Smart Money: Credit Building and Saving for a Secure Retirement

Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode: Understand the implications of adding authorized users to credit cards, and how to plan retirement so your money lasts.

In today’s first Money Question: A listener asks whether it’s a good idea to help a friend or family member build credit by adding them as an authorized user on your credit card. Credit expert Bev O’Shea joins Sean Pyles and Liz Weston to discuss the risks and benefits of adding authorized users, including the impact it can have on a person’s credit profile, the conditions under which it might be unfavorable and how many people a credit card holder can add as authorized users.

In today’s second Money Question: Sean and Liz turn their attention to the complex world of retirement planning. They discuss methods for evaluating whether you’ve saved enough for retirement, common pitfalls to avoid and why it’s key to consult with a fee-only financial planner. The discussion digs deep into the critical decisions around Medicare and Social Security and how to manage them effectively, how to ensure your retirement funds last and the impact of inflation on retirement plans.

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Liz Weston: Sean, would you ever add someone in your family to your credit card?

Sean Pyles: Depends on the family member, but probably? I might not actually give them access to the card, but I’d be happy to make them an authorized user to help them build credit.

Liz Weston: Yeah, this is something known as “piggybacking.” But instead of hoisting somebody on your back, you’re helping them to hoist their own credit.

Sean Pyles: Much less risk of hurting yourself in the process, hopefully.

Liz Weston: True.

Sean Pyles: Well, listeners, today we’ll discuss making family members authorized users on your credit cards and answer another listener’s question about how to figure out whether you’ve saved enough for retirement.

Welcome to NerdWallet’s Smart Money podcast. I’m Sean Pyles.

Liz Weston: And I’m Liz Weston.

Sean Pyles: Today, we’re bringing you back a couple of our most popular money tips from the last couple years. First, we’ll discuss whether you can help a family member’s credit score by making them an authorized user on your credit cards. Then we’ll talk about how to save enough to retire, including knowing how much money you need and how to get there.

Liz Weston: And listeners, please let us know if you’ve used any of the tips or tricks we cover in today’s episode. We’d love to hear from you. Leave us a voicemail or text the Nerd hotline at 901-730-6373. That’s 901-730-NERD. Or email a voice memo to [email protected] And now on with the show.

Sean Pyles: This episode’s Money Question comes from a listener’s voicemail. Here it is.

Jack: Hey, NerdWallet team, this is Jack. My question was whether or not it was a good idea to add my brothers and sisters as authorized users on my credit card. I myself have a fairly good credit score. It’s about 799. I have one older brother and then eight younger brothers and sisters. None of them have opened a line of credit yet, so I believe that would mean they don’t have a credit score. I just want to make sure that they are set up so when they’re trying to look for an apartment or get some kind of a loan down the line that they have a credit score to build off of.

So my question is: if I can add brothers and sisters to my line of credit, if there are any drawbacks to doing so, and is there a limit to how many I can add? My older brother is 27, and then my younger brothers and sisters are ages 23 through 5. My parents have been very diligent while I was growing up to teach us to avoid debt and to be very wary of credit cards and to use cash whenever we can just for some background info. Thank you all. Bye.

Liz Weston: To help us answer Jack’s question, on this episode of the podcast, we’re joined by credit pro Bev O’Shea. Welcome back, Bev.

Bev O’Shea: Thank you, Liz. It’s a pleasure to be back.

Sean Pyles: It’s always so great to have you on, Bev. To start, can you please explain what an authorized user is?

Bev O’Shea: An authorized user is somebody who is allowed to use your credit card but is not responsible for paying it back.

Sean Pyles: Sounds like a pretty sweet deal for them.

Bev O’Shea: It can be. My kids have been authorized users without it being a sweet deal, and —

Sean Pyles: I’m guessing because you put some rules in place.

Bev O’Shea: When I added them as authorized users, I didn’t give them cards, so they didn’t really have any privileges, but they were able to use my credit history to help their scores.

Sean Pyles: And that’s one of the main benefits of setting up someone as an authorized user.

