The usual age of eligibility
for Medicare benefits is 65,
although certain people
qualify for the program
earlier ( medicare.gov).
is an Emmy Award–
winning TV host, New
York Times best-selling
author and motivational speaker. Orman
will answer selected
questions in this
column. She regrets
questions cannot be
in the subject line.
Q&A with Suze Orman
P.O. Box 34088
cover the high costs in the remaining
years before you are eligible for Medicare.
Another option might be for you and
your wife to look for part-time work that
you would enjoy and that would provide
some income to help you fund your insurance coverage.
Q We have refinanced our home and
taken out $250,000 cash for our two
sons’ college education. What is the best
thing we should do to maximize the cash
value of this fund while we need to
access it each year, from next year until
2025, when the second son will graduate from college?
—Stephanie G., Santa Clarita, California
A For all the other parents out there considering using their home to pay for college costs, my best advice is: Do not do
this. You are putting your own security at
risk. What if you get laid off, or ill, and
can’t afford to stay in that house? If you
hadn’t tapped the equity, you could have
downsized and pocketed a lot of savings
at that juncture. Once you cash out your
equity and use it for something else, you
lose that flexibility.
As for how to invest the ;;;;,;;;,
your focus should be on preserving the
money, period. Any money you need in
the next five to ;; years should not be
invested in risky assets. That money
needs to be safe and ready for you. One
option is putting some of the money into
a five-year certificate of deposit. Some
federally insured online banks offer
interest rates that are at least a percentage point more than what you can earn
on basic savings.
Advice on charting two
very di;erent paths
Q I’m 56 years old and own my own CPA
practice. I can sell it and be able to retire
with my wife. My worry is about health
insurance coverage. Do you have any
advice on how I can obtain health insurance coverage between now and when
I’m 65, when Medicare starts, without
paying exorbitant amounts of money?
—Matt J., Aurora, Colorado
A Once you retire your income may be
low enough that you will qualify for some
premium subsidies. You’re a CPA, so I
know you can do a quick estimate of your
expected income once you retire. Then
check with your state’s exchange to see if
you would qualify for a subsidy.
If you really want to retire early, run
the numbers and decide if you have sufficient income (or can reduce your overhead) so you can cover the premiums and
out-of-pocket costs. Or keep working for
a few more years and save up money to
College finance 101
Tapping your home equity or
retirement funds to pay for
college gets a failing grade
from me. Your focus should
be on schools that are a good
financial fit. That may be a
private college that o;ers a
generous aid package, or a
state school where tuition is
If your family needs to
borrow, your child should take
out federal student loans.
Terms for student loans are
better than federal PLUS
loans for parents. Parents
must not take their eyes o;
building retirement security.
Your kid can get loans for
college. You can’t get loans