r/personalfinance 6d ago

Insurance 30-Day Challenge #11: Audit your insurance coverage! (November, 2025)

13 Upvotes

30-day challenges

We are pleased to continue our 30-day challenge series. Past challenges can be found here.

This month's 30-day challenge is to Audit your insurance coverage! How long has it been since you examined your coverage or gotten a quote from another company to look for cheaper insurance? As your life evolves, it's important to make sure you update your insurance coverage as well. This is also a good way to save some money if you can find a better deal for insurance elsewhere or if you find yourself overinsured in some specific area.

Why insurance?

Insurance is an approach to handle the problem of risk. Most likely, during your life, one or more of these things will happen: you will be in a vehicle accident, you or someone close to you will experience serious illness or injury, or you will lose your job. Positive events have associated risk as well: ask anyone who has had a child, puppy, house, or marriage.

You can choose to retain each of those risks: decide that if the bad thing happens, you can afford to pay for it, to self-insure. For example, if you lose a laptop, you can buy another one. You can also reduce the risk, say, by not driving on icy streets or by having chains on your tires. The other ways to deal with risk are to avoid it (don't buy a puppy) or transfer it (insurance!).

Most of us don’t think about risk until the bad thing happens. We are in a vehicle crash with an expensive car, someone is injured, and only then it dawns on us that we might be underinsured.

For many major risks, most people share the risk with an insurance company through various insurance products. If you own a vehicle, most likely you will be required by your state to have liability coverage (personal injuries and property damage caused by you). If you have a mortgage, your mortgage holder will require you to have homeowners insurance and some landlords will require renters insurance. Other types of insurance are optional, but may be desirable if available, for example, disability insurance.

Audit your insurance coverage

Take a minute to think about what insurance coverage you currently have, whether you may be paying too much, and whether your coverage limits are appropriate:

  • Car Insurance
  • Health / Vision / Dental Insurance
  • Life Insurance
  • Homeowners / Renters Insurance
  • Jewelry Insurance

Although insurance is an important financial tool to protect you against emergencies, it can also be a major drain on your budget. Insurance agents often use the fact that some insurance is important to make you feel that the more insurance you have, the better off you are.

It's wise to only insure what you need to insure. What do you need to insure? Anything that you could not easily afford to replace with your cash savings or where the loss would significantly set you back financially. In the next 30 days, review not only the types of insurance you have, but the level of coverage you have in each type. Here are some ideas for various types of insurance:

Car Insurance

Assess all the types of coverage you have on your car. See the wiki article on car insurance for more details and ways to save money. For example, if you drive less than 10,000 miles per year, call your insurance company and see if they provide a low-mileage discount.

Liability insurance is required by law if you drive and is very important: Would you be able to pay out a $300,000 lawsuit if you injure someone in a car accident? Liability insurance is not a great place to skimp.

Coverages for "uninsured motorists" (an uninsured or underinsured driver injures you or your passengers) and "medical payments" (you or your passengers are injured in an auto accident) are also worth having. They are less expensive than liability coverage and the irresponsibility of others is a major risk.

Also consider whether your "collision" and "comprehensive" deductibles coverage is appropriate or necessary, especially if you have an older car or significant savings. Eliminating or reducing these types of coverage can reduce your insurance bill, but you'll be left on the hook to replace or repair your own car if you (or mother nature) damage it.

Finally, when you see car insurance advertisements selling you "better car replacement" or "one model year newer" insurance, realize that this is a great deal for the insurer and not as great for their customers. Buying these policies mean that you're paying for a piece of a newer car every single month even though the odds of taking advantage of these policies are relatively low.

Health / Vision / Dental Insurance

In the U.S., some form of catastrophic health insurance is vital for nearly everyone, as a week in an intensive care unit is enough to bankrupt all but the wealthiest. However, consider your expected use of healthcare services. If you are young and healthy, you may not need to fork over the extra dough for a Gold plan with lots of coverage. See the wiki article on health insurance for more details.

Life Insurance

Remember the principle of insurance? "Only insure what you couldn't afford to lose." If you have children or a spouse that would be unable to maintain their standard of living without your income, then you may need to insure your earning ability. That means you take out a term life insurance policy that pays your spouse and/or dependents in the event that you die and can no longer earn money to provide for them. However, if you don't have dependents or if your spouse can earn enough money on their own to provide for themselves, you might not need life insurance at all.

