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A plan for the Collinses
Retiring on the water
A plan for the Collinses
Even if Jim loses his job this year, they may be able to have their house and keep their standard of living, says Bedda D'Angelo, a planner in Durham.

Jim would get a buyout of one year's pay; he's also guaranteed a $2,000-a-month pension. Assuming they put $300,000 on a custom home, the payment for a $350,000, 30-year mortgage at 6 percent is more than $2,000 a month.

That should be fine if Jim works till age 63, which he plans to do even if at another company. Later "the combination of his pension and their Social Security will cover basic living expenses and the mortgage," says D'Angelo.

But they must use more savings to stay at $100,000 a year. As an alternative, they might look at an existing home, which would knock the price to $400,000 and the mortgage to $1,200 a month.

Whether or not they build, they must make their investments work harder to ensure that they'll be able to maintain their lifestyle for the next 30-odd years, says D'Angelo.

Now 18 percent of their portfolio is in costly mutual funds; 15 percent is in bank money-market funds. They should transfer their investments to no-load, low-fee funds; all but $50,000 of their money market should go into diversified stock and bond funds; the rest, in a lowcost tax-free money market.

Says Jim in response: "We're happy to scale back a bit. We're not putting aside our dream to build just yet, but we are going to look at existing homes."

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.