me that I had to either take classes or get out. It wasn't my idea, so I can't take credit. The second smartest financial move was hanging out one the old MSN iteration of this site and reading the associated essays. I was broke, underemployed, and in debt. There was nothing left over after paying what I owed. I wanted to spend more. I wanted an EF. I finally used Excel to figure out where my money was going and how to squeeze an excess out of it. Then I dithered about what to do with it until I cranked out some amortization spreadsheets and figured out that I needed to pay off the credit card debt more than I needed even a mini EF. (My finances were so close to the bone that it would have taken me a year to scrape together $1000 while paying the minimum on the 12% card. So I went at it naked, only maintaining enough cash to keep the bank from charging low balance fees.)
My third smartest financial move was buying a house at the tail end of the foreclosure crisis. I never would have gotten into the financial shape to do that, or have had the courage to do that, if it had not been for these boards. I'm still under-employed, so the advantages and disadvantages of buying a $50,000 house are significantly different than what most of you encounter but Excel helped me figure it out.
It's pretty amazing how many good money moves can come out of talking about money with folks who live very different lives than myself and then doing my own math and research.
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Tiny
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Post by Tiny on Jun 29, 2022 13:18:37 GMT -5
Most of the "smart" things I did were because you were suppose to do them... save for retirement, buy a house, live beneath your means, don't take on much debt. I wasn't "saving enough for retirement", I should have "traded up" and moved someplace trendier rather than staying in my "starter home", I could have been a bit more wise with the money I saved by living beneath my means (I opted for a 15y mortgage and then paid it off a couple years early - and sacrificed 13 years of NOT saving more for retirement/etc), I never bothered to look beyond CDs or a Money Market for the money I had saved.
Following the stuff you are suppose to do - without a future plan/goal, without really understanding the potential consequences - wasn't a bad move - I didn't fall behind - I just never really moved ahead.
I'd say the smartest financial thing I did - was to actually start questioning what I was doing and trying to figure out if it would get me where I wanted to go (which forced me to figure out where I wanted to go). If you don't know where you are going any road will get you there.
That questioning is what got me to the old Money board(s).
I kind of wince when I think about where I would be today if back at 40/41 years of age I had just kept assuming that since I was doing all the "right things" I was told I was suppose to do - everything would be ok and I shouldn't worry about it. What if I had waited a few more years or a decade (would turning 50 have been the wake up call?)
And just for fun... I'm quite proud of myself that I managed to ACT on the decision to move some of my EF money to I-bonds starting back in 2021. The CDs the EF money was in would come due and I'd move the money to I-Bonds rather than renewing the CD. That money had been earning next to nothing for years in CDs (I always did short term - less than a 24 month CDs - because it was my EF. and I had the fear of "you'll LOSE MONEY!!!! if you close a CD before it ends. Losing money is BAD!!! NEVER do it, ever). I'm working on getting over that...
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haapai
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Post by haapai on Jun 29, 2022 13:24:48 GMT -5
I think that there is something about being around strangers who live very different lives that resets the questions. Somehow it transforms "what you are supposed to do" from nagging to your own very good idea.
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bookkeeper
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Post by bookkeeper on Jun 30, 2022 11:59:52 GMT -5
My best move financially was purchasing a 4 year old home in a Phoenix suburb in 2011. I paid $65,000 for a 3 bed, 2 bath home on a slab at the bottom of the housing bubble. I have spent every winter there since 2014. An identical home close by to mine was listed at $409,000 last March.
It has been like an investment account that I get to go visit!
DH's smartest move was working in an industry with a pension as well as savings programs. He was able to early retire after 30 years at the job.
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tskeeter
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Post by tskeeter on Jul 8, 2022 12:30:26 GMT -5
Feeling pretty smart right now. Took out a 30 year fixed rate mortgage at 3% in 2013. This should yield interest savings of about $45,000 over the next 20 years vs. current rates. If rates increase to the average for 30 year mortgages since Freddie Mac started tracking rates in 1971 (7.77%), the savings would be more.