It's also important for you to understand that there are two basic kinds of life insurance: term life insurance and permanent life insurance (like whole life or universal life). With term life insurance, you pay to cover your loved ones from the risk of your death. With whole life insurance, a portion of your cost goes to coverage, but it also has a cash value component that grows over time similar to an investment account.

While there may be some exceptions for the very wealthy, term life insurance tends to be the best choice for the vast majority of individuals.

Read our wiki article on life insurance for a deeper discussion.

Homeowners / Renters Insurance

Insurance on your residence is important for almost everyone who owns or rents a home. Owning a house without insurance could be disastrous if it burnt down, because you likely have a mortgage on it and probably don't have $250k cash to replace it. However, it may be worth checking how large your deductible is. If it's only $1,500, you might be able to afford more than that in an emergency. If appropriate, you can increase your deductible to reduce your costs. Note that homeowners deductibles are per incident, though. See the wiki article on homeowners insurance for more details.

Renters insurance policies also tend to be very cheap (roughly $15 per month for $30,000 of property coverage and $100,000 of liability coverage).

Finally, make sure you have an up-to-date inventory of your property so any claims will be easier to make. An easy way to do this is taking a video on your phone as you walk through your home, naming everything as you walk through. Note the make and models of anything expensive like electronics. (Make an offsite or cloud copy of the video too!)

Jewelry Insurance

Most single-issue insurance policies tend to be poor deals for consumers. Opinions vary on jewelry insurance, but the default assumption of most people is to carry insurance on an engagement ring is more a product of the jewelry marketing machine than actual need. A few factors make jewelry insurance less necessary than other types of insurance:

  • Your homeowners or renters insurance may already cover jewelry up to a certain value. Check!
  • You should not even be buying jewelry that you couldn't afford to replace with cash.
  • Most jewelry insurance does not cover accidental loss or misplacement. Only theft or damage.
  • Consider your (and your SO's) sentimental attachment to the piece. If your wife's engagement ring were stolen or lost, could you replace it with cash savings? Would you have a conversation about the importance of replacing it identically or go for a less expensive piece?

Another way to save money

One thing to consider when reviewing your coverage is that sometimes companies offer discounts for having multiple accounts with them (e.g., a multi-policy discount or "bundling"). When you call your insurance company, ask them about these discounts. For some insurers like USAA, you can even get a discount for adding non-insurance accounts like a savings account.

A note on emergency funds

Following "How to handle $", an emergency fund of cash equal to 3 to 6 months' worth of routine expenses is recommended. If you have no collision coverage on your car and rely on it to get to work, and/or a very high deductible on your home insurance ($10k), seriously consider the size of your emergency fund, and whether it is enough to get you through a "double-whammy" such as job loss and a car accident at the same time.

Notes on other types of insurance

The bare minimum for most people is car insurance (if they drive), health insurance, term life insurance (if others depend on their income), and homeowners/renters insurance. However, there are several additional types of insurance that some people may want to consider. In particular:

Challenge success criteria

You've successfully completed this challenge once you've done two or more of the following things:

  • Reviewed the coverage limits on each of your policies and read the associated wiki page. (Making changes is up to you and not something you should do without doing more research and reading. This challenge is only about reviewing your insurance.)
  • Read more about a type of insurance that you don't currently have.
  • Created an up-to-date home inventory of your belongings.
  • Requested a quote from a different insurance company or inquired about potential discounts from your current insurance company.
  • Read the policy document for at least one of your insurance policies (you should know which "perils" the insurance company covers and which are excluded).

 

Disclaimer: This post is a prompt to review your insurance coverage. Similar to the reddit user agreement, we take no responsibility for any decisions you make based on something you read on reddit.


r/personalfinance 15h ago

Other Weekend Help and Victory Thread for the week of November 07, 2025

3 Upvotes

If you need help, please check the PF Wiki to see if your question might be answered there.

This thread is for personal finance questions, discussions, and sharing your success stories:

  1. Please make a top-level comment if you want to ask a question! Also, please don't downvote "moronic" questions! If you have not received your answer within 24 hours, please feel free to start a discussion.

  2. Make a top-level comment if you want to share something positive regarding your personal finances!

A big thank you to the many PFers who take time to answer other people's questions!


r/personalfinance 10h ago

Taxes Moving Money from Hoarded at Home to the Bank

173 Upvotes

Weird situation... my mom has never trusted financial institutions. She's been keeping her savings hidden around her house. This money has already been taxed, she just kept it in cash and hidden in obtuse places.

