Over 50 ? No Pension, No 401K ? What Now?

Let?s be honest, most retirement posts in the personal finance blogging world are aimed squarely at people in their 20s and 30s. Those over 50 are presumed to not exist. It?s almost ironic, isn?t it, talking about retirement to people who are so far away from retirement that it?s very nearly irrelevant while ignoring those for whom it?s right around the corner? And especially to those who have no pension or 401k.

Maybe it?s that the vast majority of people on the web are under 35, or maybe it?s just easier making multi-decade projections to a group of people so far from retirement that they?ll never remember any bad advice they?d gotten early in life. And in a different direction, all things are possible when your time horizon is 30, 40 or 50 years. Those magical retirement projections that?ll turn us all into millionaires just wouldn?t work without all those decades!

But what if you don?t have decades to accumulate a retirement fortune? What if you?re over 50 and retirement is just a few years away? If you don?t have at least a healthy six figure portfolio, how do you prepare for retirement now that the luxury of time is no longer available to work in your favor?

Get working on Retirement Plan B

Over 50 ? No Pension, No 401K ? What Now?
Over 50 ? No Pension, No 401K ? What Now?
Delay retirement. If retirement at age 65 isn?t a doable goal, move it out to 68, 70 or even 75. Not only will that provide extra time to accumulate additional funds for retirement, but it will also shorten the time period you need to cover. For example, assuming a lifespan of 85 years, you?ll need to accumulate enough money last for 20 years if you retire at 65. But delay retirement until 70, and you only need to cover 15 years. The longer you can work, the smaller your retirement savings need to be.

Ditch your debt – pronto! If you can?t raise the income, you?ll have to lower the outgo. If you won?t have a rich retirement plan to carry you in your golden years, then one of the single best courses of action you can take is to get to work on being debt free.

A disturbing trend is developing in which an increasing number of people are carrying higher debt levels into retirement than ever before. People are still paying mortgages well into their 70s! If retirement resources are on the slim side, you can?t afford to be one of the emerging elderly debtor class. Pound for pound, eliminating debt is more effective at improving cash flow than putting an equivalent amount into savings. This is especially true if you?re within 10 or 15 years of retirement. Equally important, once your debts are gone, you?ll have that much more money to put into savings.

Get started on a post-retirement career. Relatively few people will have the retirement resources by age 65 to live the classic life of an unrestricted full time retiree. (Most of the ones who will are already rich!) When we add to that equation the actuarial nightmare that is Social Security, a lot good people are going to be working a lot longer than age 65! Don?t dread it, embrace it!

You may not be able to continue on your present job, or even in your current career much past 65, but you have time now to develop a new career or to begin a side business. Get it going now, and build it up so that you can be fully self sustaining by the time you reach 65. Most people view retirement as an escape from work they hate, but if you?re doing work that you truly enjoy it won?t feel like work and you may even lose the desire to retire.

Develop multiple income streams. If you don?t have a rich retirement plan, you can add a good measure of security to your financial picture by developing multiple income streams. Plan on relying on Social Security, an income from a side business, seasonal or part time jobs and as many passive sources as you can develop. Ten or 15 years may not be a lot of time to build a big retirement portfolio, but it?s more than enough time to develop two or three or more income streams.

If you’re interested in developing additional income streams, either for retirement or to help prepare for it and fund it, check out my post on freelance blog writing. It’s the kind of work and business you can easily run well past retirement age.

Start saving as much as you can now! I?m of the opinion that most people accumulate the biggest share of their wealth during a single ten or 15 year period when all things financial are breaking their way. Saving at an early age certainly helps, but life can get in the way of even the best executed savings plans, especially when you have children. But if you?re past the child rearing years, and at a high level in earnings, you can make up for lost time much quicker than you think. You may not have the time horizon to accumulate a seven figure retirement plan but what ever you are able to save from this point forward will make life that much easier later. Never give up hope on this!

Even if you?re covered by a retirement plan (and especially if you?re not) the IRS allows people who are over 50 and within certain very generous income limits to deduct up to $6,500 towards an individual retirement account (IRA). Even if you have no other savings, stashing away $6,500 per year for 15 years will grow to $97,500 plus investment income. That won?t be enough money to retire to the beach, but it will provide a nice cushion to back up paychecks from Social Security and any job or business income you have later on.

