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Michelle Almoslino, a 63-year old Boeing mechanic, is so ready to retire that in her free time she studies overseas rentals online on HomeAway, daydreaming about the travel she can book in her future.
College financial makeover tuition need not delay boeing worker’s retirement goal
Boeing mechanic plans for retirement soon and
to help daughter pay for college.
Michelle Almoslino, a 63-year old Boeing
mechanic, is so ready to retire that in her free
time she studies overseas rentals online on
Home Away, daydreaming about the travel she
can book in her future. She also wants to
volunteer, maybe driving folks who need help
getting to activities or appointments. But before
she packs her passport, she wants to double-check
whether she’s prepared for the journey.
Throughout her more than 25 years at Boeing, she’s
saved in the company 401(k) plan and will collect
both a pension and Social Security payments. She
also has plenty of equity in her two-bedroom house
she bought in the mid-1990s in Seattle’s Columbia
City neighborhood. But along with those assets, she
faces new expenses: Her 19-year old daughter enters
college this fall; Almoslino plans to pay up to $28,000
annually toward her four-year education. Can she
leave behind her salary, help pay for college and live
comfortably for years to come? If so, how soon? “I
really want to retire,” Almoslino says. “I’ve always
invested in my 401(k), but I never got advice about it.
What I probably needed was some financial
To get a professional opinion, Almoslino completed an
online survey to participate in a free financial
assessment from a member of the Puget Sound Chapter
of the Financial Planning Association. She was paired
with Bobby Reamer, a certified financial planner with
Icon Consulting in Bellevue. “All of Michelle’s concerns
and emotions were typical of someone about to retire,”
Reamer says of his work with her. “We took a look at
what would be a sustainable way of living for her in the
future — and how soon she can start living it.”
Almoslino’s goal is to retire within three years, so Reamer
modeled how retiring in 2014, 2015 or 2016 would affect
her future, as well as her options for housing and funding
her daughter’s education.
First, the duo took stock of Almoslino’s assets:
She earns about $77,000. She has $310,500 in
her 401(k); has a house worth $344,000 (with
$152,000 left on the mortgage); $2,500 in
general savings; and $7,000 in debt.
As a Machinists union member, she got the
$10,000 signing bonus this month that was part
of the new contract with Boeing. She decided
to put most of the money, $6,378 after taxes,
toward her daughter’s gap year in Israel.
To learn future pension amounts, Almoslino had to
make some calls. Because she worked at Boeing on
two separate occasions, she has two plans, one of
which she tapped six years ago. A pension
representative had to make custom calculations to
determine that she’d get annual payments totaling
$16,000 as a retiree.
Like many who plan to tap Social Security, Almoslino
wasn’t sure of the optimal age to begin taking
payments. Reamer determined that if she began
taking payments in 2017 at her full retirement age, 66,
she’d receive about $25,000 annually. This doesn’t
mean she has to wait until 66 to retire — just that she
will wait until then to collect Social Security.
Reamer recommended that Almoslino sell her house in
early 2016, then put $130,000 toward the cash
purchase of a smaller property or condo, meaning
she’ll have no mortgage and only small monthly
housing costs in the form of insurance, taxes,
homeowner dues and utilities. While $130,000 is a small
budget for Seattle, she is ready to downsize and would
consider moving outside the area.
To get a handle on a realistic contribution to her
daughter’s college education, Reamer had Almoslino
double-check her daughter’s eligibility for scholarships
at her future school. Fortunately, her daughter qualifies.
By working with scholarships, Almoslino could allocate
about $15,600 per year to her daughter’s education, or
$12,400 less per year, and retire six months earlier than if
she contributed the $28,000 a year.
As for the 401(k), Reamer had reallocation suggestions.
“She’s over-allocated to stocks and fixed income right
now. She has too much risk.” He suggests she take her
money and place it in three “buckets” representing
near-term, medium-term and long-term financial
needs. Near-term, he proposes keeping $125,000 in
readily available, conservative forms such as cash,
bonds or CDs; medium-term, he suggests $50,000 in
diversified fixed-income products with fairly low risk;
long-term, $135,500 in equities and funds to beat
inflation. Reamer also suggests she take advantage of
an opportunity to move funds into a Roth IRA for this
third bucket before she retires. By placing funds in a
Roth IRA, she can save on future tax bills.
By taking these steps, and using some of her
short-term funds over the next few years before
her Social Security checks start during 2017,
Almoslino can retire comfortably as soon as
next summer. “I’m thrilled,” Almoslino says.
“There’s light at the end of the tunnel.”
1412 112th Avenue, Suite 102
Bellevue, WA 98004
Phone: 425-562-4266 (ICON)
Fax: 425-746-4266 (ICON)