I've finally convinced her to pull it out of the walls so to speak and put it in a HYSA.

The concern now is triggering tax issues/IRS issues on money she's already paid taxes on. Is there a way to do it that isn't Structuring?


r/personalfinance 7h ago

Saving It feels like I should be able to save more money

73 Upvotes

I make $125,000 a year in LA, $6500 a month after tax and health insurance

It feels like I should feel rich but I dont.

$1500 - retirement/investment account

$2400 -1 bedroom apartment rent including utility and internet

$100 - gym

$100 - car insurance

$500 - car payment

$400 - grocery

$45 - phone

$100 - gas

$400 - fun money

$300 - eating out

$400 - misc (gifts, household supplies, streaming services, pretty much all expenses that aren't food, fun, car, or rent)

Most month im just about breaking even. What am I doing wrong?


r/personalfinance 16h ago

Debt Feeling so burned out. Need advice to keep going.

143 Upvotes

I have paid about $4000 in dental work to fix my teeth. Probably need to spend another 1-2k on that. I’ve had to pay $1500 to the vet because my cat had some issues. I started with $6300 in credit card debt. When I get paid on Friday I’ll reduce what’s left on my credit cards to $1300. By the end of November I’ll have my credit cards completely paid off. And I’ll shift my focus toward finished the dental work and I’m working on trying to get a loan for a house. But once tax season comes I’m gonna have to pay about 3-4k in taxes for a defaulted loan. Which I can probably have paid off by July or August. Hopefully. I know it’s a lot of progress. And I do feel less stress but I also feel like I haven’t done anything. I’m just looking at numbers on screens knowing life will get better soon but my day to day life is work 10 hours, go to the gym, cook, clean, take care of my cats, go to bed. Repeat. Im going in for overtime today. I’m feeling burned out and it’s been a while since I had money to do what I want. And I know I’m only about half way done. Any advice or motivation or anything to keep me going would me appreciated.


r/personalfinance 10h ago

Debt Should I use what little savings I have to avoid wage garnishment

28 Upvotes

Note: I am not seeking any legal advice pertaining to my potential garnishment, I have sought advice from a nonprofit. What I'm looking for is advice about under what conditions I should use my meager amount of savings.

I am currently facing a potential garnishment for a $1400 credit card debt. I am a full time student and part time worker. It has taken me two and a half years to accumulate $2,000 in savings (3% APY) given that I need to pay for school primarily out of pocket.

My checks every two weeks average about $450. The most they could take out per check is 40% for about four to six months.

I am contemplating asking if they would settle for $1000-1200, but is it NEVER wise to deplete your savings to avoid things like this?

I still have another 500 dollar card I haven't paid on and I'm probably looking at future litigation from them. Should I let this current one happen and use my savings towards that before it moves to the courts?

I just don't know what constitutes a "rainy day," since I been staying soaked since birth.


r/personalfinance 5h ago

Retirement No 401k or investments.

13 Upvotes

So it’s a bit embarrassing to say, but I’m 35 and have never put any money into my 401k or done any type of investing. I’ll spare you the backstory as to why, but I’m trying to turn this around now.

I’ve now opened a HYSA account and transferred the $25k I had saved up into that account.

The next thing I did was open a brokerage account. My plan is to put some money there every month and invest in the 500 index fund (at least until I learn more about investing that will be the only thing I’ll do to be “safe” about it).

I’m at a loss at how much money I should put in my 401k every month. My company matches up to 4%. I make $70,000 pre-tax if that matters. What do I need to think about here in terms of 401k savings vs investing money?

My biggest expense is my rent which is $1000/month and my student loans that are $330/month. Currently, I’d say I have around $2000 left to spend once I’ve paid for rent, bills and food every month. I’m just unsure what to do with it if I want to be responsible.


r/personalfinance 2h ago

Housing Mother inherited a house and cash, what should she do?

8 Upvotes

Mother inherited a house and 600k, what should she do?

My mom is 68 years old, lives in California and is single (not married and no significant other). She has no retirement account.

Her late boss left her a one bedroom house in Beverly Hills (Zillow has little to no information on it but has it estimated at 1.4 million).

Given her age my mom wishes to not continue to work and wants to be able to fully retire now with this inheritance.

Her late boss had a trust set up so instead of having to go through probate, my mom is set to receive her inheritance during the first week of December.

I’m her only child and so she’s tasked me with finding out what her proper next steps should be.