If you took out a mortgage between July 2020 and October 2021, when rates dipped below 3% several times, good for you!
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steph08
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Post by steph08 on Jul 8, 2022 15:19:56 GMT -5
Feeling pretty smart right now. Took out a 30 year fixed rate mortgage at 3% in 2013. This should yield interest savings of about $45,000 over the next 20 years vs. current rates. If rates increase to the average for 30 year mortgages since Freddie Mac started tracking rates in 1971 (7.77%), the savings would be more. If you took out a mortgage between July 2020 and October 2021, when rates dipped below 3% several times, good for you! I think that's my smartest financial move so far - besides contributing early to retirement and choosing the higher contravention rate for my DH's pension plan. I paid a point, but my mortgage is at 1.75% or 1.5% for 15 years.
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countrygirl2
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Post by countrygirl2 on Jul 8, 2022 18:52:16 GMT -5
I know we could have made a lot more money. But I have one of those husbands stuck in CD's, I am still hearing how it's going to pay off, yeah right.
I did 2 good things, buying Walmart stock, not enough, and putting money into I bonds. I have earned and am. Thankfully we saved enough to live ok, but we could have done so much more. But I also got him into rentals so we have done well there too. But I tried to get him to start selling a year ago, we may be a bit too late, but there is a tremendous demand for housing here so hope not.
But hopefully one day our son will make more money off what we can leave him, he knows how. And he is starting young teaching grandson. I am hearing some echos of his dad already, at age 7. Like I'm not spending my money, I'm saving it. And asking us how we have money if we don't have jobs and don't work, LOL! I'm explaining as much as he can understand. We didn't know either, just parents saying save, and don't get in debt. Son is into investing and has done pretty well and is learning more as he goes along. I hope grandson will take after him and not his mom who really likes to spend money, LOL!
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Deleted
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Post by Deleted on Jul 9, 2022 7:54:17 GMT -5
But hopefully one day our son will make more money off what we can leave him, he knows how. And he is starting young teaching grandson. I am hearing some echos of his dad already, at age 7. Like I'm not spending my money, I'm saving it. And asking us how we have money if we don't have jobs and don't work, LOL! I'm explaining as much as he can understand. I'm starting early with my grandchildren, too. I was tickled when the 5-year old looked at my jewelry collection and said, "Grandma, do you have enough money to pay for all that?" I explained that I had bought it over decades and always with money left over AFTER bills and savings. They also know that I saved so I don't have to work right now. I give them money at birthdays and Christmas (not yet for the 3-year old) and they're free to spend it on whatever. Better to make mistakes and have buyer's remorse on something that cost $7 than years later when you just took out a 72-month car loan. The 8-year old loves graphs and charts so I've been talking to her about the stock market and even showed her my Net Worth graph, which I've been keeping since 1991. It clearly shows some of the market dips and recoveries. (She's too young to read numbers that big but yes, I do plan to tell her that I'm sharing this with her for her education but we don't throw those numbers around outside the family.) On mortgages- I'm very happy with my 3% fixed for 15 years. I'm halfway through it now and the balance is under $60,000. This house, I think, will turn out to be profitable. We paid $252K for it in 2015 and the house next door sold for $423,000 a year ago. It's slightly larger so $400K is probably a good estimate for mine.
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tractor
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Post by tractor on Jul 9, 2022 9:40:35 GMT -5
Mine was contributing to a 401K as soon as I started working. I put 10% of my salary in. It was painful, but after 32 years, and now adding 17%, there is more money in the account than I could have ever saved. While I have changed jobs, and switch portions to a traditional IRA, I also have a current 401K and a defined benefit pension.
If I work another 10 years, I will have four income streams after I retire (including SS). There is great comfort in knowing that I can take care of myself in the years to come.
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