Bev O’Shea: Basically, they’re able to use my credit profile as part of theirs. That is how, say, an 18-year-old can have a credit history of 26 years.

And there are some other advantages as well. They also inherit my payment record. They inherit my credit utilization or my credit limits. So all of that can help somebody who’s new to credit have a much longer and perhaps much better credit track record than they would otherwise.

Liz Weston: So your history with that particular card is essentially exported to their credit file?

Bev O’Shea: Exactly right, Liz.

Liz Weston: OK.

Sean Pyles: And this also works as a way to teach someone how to use credit?

Bev O’Shea: It does if that’s what you choose to do, and I personally think that is what you should choose to do if you’re going to lend your name and your history. Take it as an opportunity to teach them about credit so that they can do this without you one day.

Sean Pyles: Are there any drawbacks to setting someone up as an authorized user?

Bev O’Shea: Oh, absolutely. Because authorized users can use your card and they don’t have to pay it back, it needs to be somebody that you really, really trust because if they lend the card to somebody else and somebody else uses it, you’re responsible. It’s your bill. That is a big risk.

Sean Pyles: So that’s why you might want to set someone up who’s just learning the ropes of credit but maybe not give them access to the card.

Bev O’Shea: Maybe. Or there are a few credit cards where you can set an authorized user’s credit limit. You might be able to set a limit as low as maybe $200.

Sean Pyles: Is it possible as well to limit the types of transactions? Like if you set someone up as an authorized user on your credit card, they may not be able to purchase something like alcohol?

Bev O’Shea: Not that I’m aware of. There is that with some debit cards that some parents use for allowance.

Liz Weston: So what kind of a difference would it make in someone’s credit profile if they were added as an authorized user?

Bev O’Shea: The less that they have in their credit profile, the bigger a difference it’s going to make. Somebody who has, say, had several cards and they’ve had some late payments and they’re looking for some points may benefit a little bit from your credit history, but they will not benefit nearly as much as somebody who maybe has one or two credit cards and not much credit history. That person will benefit much more.

Liz Weston: Or in this case, no credit history, it sounds like.

Sean Pyles: Right. If you set someone up as an authorized user on an account that had late payments, could that actually drag down their credit?

Bev O’Shea: It could, yeah, but it doesn’t with all credit bureaus, which is also a little bit strange. I know that Experian will automatically remove a delinquent account if the authorized user isn’t responsible for paying them.

Sean Pyles: So it only gives them the good information, not the bad?

Bev O’Shea: That’s with Experian. I’m not sure about the other two.

Sean Pyles: I can see how this could get a little bit complicated.

Liz Weston: Are there specific guidelines on who you can and can’t add as an authorized user? Can you add, like, a sibling, spouse, a friend, a roommate?

Bev O’Shea: There’s sometimes limits on age. I’ve heard as young as 13. Most of them are 18, though.

Liz Weston: I remember that with my daughter. I first added her to a card, and it turned out that that particular card didn’t report anybody under 18. So I had to switch, added her to another card. And then when she turned 18, I added her to the first card. If you followed all that.

Sean Pyles: Yeah. Well, what about the number of people you can add? Our listener has many siblings who they are so generously hoping to help with this tool. Is there a number limit of people that you can add onto an account?

Bev O’Shea: I don’t think there normally is a limit. And I would think within a family, he’s probably not going to run into a lot of problems. But I do want to talk a minute about some of the younger siblings. He’s not going to be able to get them credit cards, but there are things that can be done to protect their credit history to keep them from becoming victims of identity theft.

Sean Pyles: What’s the age barrier that they won’t be able to become an AU, but they can still be protected through different tools?

Bev O’Shea: There’s not. You can actually freeze the credit of a newborn. And credit freezing is what I would advise even for these children who are much, much too young to have credit cards or credit reports.

Liz Weston: And that’s a bit of a pain to do, but it’s worth it.

Bev O’Shea: You have to do it with all three credit bureaus. All three have slightly different procedures for doing it. NerdWallet has a story about how to do it one way for all three, basically filling out their documents and sending them exactly the same package of documents.