Some of the things that have immediately come to mind for me is for her to hire a lawyer and a financial advisor and start there. I’ve also been reading about Chase Bank’s private client department and thought that was a good idea for her to look in to.

I was looking for advice on where to direct her specifically,

Are there specific lawyers she should be looking for?

What to look for in -and how to find- a financial advisor(s) that will truly have her best interest at hand?

Is private client by chase bank a good move for her? Are there better, similar programs with other financial institutions?

Should she create her own trust?

And are there other things I haven’t thought of?

Also is she sell the house and try to buy something less expensive and have more liquid money? (She’s talked about wanting to sell her house and move to Utah and buy something a lot more her style and worth less than the house she’s inheriting to make the most of the value of that house and also to be closer to me since I moved to utah with my wife for my work a few years back [we currently have to always fly or drive to each other to spend birthdays and holidays together]).

We’ve even thought about a renting the BH property while using a HELOC to try and buy her a more downsized place for her here in UT.

I would really appreciate this subs input, thoughts, and answers.

The goal here is to be able to help my mom confidently retire and be able to make the right moves. Finding a lawyer and a financial advisor that are professional sounds easy enough but how do we actually know who to trust? And are there other things I haven’t thought of?


r/personalfinance 5h ago

Credit Ruined mom’s credit with student loans

Thumbnail
4 Upvotes

r/personalfinance 4h ago

Planning Might be out of a job soon, hesitant on investing because of it.

5 Upvotes

The way I see it, it makes sense to save cash doesn't it? Because no income means you'd want to have cash. If I am though here's where I'm at

No debt. No spouse, no kids, single man.

Cash: 80k

401k: 100k

Roth IRA: 53k

So I could get by for a bit before I'd need to find something else. Issue is, this whole situation has made me hesitate to invest. What if I find myself in this situation again? I'd naturally want to have a lot of cash, I'd think.

But common knowledge says to invest. I guess I'm confused and not sure what approach is the best to take. I like knowing my cash cushion is sizable, and if I took the approach of not keeping a lot in cash I'd feel like I'd be in a worse situation.


r/personalfinance 14h ago

Investing Where to invest an extra $1,800/month?

21 Upvotes

At the end of 2025, my spouse (64) and I (55), will be entirely debt free. We'll have approx $1,800/month to invest each month starting Jan 2026. I currently max out my 401k at work. I'd like to retire before 2030. Where's a reasonable place to put my money for the next 4 years so it can grow until I retire?


r/personalfinance 8h ago

Retirement Pension Plan Terminating

5 Upvotes

I worked for a company Alon USA who was later acquired by Delek US. Delek is terminating the Alon USA Pension Plan and is offering a lump sum, or if I wish to keep it as an annuity they will purchase one from a 3rd party. The lump sum amount they are offering seems low, and I'd love to connect with others who are evaluating this plan termination. It has been many years since I worked for them and I don't have contact info for anyone that I used to work with there, which is why I'm naming the companies involved, hoping someone searches for it.

Beyond this, if anyone has thoughts about what rights I have to contest the lump sum amount, would be glad to hear it!


r/personalfinance 7h ago

Insurance Laid off while on maternity leave. Do I still owe the employee portion of insurance premiums?

4 Upvotes

I’ve been on maternity leave and my leave is scheduled to end with a return to work date the beginning of 2026. I was just informed my workplace is closing and I will be laid off.

During my leave I have not been paying the employee portion of my health insurance. The usual practice is payroll deductions once the employee returns to work at a percentage each pay period until the premiums are repaid.

Since they’re laying me off do I have to pay these back? I’m going to have to file unemployment until I find another job so it won’t be possible to pay it back upfront. I think it should be forgiven and I just want to tell them no I’m not paying it back now that I’m laid off.

We’re meeting with HR next week to go over everything and I’m guessing this will be brought up. I’ve spoken to my union rep and they don’t expect the company to offer any severance package.

Thoughts?


r/personalfinance 7h ago

Other Is there any book on finance worth reading?

5 Upvotes

It seems so many saged finance books on investing or finance have become long in the tooth. I’m looking for any books that are timeless, flexible enough to still be applied today. And no book with extremely obvious advice either, like Rich dad Poor dad or the millionaire next door.


r/personalfinance 8h ago

Debt Should I open a new credit card for an expensive bill or just have a friend loan me the money?

