On this episode of Saving the American Dream, we’ll answer your mailbag questions about all things finances.

I need about $5,000 to live on a month in retirement. My Social Security is about $5,300, coupled with my pension. Can I leave my entire 401k to my son?

Assuming you’re 65, most likely not. You need to consider cost of living increases in the future. Twenty years from now, is $5,000 a month going to spend like $5,000 a month? The answer is probably not. It may spend like $3,000 a month.

We also don’t know what health-related expenses you might have during retirement.

Should I be worried about inflation in the future?

Inflation was significantly higher in the 1970s and 1980s than it is now. So, historically inflation has been a lot higher. At the very least, it’s likely we get closer to historical norms as we move forward into the future.

Should mutual funds return more than 10% a year?

You shouldn’t be counting on getting 10% or 12% in your mutual funds. If you are actually getting 10% in your mutual fund, that’s what you’re receiving after fees and taxes that you’re paying.

You can’t invest money for free. There’s going to be a series of costs that are associated with your mutual funds that you own from the expense ratios of the mutual fund itself, to the internal costs of the trades.

Listen to the full podcast or use the timestamps below to jump to a specific section.

Navigating the Show

[2:06] – Can I leave 401k to son?

[6:55] – Worry about inflation?

[9:04] – Mutual funds

[14:05] – Investing

[16:54] – Max out 401k and Roth?

“People are living significantly longer, which has been a driving force of why pensions have gone away.”

– Michael Schulte