Sean Pyles: We often recommend folks keep their credit profiles frozen in general when they’re not using them so that they can prevent incidents of fraud.

Liz Weston: In this case, Jack is not their parent, though. And doesn’t it have to be a parent that does the freezing?

Bev O’Shea: It does have to be a parent or guardian, yes.

Liz Weston: OK. So this is information he could present to the parents and say, “This is a good idea for you to do”?

Bev O’Shea: Yeah, and the reason is because a child particularly can have his or her Social Security number stolen. And because we don’t tend to check children’s credit, it can go on for years before it’s discovered. So it’s a very good idea to freeze their credit. All they do is create a file that has nothing in it, but information name and Social Security and it’s frozen so that nobody else can use that number for fraud.

Sean Pyles: I have a question about building credit in general. If someone doesn’t have such a benevolent sibling to help them in this way, what are some tools that people can use to help establish their credit in general?

Bev O’Shea: Assuming that they have an income, they can do something like get a credit-builder loan, which is basically turning a regular loan on its head. You pay it back first, and then you get the money. Or they could get a secured credit card, and in that case, you secure it, as it sounds like, with a deposit. And that deposit is typically but not always your credit limit. Some of them even let you graduate to just a regular credit card after a certain number of months of on-time payments. That can be a very good option.

Sean Pyles: What about products like Experian Boost? I’ve been seeing so many more advertisements for this lately. Do you think it’s a good tool for people?

Bev O’Shea: Yes. Experian Boost can use some of your banking information to report some of these subscriptions that you have — utilities, things like Netflix, other things — as regular payments, as “tradelines,” as they’re called in credit speak. And that can help your credit score.

Experian has an additional product called Experian Go that is offered to consumers who don’t seem to have a credit profile out there. Go is basically just the file with nothing in it. But then once you have Go, you will be asked, “Do you want us to go and check this banking information to import into your file so you do have a credit file?” at that point.

Liz Weston: And again, this is for just a single credit bureau, so if you’re hoping to build your credit at all three bureaus, the traditional ways sound like they’re still the best, which is a credit-builder loan, a secured credit card. Those are sort of the basic baby steps towards building credit that work for all three bureaus.

Bev O’Shea: Well, check to make sure that they report to all three bureaus. Sometimes some of them only report to one or two, and it’s really important that they report to all three.

Liz Weston: Very good point, yeah.

Sean Pyles: What would be the best way for someone to check that?

Bev O’Shea: Just ask. It’s not always displayed prominently that they’re not reporting to all three.

Sean Pyles: Terms and conditions, that kind of thing.

Bev O’Shea: And the other thing that you may want to do, Sean, is check the fees. Fees can vary a whole lot. And so do look at that and understand what you’re going to be paying for this credit help.

Sean Pyles: All right. Bev, do you have any final thoughts around authorized users or things you think people should keep in mind?

Bev O’Shea: I do. Some of them have very different policies in their terms and conditions. Some will allow an authorized user to ask to be taken off an account and will do that. Others require that the primary user ask that the authorized user be taken off the account.

Some allow authorized users to see the whole purchase history, every transaction. You may not want that for authorized users. So do check the terms and conditions and read really carefully. It’s not alike for every card.

Now one last thing. If you’ve got premium cards, sometimes those can charge for additional cards for authorized users, so check.

Sean Pyles: Oh, interesting. All right.

Liz Weston: Yeah, and that gets expensive. Ask me how I know.

Sean Pyles: Oh, boy. OK. Well, Beth, thank you so much for chatting with us. It’s always a joy.

Bev O’Shea: Oh, thank you, Sean. It’s been fun.

Sean Pyles: Before we get into our last listener question, I want to quickly remind you that we are currently conducting a listener survey to help us improve the show, and you could even win a prize if you take it. You can find the survey at nerdwallet.com/podsurvey. You’ll be automatically entered into our Smart Money podcast sweepstakes for a chance to win a $100 Amazon gift card when you complete and submit the survey form. Read the official rules page for more details, which can be found at nerdwallet.com/podsurvey.

Liz Weston: And now let’s get to our next listener question.

