With two children grown and out of the house, and a granddaughter in the picture, the Tinsleys want to retire in fifteen years. So WSFA 12 News introduced them to a man who could make that happen -- Certified Financial Manager Danny Cassidy.
"A majority of their net worth was in retirement accounts," Cassidy said of the Tinsleys.
The Tinsleys learned that by contributing to their retirement plans at work, they were well on their way. But they had forgotten about the basics.
Cassidy says there are several deliberate steps to getting your finances in order.
- Make sure you have enough money for daily expenses like rent, utilities, and food.
- Reduce your debt. (In the Tinsley's case, that meant paying off credit card bills and refinancing the mortgage on their home.)
"We suggested that they decrease the mortgage payment by refinancing it at a lower interest rate and take the money that they were paying and put it in a savings account," Cassidy said.
That savings account is the third step. Cassidy recommended a money market account with at least six months worth of income for use in emergencies. And only then, is it time to talk retirement.
For the Tinsleys, We're talking 401-Ks. For years, Johnny and Shirley have contributed the maximum amount to their plans. But they never knew how to invest it.
"It's hard to know, if you don't fool with the stock market too much, how to know which way to go and which ones to pick," Johnny Tinsley said.
Cassidy pointed out that the closer you get to retirement, the more conservative your investments should be. That's why he recommended that the Tinsleys reduce their holdings in the stock market.
"If the market goes down 50%, in order to make it back, it has to go up 100%," Cassidy said.
Now, with less debt, more savings, and smart investments, the Tinsleys are optimistic about their golden years.
I'm excited," Johnny said. "It's like starting anew because the questions are answered now and just up to Shirley and I to do the right thing."