What ever you do, don?t speculate! There may be a strong temptation to ?make up for lost time? by plowing money into risky investments looking to make a big hit. But it?s far more likely that you?ll get clobbered for trying. Since you have a shorter time horizon and less money to play with, keep your investment choices on the conservative side of the investment universe. Yes, you have less time to grow your portfolio, but you also have less time to cover large losses.

Stop worrying about it. We often forget that our lives are what we do everyday, not the grandiose plans we hope to achieve. While a generous retirement plan might make you more comfortable, it won?t necessarily make you happy?and that?s the real goal throughout life. Work on the non-financial aspects of your life?your health, your relationships, your faith, your hobbies and your passions. Those are the elements of life we truly crave, but often ignore in favor of financial pursuits because we mistakenly think they can be bought with money. The better your health, the stronger your relationships with God and with people, the happier you are, the more you live your passions, the less important money will be.

What would you suggest to a person over 50?or even over 40?who will be unlikely to accumulate a rich retirement plan by the time they reach 65?

( Photo courtesy of Robert Couse-Baker )

195 Responses to Over 50 ? No Pension, No 401K ? What Now?

  1. This is such a good topic.
    Maybe unfortunately so. According to stats, most folks in their 20s and 30s aren’t even thinking of retirement.
    But it’s all in how you look at it. Don’t look at it like you can’t retire, look at it as a time to explore a new career. I just read a story of a woman who earned her degree and began teaching at age 55. She started a whole new career.

  2. Matt, I completely agree and that’s the point of the post. There’s so much emphasis on the accumulation of money in regard to retirement, that I think we’re missing the need to continue to live life to the fullest to the very end.

    In addition, a pure money chase prepares poorly for the business of living every day, because the prize is always a higher number. Though the post is specifically targeted at people over 50, it really applies to most people, since statistically most people won’t have anywhere near enough money for full retirement and will need to find other ways to survive.

  3. On the point about living life to the fullest, I agree … but I think you haven’t gone far enough. People NEED to find work (maybe as a side job now, or full time work if possible) that is in alignment with their passions and personal talents. If your work isn’t in alignment with your passions and talents, you are no where near your potential for providing value and maximizing your income.

    I don’t agree with some of the other advice. Eliminating high interest debt is good. Getting rid of low interest debt is counter-productive to building wealth.

    What IS important is that you have A financial strategy and that you stick to it … rather than just trying to follow rules of thumb or the emotional whims of the moment. That is the problem. People don’t even have a “Plan A” much less a “Plan B.”

  4. John, Well put! If we get into work we’re passionate about, that blends with who we are and want to be, retirement becomes a moot point. Saving money for our “golden years” will mostly be for the purpose of accumulating funds for emergencies or to level out income fluctuations. That’s pretty much what we should be doing for all of our lives, from one end to the other.

    The “wall” we construct at age 65 is largely of our own making. We should be out happily accomplishing until we draw our last breath!

  5. My suggestion: don’t forget to take care of yourself. As you get older a healthy body is at least as important as a healthy portfolio, and especially if you don’t have a healthy portfolio you are going to need a healthy body to continue to be productive in your golden years. Delaying retirement and having a post retirement career work much better if you still have good mobility and energy. I hear many do not choose to retire, people often “retire” when a health issue forces them to, ready or not.

  6. Chris, Very true. Health is the unsung preparation when it comes to retirement. Maybe the assumption is that if we have enough money, our bodies will take care of themselves.

    Better to hit 65 with good health and no money, then with money and poor health. At least with health, there’s an excellent chance of earning an income. With poor health, money can disappear quickly.

    We often forget that money is a tool, not a goal.

  7. What have you been doing with your life to be over 50 and have no retirement savings? Very poor planning, I say. Anyway, the best way to look at it is as a game or challenge. How much can I sock away before I retire. I have always looked at any problem as a challenge to overcome. Not as something too hard or hopeless to try. … In this case, you need to build cash flow/passive income. I disagree with the idea that you have to be conservative. I think you are so far behind, you will need to take on more risk to have any hope of catching up for 50 years of doing nothing right. The 3 best places to take that risk are the stock market, real estate and your own business. Sticking money in a money market or bank savings account will never get you to a secure retirement this late in your life.

