Math teacher gets a plan to keep his debt from derailing his retirement

EDITOR’S NOTE: Jeff Kizer is among a handful of participants selected to work one-on-one with a financial expert for CNN’s Savings Challenge. This story was originally featured in the Savings Challenge newsletter, which you can sign up for here .

In CNN’s first update on math teacher and tennis coach Jeff Kizer, we described him as “chill” when it came to money and noted he didn’t see it as a source for happiness.

But being chill didn’t mean Jeff hasn’t been worried about his financial prospects.

A financial plan by certified financial planner Craig Toberman showed Jeff, 57, that he could retire comfortably at his desired age of 75 despite having less than $200,000 in his nest egg today, a heavy debt load and a 14-year-old daughter likely to go to college in a few years.

Jeff expressed surprise and relief that things could work out for him financially so long as he stayed disciplined and methodical about paying down his debts and working consistently over the next 18 years.

“I was ecstatic about where I am going to end up,” he said.

Maansi Srivastava/CNN

Craig’s biggest recommendation is for Jeff to actually save less for retirement and instead redirect money to pay off two of his three loans in the next few years.

At this writing, Jeff had nearly $165,000 saved for retirement, including a $10,000 IRA. And he had been socking away 17% of his $73,000 teacher’s salary and 10% of his $40,000 tennis salary plus employer matches.

Craig recommends Jeff lower his 17% contribution rate to 10% at his school. That’s still enough to get his employer’s full matching contribution. And combined with the money he is contributing to the 401(k) at his tennis job, he will still be saving more than 14% of his combined $113,000 pre-tax income for retirement.

Craig calculates that a 7% drop in Jeff’s contributions at school will free up $4,200 a year after tax – or $350 per month.

Craig wants Jeff to add that $350 to his current monthly payments on his $33,000 personal loan that has a 10.23% interest rate. That way, he’ll be paying a total of $1,216 each month. And in doing so, the loan will be paid off in two years instead of three, Craig said.

When it is, he then suggests Jeff redirect the $1,216 to pay down his roughly $50,000 student loan that has a 5.36% interest rate. That will boost his total monthly payment on that loan to $1,401.

If he does that, the student loan should be paid off by the time Jeff’s daughter is ready to go to college in 2031, Craig said. At that point, he can repurpose the $1,401 a month to help pay her college costs.

CNN Photo Illustration/Photograph by Jessica Lauren

And by the time she’s a sophomore in 2032, Craig noted, Jeff will have yet more money to put toward college: His $75,000 truck loan, on which he’s paying $1,092 a month, will be paid off. That will then give him $2,493 a month ($1,401 + $1,092) to further help with his daughter’s tuition.

( Side note: Craig said Jeff promised he will drive that truck for many years and noted if anything goes awry with Jeff’s finances, he should sell it in addition to cutting back on other spending.)

Another key suggestion for Jeff is to wait until 70 to claim Social Security, at which point his expected benefit will be $48,624 a year. “He should bank that money while he continues to work until 75,” Craig suggested.

If he does that and continues contributing to his 401(k)s until age 75, Jeff could have over $1 million in his mid-70s, “which should be sufficient with Social Security to have a most likely stress-free retirement,” Craig said.

That assumes an average annual return of 6.34% in his portfolio until his retirement year and then 5.48% thereafter.

For all that to happen, though, Jeff needs to keep working, live within his means and not tap his nest egg before he retires.

Craig’s advice: “Stay healthy, stay happy and take care of yourself. Like your job. Don’t blow it. Don’t tell off your bosses.”

If Jeff does all these things, Craig said, “He has a sufficient probability of never having to worry about money.”

What’s next: We’ll follow up again with Jeff in a few weeks. But next week we’ll catch up with Abbey Graf, who will learn whether she has a solid chance at early retirement.