Sean Pyles: This episode’s Money Question comes from Jennifer, who left us a voicemail. Here it is.

Jennifer: Hi, my name’s Jennifer. I’m a public school teacher ending up 31 years doing it. And I would really, really like to retire from education sometime soon. But I’m concerned, I feel like there’s not enough money in my 403(b). I’m putting away about $1,000 a month into it. I still have a mortgage, I have a car payment, and I’m 58. I don’t know if you could offer any tips for teachers. I know we are very, very lucky to have a pension and health care, although they are going to gut our health care, is what we’re hearing, in the next round of negotiations on our contract. And by the way, I don’t know if it matters, but I do make about $101,000 a year. I have no dependents, but I feel like I don’t have enough money. I guess everybody feels that way. I just feel like I need some professional tips. I’d be so grateful. Thank you. Bye-bye.

Sean Pyles: All right. And this episode, it is just Liz and I answering Jennifer’s question. Let’s dive in.

Liz Weston: All right.

Sean Pyles: So, Liz, part of why it’s just you and me, a big part of why, is because you know a lot about retirement and you’ve answered tons of questions about how to know whether you have enough to retire and all of the complicated ins and outs of it. So let’s start with the basics here. How could someone know whether they have enough to retire?

Liz Weston: That’s the question, right? Especially when we’re facing a funky market and inflation and just the normal human worries about a big change in your life, because when retirement’s a long way away, it just is this abstract thing. And then as you get older and it gets closer and closer, you realize, “Whoa, I’m actually going to have to live on this money that I’m putting aside. How am I going to do this?”

So my best advice is: Web calculators and web tools are great when you’re in the saving process, but when it’s time to start spending that money down, you really need to talk to a human being. You need to find somebody who has been through this before. This is your first time, right?

Sean Pyles: Yeah.

Liz Weston: So you need to have a human being who is experienced at guiding people through retirement, and a fee-only financial planner can be that guide for you. They have done this over and over. They know the questions to ask, and they know the things to watch out for. Because this is the first time that you’re doing it, you don’t know what you don’t know, and it’s really easy to make mistakes that you can’t recover from. And that’s the scary part — that you screw something up, you can’t fix it, and now you’re going to run out of money too quick.

Sean Pyles: Can you think of common mistakes that folks will make going into retirement that might be irreparable?

Liz Weston: Yeah, one of them is taking Social Security too early. There are so many people who grab it at the first instance, which is typically when you turn 62; that’s the earliest you can take Social Security. You’re accepting a permanent reduction in your check when you do that. People don’t realize how long they’re likely to live, and most people are going to live past what’s called the break-even point, where if they had waited, the value of their checks would more than outweigh the ones that they’re passing up. Because it really is set up so that if you wait a little bit, you’re going to get a much larger check. That’s the bottom line.

Sean Pyles: Isn’t it that every year you delay taking Social Security, the amount that you get just goes up and up by a certain percentage?

Liz Weston: Yes, exactly. Which is why it’s almost always worth waiting at least until your full retirement age, which is somewhere between 66 and 67. But often it’s worth waiting until you’re 70, when your check maxes out. But I hear from so many people who just either can’t get that through their head or they don’t believe it or they’re just certain that they have to grab it now because Social Security is going away.

Social Security is not going away. It’s like the most popular federal program. The trust fund is going to run out of money at some point, but even if Congress doesn’t fix that — and chances are very good it will fix it — but even if Congress doesn’t, the system is still taking enough money to pay 80% of the benefits that have been promised. So grabbing Social Security early because you’re afraid it’s going to run out of money is just not a smart move.

But all this stuff is something that you need to talk over with a financial planner who’s really informed, understands how Social Security claiming works and can help you with other things like Medicare choices.

Sean Pyles: Yeah, I was going to ask about that because that can be very complicated to navigate, too. So what consideration does someone have when it comes to Medicare choices?

Liz Weston: Well, typically you need to sign up for Part A, the part that’s free that you typically don’t pay premiums for, and that covers hospitalization. You also need to pay for Part B, which is the doctors visits, and that is a monthly premium. And then there’s Part D, which is the prescription insurance. There’s also something called Medicare Part C, which is like a private insurance alternative to traditional Medicare.