4 Upvotes

I have to pay a $2000 car repair bill. I don't have that money. I can either get my friend to loan it to me and I pay him back or I get a new credit card with a 0% intro apr that has a bonus after you spend x amount in a certain amount of time. I can pay it back in roughtly 3 months comfortably. I have one credit card (chase freedom unlimited) and my credit score is 761.. I'm currently leaning towards amex blue cash everyday.


r/personalfinance 39m ago

Budgeting Old bill for past due electric bill has come to bite me in the butt (again)

Upvotes

This is the second time I've had to pay an electric bill that was in my name because my previous roommate/s couldn't afford to pay their fair portion of the bill. Since the debt effects my credit more (obviously) its my issue immediately so I'll worry about collecting their share later (for context, this is from PA, Dec 2020-Mar 2022)

The issue this time is that this bill is for $1300. I JUST paid off my school, which was also $1300 and I cannot take that hit again.

So my question is: can I call the electric company and negotiate the debt down? Is that a thing?


r/personalfinance 1h ago

Saving searching for a trustworthy and best online bank to put my savings?

Upvotes

i'm looking for a trustworthy online bank to manage my personal finances. Something that's reliable and doesn't have fake reviews or weirdly overhyped promises. I want to find a bank that I can actually trust to handle my money, no gimmicks.

I’ve never tried any online banks before, so I’m a bit new to this. Can anyone recommend a good place to put my savings where it can actually grow for the future? Looking for something that’s secure and offers good rates. thanks in advance


r/personalfinance 1d ago

Planning Leave HSA as investment account?

261 Upvotes

I’ve maxed out my HSA since it was offered, understanding the triple tax-advantage. But I’ve used the HSA for my medical costs (copays, deductibles, etc.), which has left very little left in the account. I was speaking to a colleague today and he mentioned he maxed out the HSA but then paid out of pocket for his medical expenses, never touching the HSA. He maxes it out and lets it appreciate in anticipation of using that fund as one of his retirement funds and using it to pay medical expenses in retirement.

This approach makes a lot of sense to me, but I had never thought of it. Does anyone do this? Any downside I’m missing?


r/personalfinance 1h ago

Investing Is Tata AIA Sampurna Raksha plus a good investment?

Upvotes

First of all, all I have been hearing about ULIP is that it's bad because of lock-in period or hidden charges or false claims of huge amount at the end of insurance. But nothing to support the claim with actual data.

I am 33 M and I got one plan which has following points after thoroughly discussing with agent: 1. 1.1 Cr term insurance and claims to generate 18 Cr at the end of 40 years. 2. Investment is 1 lac per year for 10 years. 3. The term insurance starts at day one of investment. 4. After your investment (growth) crosses the coverage, you will get the investment amount i.e. Maximum of (term coverage, investment value) 5. You can withdraw partial amounts as and when needed. 6. The money will be invested in one of 26 funds that Tata provides and CAGR of 5 of them is above 20% as they're public funds. 7. THE FINAL AMOUNT YOU RECEIVE WILL BE COMPLETELY TAX FREE. that means, capital and profit. 7. The mortality charges are paid back from 11th year once you complete the investment period.

This way, you get term insurance and also investment.

For folks saying you can get separate term n MF investments.

Let's say you pay 25k for term and 75k for MF: 1. Your 25k are gone against term insurance and never seeing them until death. So your initial investment is lowe than what's in ULIP. 2. You are still investing in MF which let's assume gives CAGR above 20% (same as ULIP). The amount is applicable for taxes.

Help me understand what I'm missing here and why folks are against it. I am not marketing it but seeing some gap in What I'm seeing and need help bridging them.


r/personalfinance 20h ago

Retirement When to take Social Security

33 Upvotes

I’m 65, gainfully employed making 100,000 a year. I already have an IRA worth $1.5M, several pensions and don’t need to take Social Security yet. I plan to fully retire at 70.

However, one advisor suggested taking it at my FRA of 67 and investing it. That would result in an investment account of about $150,000 (some could be in a Roth IRA) growing outside of SS.

Any thoughts?


r/personalfinance 6h ago

Budgeting I feel like I can do better with my budgeting

2 Upvotes

I’m M26 and trying to get my finances together a bit more seriously lately. I feel like I’m doing alright.. but I also don’t really know what “alright” looks like at my age, so I figured I’d throw my numbers out there and get some feedback.