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编者按：杰夫·凯泽是少数几位被选中参加CNN“储蓄挑战”活动，并与金融专家进行一对一辅导的参与者之一。本文最初刊登于“储蓄挑战”新闻简报，您可以在这里注册订阅。

在 CNN 对数学老师兼网球教练杰夫·凯泽的首次报道中，我们形容他对待金钱的态度“很淡定”，并指出他并不认为金钱是幸福的来源。

但保持冷静并不意味着杰夫不担心自己的经济前景。

注册理财规划师克雷格·托伯曼为 57 岁的杰夫制定的财务计划显示，尽管他目前的积蓄不到 20 万美元，背负着沉重的债务，而且他 14 岁的女儿几年后很可能要上大学，但他仍然可以在他理想的 75 岁退休。

杰夫感到既惊讶又欣慰，只要他能在接下来的 18 年里保持自律和有条不紊地偿还债务并持续工作，他的财务状况就能好转。

“我对即将去的地方感到无比兴奋，”他说。

曼西·斯里瓦斯塔瓦/CNN

克雷格最大的建议是，杰夫应该减少退休储蓄，而是将部分资金用于在未来几年内偿还他的三笔贷款中的两笔。

截至撰稿时，杰夫已为退休攒下了近16.5万美元，其中包括1万美元的个人退休账户（IRA）。此外，他还将自己7.3万美元教师年薪的17%和4万美元网球运动员年薪的10%（加上雇主匹配缴款）存了起来。

克雷格建议杰夫将他在学校的401(k)养老金缴款比例从17%降低到10%。这样仍然足以获得雇主的全额匹配缴款。再加上他在网球工作中缴纳的401(k)养老金，他仍然可以将税前收入11.3万美元中的14%以上用于退休储蓄。

克雷格计算得出，杰夫在学校的缴费减少 7%，税后每年可节省 4200 美元，即每月 350 美元。

克雷格希望杰夫将这350美元加到他目前每月33000美元个人贷款的还款额中，这笔贷款的利率为10.23%。这样一来，他每月总共要还1216美元。克雷格说，这样做的话，贷款可以在两年内还清，而不是三年。

届时，他建议杰夫将这1216美元用于偿还他那笔约5万美元、年利率5.36%的学生贷款。这样一来，他每月还款额将增加到1401美元。

克雷格说，如果他这样做，到杰夫的女儿2031年上大学时，助学贷款应该就能还清。届时，他就可以把每月省下的1401美元用来支付女儿的大学费用。

CNN图片插图/摄影：杰西卡·劳伦

克雷格指出，到2032年女儿上大学二年级时，杰夫将有更多的钱用于大学教育：他那笔7.5万美元的卡车贷款（每月还款1092美元）将全部还清。届时，他每月将有2493美元（1401美元+1092美元）用于进一步支付女儿的学费。

（附注：克雷格说杰夫承诺会开那辆卡车很多年，并指出如果杰夫的财务状况出现任何问题，除了削减其他开支外，他还应该卖掉这辆卡车。）

给杰夫的另一个重要建议是等到70岁再领取社会保障金，届时他预计每年可领取48,624美元。“他应该把这笔钱存起来，同时继续工作到75岁，”克雷格建议道。

克雷格说：“如果他这样做，并继续向他的 401(k) 账户缴款直到 75 岁，杰夫到 70 多岁时就能拥有超过 100 万美元的存款。这笔钱加上社会保障金，应该足以让他过上很可能无忧无虑的退休生活。”

假设他的投资组合在退休前平均年回报率为 6.34%，退休后为 5.48%。

但要实现这一切，杰夫需要继续工作，量入为出，并且在退休前不要动用他的养老金。

克雷格的建议是：“保持健康，保持快乐，照顾好自己。喜欢你的工作，别搞砸了，别顶撞你的老板。”

克雷格说，如果杰夫做到这些，“他很有可能永远不必为钱发愁”。

接下来：几周后我们会再次联系杰夫。但下周我们会采访艾比·格拉芙，了解她是否有可能提前退役。

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