Our listener mentioned retiree health benefits. Now those are increasingly rare. They used to be fairly common, where people could continue to get health insurance through retirement from their company. Now, the plans that still have that typically end them at age 65 when you apply for Medicare. So if you do have this rare benefit, you want to find out exactly how it interacts with Medicare. And if you don’t have this benefit, you want to make sure you have some other health insurance to make sure you’re covered, if you are retiring before Medicare age.

So there’s just way too much to go into now. We’ve got a ton of information on our site about that, but it’s super complicated, and there are some serious downsides if you make the wrong choice. You really want to get some help with this.

Sean Pyles: Yeah. One thing that strikes me about retirement is that there’s a big difference between saving enough throughout your life and somehow being one of those magical people that has saved enough. But actually feeling like you have enough money to retire is a completely different thing.

So I want to talk about that as well. How do you flip the switch from working your entire life to retiring and then actually going from saving all of that money to spending that money?

Liz Weston: A lot of people have trouble with that. I was just looking at a study that said that most middle-income couples continue saving, continue building wealth into their 80s. Part of it is it’s just really hard. If you have a lifetime of saving and that habit built in, it’s really hard to stop.

But on the other hand, there’s also some big end of life expenses that a lot of people have to deal with. Long-term care, medical bills, all that kind of stuff. Most people have to be comfortable with the idea of seeing their balances go down. Because most people are just not going to be able to save enough to where they can only essentially live on the interest or only live on dividends or not touch their principal. Most people are going to have to pay that down.

That said, I think a lot of people are more comfortable with spending down or with the idea of touching their principal if they have guaranteed income that’s enough to cover their expenses. So for some people, that might be Social Security, that’s guaranteed income. Other people might want to buy what’s called an immediate annuity. That’s basically you give a chunk of money to an insurance company and they give you a stream of monthly payments typically that last for life. And if you’ve got your basic expenses covered that way, then you can feel a little bit more comfortable. If your money’s in the market and it’s going up and down, you know, “OK, well, at least I’ve got shelter covered and food and transportation, I’m going to be fine.”

Sean Pyles: Yeah. Well, how can folks anticipate the amount of money that they’ll need in retirement? One approach is that you can look at your current monthly spending, multiply it times 12, and that’s how much you need to cover a year’s worth of expenses and then multiply that by the number of years that you would estimate you’ll be alive in retirement, I guess. How do you think that shakes out in practice?

Liz Weston: It’s really tough to figure this out if you’re several decades away from retirement. But as you approach retirement, you’re going to have a much better idea of what your expenses are likely to be. And then you take a look at the income side. OK, what are you expecting to get from Social Security? And as I said, it’s typically worth putting that off as long as possible and maybe drawing down from your retirement funds if that will allow you to put off starting Social Security. Then you have to figure out, how much are my medical expenses likely to be because they’ll still have to be paying for Medicare premiums and typically a supplemental policy on top of that.

There’s so many moving parts to this. That’s why people really need to talk to a financial planner. They have powerful software that can factor in all kinds of things, including, “If I draw too much from my retirement funds, how is that going to affect my Medicare premiums?” Because those are also sensitive to your income. Your premiums can actually go up if you make a lot of money.

When you’re a long way from retirement, you can pretty much figure on a sustainable withdrawal rate from your retirement funds of about 4%. Somewhere between 3% and 4% seems to be workable, but as you actually approach pulling the plug on work, you want to be really confident that you have enough and it’s sustainable, and that’s just not something you can do with rules of thumb.

Sean Pyles: Yeah. You mentioned the importance of talking with a fee-only financial advisor and also someone who has gone through this before because there’s so much that you don’t know that you don’t know. I’m wondering what questions you think someone who is talking with an advisor about this should bring up.

Liz Weston: Well, obviously the first thing is, “How do you get paid?” Because you want to make sure you actually are talking to a fee-only financial advisor, not a fee-based one, because fee-based is very different. They can accept commissions that might affect their recommendations.