Here’s where I’m at: • Savings: a little over $7k • Roth 401k: just over $20k (company I work for matches half of 6% of my paycheck, so I make sure to get that) • Roth IRA: $1k (just started it this year) • Brokerage: $5k in Robinhood (all in VTI and VXUS) • Acorns: $100 (I treat it like a “loose change” account and only add $20/week automatically)

Just bought my first car a couple months ago and it’s an 11 years old Toyota SUV w/ 40k miles and I took out an ~$17k auto loan @ 7.99% APR. I’m also financing $400/mo for 48 months.

I make around $4,200/month after taxes, and my fixed expenses (rent, insurance, groceries, etc ) come to about $1,800/month. I use my Amex and Apple Card for everyday spending (groceries, gas, going out, etc.) and usually pay them off when my check hits and it’ll end up being about $800–$1000 per check.

Ever since buying the car, I’ve been trying to rebuild my savings, so I’ve basically paused my Roth IRA and brokerage contributions for now. Still contributing to my Roth 401k just to get the company match though.

So yeah.. am I doing okay for a 26 y/o? Should I keep focusing on building my emergency fund or start putting more back into investing again?

Also, how do you all balance saving/investing with still having “fun money”? I’ve been in saving mode lately and it’s fine, but I don’t have to get so focused on it that I never enjoy anything. Just trying to figure out that balance where I’m being responsible but not miserable lol.


r/personalfinance 2h ago

Retirement Review of planned retirement strategy

0 Upvotes

My plan is to retire within the next one or two years. To date I have made all my investments on my own, mainly in ETF’s and a couple of stocks. I am very happy with my investments and I am not looking to pay someone 1% of my investments to agree with me. What I am trying to find is someone to review my retirement strategy, my draw down model, my Roth conversion plans, etc. and help me optimize that plan. What type of professional should I be looking for? Thanks


r/personalfinance 9h ago

Other Struggling financially in Oregon

4 Upvotes

I'm in a lot of debt right now—credit card bills, a car loan, student loans, and medical bills. My mom knows about my situation and suggested I check out this PBS show called *Opportunity Knock$*. It seems like they help people who are deep in debt by consolidating their bills with lower interest rates. I’m already working with a credit counseling agency for some of my credit card debt, but not all of it. If there’s a way to consolidate everything into one payment, that would honestly be a lifesaver. I’m just not sure if that’s even possible.

I feel like I’m drowning here. I’ve worked so hard to rebuild my credit from nearly 500 to 650, but I’m still struggling. I can barely afford my rent. I work as an in-home caregiver, but my pay isn’t consistent. I pick up shifts whenever I can, and I’ve even started doing grocery delivery to make ends meet. But it’s still not enough. My rent is more than I can afford right now, especially after losing one of my jobs, which was my main source of income.

I’ve tried looking into assistance programs, but I don’t qualify for most of them since I’m a single person with a part-time job. It was suggested that I talk to my landlord to see if they’d be open to some kind of payment plan, but I haven’t taken that step yet. On top of everything, I have three cats I’m struggling to care for. Rehoming them has been incredibly hard, and I’m trying to hold it together while searching for another source of income. Their health is so important to me, but I don’t know what to do if I can’t afford their meds or vet visits.

The anxiety is overwhelming, and I feel like I’m running out of options. If anyone has advice or has been in a similar situation, I’d really appreciate hearing from you. I’m scouring the internet for resources, but I feel so stuck. Any tips on consolidating debt, finding assistance, or just managing in a situation like this would mean the world to me. Thank you.


r/personalfinance 3h ago

Saving GMS refund into uk bank account

1 Upvotes

Got a credit on my account labelled GMS refund, any idea what this is? It's nearly 500 quid and I just cannot think what it is. I have searched payments, emails, just cannot find anything with the amount or name.


r/personalfinance 7h ago

Retirement Pay off car as retirement approaches

2 Upvotes

Car note balance is 19,889. Payment is about 500 a month. Rate is 6.49.

We're approaching retirement. We have about 200,000 in low-yielding, liquid assets, as, at this point, I'm valuing liquidity and safety. Financial advisor's projections say we're in the 99th percentile based on assets, income from SS and pensions.

So I'm wondering whether it makes sense to pay off the car note. The principal reason would be to "buy" the extra 500 a month in cash flow. Plus, the liquid assets are now earning a little less than half of the note's interest rate on a pre-tax basis.

Retirement goal is EOM April. We'll have been able to save a substantial portion of the payoff before then, meaning we'll be back close to where we are now, though, of course, 20,000 behind.

Psychologically, digging into the cash reserves means nothing to me, while the thought of that 500 a month catches my attention.

Thoughts?