I’d like to see at least a CFP as a minimum credential. That’s certified financial planner; that’s the credential I have. I would hope that they would have other clients like me, in my similar situation, especially with teachers. Our questioner is a teacher, and there’s lots of things that affect teachers’ retirement that may not affect other people’s retirements. That can be in interplay with teachers’ pensions and Social Security. There can be issues with their 403(b)s, which are different than 401(k)s. If I were a teacher, I’d want somebody that specializes in teachers.

Sean Pyles: Mm-hmm. I would also be curious to hear from a financial advisor like this what hiccups their other clients have encountered that maybe change their plan over the course of being retired.

Liz Weston: Yeah, exactly. This is kind of, in a weird way, like estate planning — because you want an estate planning attorney with a little gray in their hair, so they’ve seen their plans play out and they know what can go wrong. I think the same thing is true for retirement planning.

I mentioned the hiccups between Social Security and teachers’ pensions. The issue is a lot of teachers don’t pay into Social Security. So if they do happen to have earned a benefit or get, say, a spousal benefit, it can be reduced by their teacher’s pension. Exactly how that works, again, is super complicated, and you’re going to want somebody’s help to navigate that.

Sean Pyles: We should also maybe talk about different forms of retirement because a lot of folks nowadays who are retiring are maybe leaving the job they’ve had for quite a while but are still working part time or freelancing. How do you think that fits into retirement planning?

Liz Weston: I think it’s a really good idea to have some kind of glide path. I think the idea of just quitting and walking away on certain days may sound really good, but the reality is we get a lot from our work. We get social interaction, we get an intellectual stimulation, we get a sense of purpose. Walking away from that suddenly can be a real shock to the system.

So for that reason, for psychological, emotional, social reasons, having some kind of glide path where you’re stepping down to part-time work or consulting, something like that is really a good idea. And then you add into it the financial benefits of that because the money you’re earning is money that you don’t have to pull from your retirement funds. It allows you to either spend a little bit more or make sure that your money’s going to last longer or, in some cases, both. It’s really powerful to have some income coming in those early years.

Sean Pyles: Yeah. Some people aren’t in the position where they can choose when they retire, either for personal or perhaps medical reasons they’re forced to retire. How do you think they can manage this really difficult transition?

Liz Weston: Well, Sean, you made a really good point because, unfortunately, many, many people retire earlier than they expect, and that can really throw a wrench into their plans. So as always, if you can, possibly talk to some sort of fee-only advisor. If you can’t afford a fee-only CFP, there’s also financial coaches, accredited financial coaches, accredited financial counselors that tend to focus on people who are middle income, and they’re a little bit more affordable often. So that’s something to check into.

You just definitely want to know what’s ahead. And you want to make sure that as you’re drawing down your retirement funds, that you’re doing it in a sustainable way. I think a lot of people just try to wing this and spend whatever they’ve got and they run out of money too fast.

So especially if you’re retiring before you meant to, you are in grave danger, I think, of running out of money too early. So you want to get some advice about that. It’s possible that you may have to make some big changes to make this work. You may have to sell the big family house and move into somewhere smaller. You may need to even relocate to a different community in order to make your money last. But it’s better to do that early when you have more energy and health than you’ll have later. So it’s better to do that early than wait until the last minute when you’re out of cash.

Sean Pyles: Yeah. And no matter what, make sure that you’re getting help from someone because there are various resources available for different income levels that will help you navigate this very complicated transition.

Liz Weston: Yes. And our teacher is a little too young for Medicare, and a lot of people who are in that situation where they’re retiring earlier than they expect aren’t eligible for Medicare. So you want to check out the Affordable Care Act exchanges because most people are going to get some sort of subsidy to make that more affordable. And you do not want to be without health insurance. I don’t think at any age, but particularly as you get older, there’s just too many things that can go wrong and just cause catastrophic bills. So you want to make sure, if at all possible, you have that coverage.

Sean Pyles: And you hear these horror stories about people getting gigantic medical bills that drain their retirements and that can leave them in an even worse place.

Liz Weston: And your retirement funds are safe in bankruptcy, whereas your medical bills can be wiped out. So I hate hearing about people who have drained their retirement funds to pay medical bills, because they could have been protected in bankruptcy. So if you are in that situation, you definitely want to talk to a bankruptcy attorney about your options before you start either draining your retirement funds or your home equity to pay for that.

Sean Pyles: Something else I wanted to touch on was the impact of inflation on people’s retirement plans because they had saved a certain amount over all of these years expecting things would be maybe a certain price, and now the price of all these things has gone up, from housing to gasoline to groceries. What effect do you think current inflation rates are having on people’s retirement plans?

Liz Weston: Typically, the people who have been most vulnerable to inflation are the ones on fixed incomes, so the ones in retirement. The good news is that if you do get Social Security, that has a cost-of-living adjustment built into it, so that can help offset the ravages of inflation. But you typically just can’t earn more money to make up for higher prices. That’s why it’s so important to talk to an advisor so that you know that your financial plan has been stress tested so that you can get through inflationary periods without running out of money.

Sean Pyles: And some people may find that they want to go back and get a part-time job to help cover some of these increased expenses, too — which, if they’re capable to do that, is I think an OK option as well.

Liz Weston: Oh, yeah, absolutely. Any way that you can get more money coming in can help offset that.

And then just being as savvy a consumer as you possibly can be. One of the upsides to retirement is that you do have more time and you do have more control of your time. So there are things that maybe you could do for yourself that you might have paid for while you were working.

Everybody’s inflation rate is different. It depends on what you’re spending your money on, how you’re spending your time, but knowing that inflation is out there and that prices are rising can make people think, “Oh, maybe I want to put off retirement a little bit longer, save a little bit more money.” Again, run this all past your advisor. Make sure that you’re making smart choices. Because there’s also a limit to time and energy. You don’t want to put off retirement indefinitely and then wind up too sick and not able to do the things that you want to do.

Sean Pyles: Well, you hear stories about people who saved so much for retirement, they wanted to travel the world, and then when they actually did retire, they’re not able to do all the things they had in store.

Liz Weston: Yeah, we are not guaranteed good health. We are not guaranteed energy. You really have to make that trade-off in deciding, “OK, this is time for me to enjoy the life that I’ve been looking forward to.”

And I think I keep coming back to the professional, but I think having somebody really take a look at your retirement plan and give you their opinion and run it through some powerful software, that can give you the comfort that you need to pull the plug or start that glide path or however you decided to do it. Just having that one extra person with some experience looking over your shoulder and going, “Yep, you can do this.” That can give you the confidence to go forward.

Sean Pyles: All right. Well, Liz, do you have any final thoughts for our listener or anyone else that’s thinking about retiring?

Liz Weston: I think if you get the OK from your financial advisor, I think it could be a very exciting time in your life and something to really look forward to.

Sean Pyles: Great.

Liz, what do you think you’ll want to do when you retire?

Liz Weston: Well, when I think about retiring, I think more: More travel, more time with friends and family, more hours spent making teeny tiny things. What about you?

Sean Pyles: Oh, I love that. How fun. I think a lot of people hear “retirement” and they think maybe an ending of things, but really you can do so much more with all that time that you have.

Liz Weston: Yes, that’s the plan.

Sean Pyles: I think I’m going to spend my days gardening, painting, hanging out at the beach — the things I already spend my time doing, but just doing it more often. Only another 33 years to go.

All right. That is all we have for this episode. Do you have a Money Question of your own? Turn to the Nerds and call or text us your questions at 901-730-6373. That’s 901-730-NERD. You can also email us at [email protected]

Liz Weston: Remember to follow our show on your favorite podcast app to automatically get new episodes. If you’re listening on Apple Podcasts or Spotify, please tap the 5-star button to rate the show. We really appreciate that.

Sean Pyles: This episode was produced by Cody Gough and myself with help from Liz. Kaely Monahan mixed this episode with additional audio editing by Cody. And a big thank-you to the folks on the NerdWallet copy desk for all their help.