  8. Ken, the purpose of the post is to address the fact that there are millions of people over 50 who for what ever reason haven’t been able to salt away money, or enough money, and what can be done to fix it. We’re trying to address it in a positive, non-judgemental way.

    Real life isn’t life as it exists in the financial press or even on pf blogs. People do go through career crises, face illness, care of loved ones, or yes, excercise less than perfect judgement. But that’s all part of life, isn’t it?

  9. My husband and I are just over 50, and while we have some money saved, it isn’t much. And since we’re both in struggling industries (him: homebuilding, me: newspaper), and have two kids in college, now’s not a very liquid time, cash-wise. I’d like to share an important point for many people: If you have kids, and you had them in your 20s or early to mid 40s, you will not be supporting them much past your mid-50s. If you are helping them through college, as we are, know they’ll be done and on their own in five or six years from the start date, in most cases. I know my kids are going to do everything they can to avoid living with us any longer than necessary once they graduate. They’ve told us as much (they’re independant types). That means we’ll have much more of our income at OUR disposal than we have had since the first child came along. We’ll be power-loading the IRAs those last few working years as well as paying any remaining outstanding debt. Just something to remember.

  10. Michelle, thanks for sharing your story. From what I’ve seen, it’s more common than many like to believe. Not everyone’s career is an elevator ride to the top, and it’s often difficult for people in their 20s and 30s to imagine that anyone might arrive in their 50s without being on their way to a seven figure retirement plan. But that’s what can happen when you’re busy taking care of everyone’s needs–like your children.

    I agree, it’s not a time for despair. You’re looking at it in the right way, that once you’re kids are done with college, you’ll have significant resources to concentrate into retirement. All we can do is all we can do with the circumstances we have to work with. Best of luck to you and your husband!

  11. I’m sorry, but “work” is not my idea of “life.”

    I want to STOP working, not hear that I have to work till I’m so old and feeble that all I have left is sitting around waiting for various “health” “care” “providers” to do a total cashectomy on all I struggled to put together in my aging years. That’s not retirement, that’s serfdom.

    Our society is simply refusing to deal with longevity in intelligent, compassionate ways. Elders should be encouraged not to work, but to be elders, and there should be a significant safety net for that.

    Work means selling your time for cash, living or planning to live hand to mouth in a cash-based society which has monetarized everything from the water we drink to our very homes. All so that a small cadre of overseers can make a huge profit on us all.

    This is an appalling outrage, and although I am in my 50s, with good savings, I consider telling people, “Well, you’ll just have to work till you’re 80! Get used to it!” the opposite of “out of a rut.” This is the same old feudal rut, imposed on longer lives, and leaving no hope of escape.

    I don’t WANT work in my old age. I don’t WANT to be passionate. I want to be quiet, wise, and centered. Not scurrying around with the latest iCrap and a bunch of Boomer baloney that says You Are What You Earn, and that if your days consist of just being here now, you aren’t as valuable as those irritating types constantly running in the hamster wheel of consumption, image, and addiction to way too much excitement, energy, and activity.

  12. Mikke–what’s your Plan B if you have a financial catastrophe prior to turning 65? That’s what this post is all about. I’m not advocating working INSTEAD of saving, but there have to be options for those who don’t have the fat bankrolls for full retirement. In other words, the post is addressed to the majority of people.

    If you have a $1 million saved by 65, what happens if there’s a run of double digit inflation?

  13. Good advice but how the heck do you develop multiple income streams? That is far easier said than done.

  14. Could be a part time job, a business or some form of passive income source, or a combination. It will depend on your individual motivation and talents. This is why they should be developed well before age 65.

  15. @tempo dulu

    You hit it pretty well there mentioning that it’s easier said than done. Investing, or in this case; developing multiple streams of income, this is the part that calls upon your financial intelligence. Your creative side. If you were to ask me what my streams are going to be, I’d respond with stocks, commodities, webpage ownership, and other forms of intellectual property.

    @Kevin M

    This is something that left me thinking quite a bit. I must say, you have left upon the blogosphere, a very rock solid point. Most of us do write about investing in ways that are tailored for youth. We’ve completely neglected the elder demographics who may be completely devoid of any assets at all (It’s been said that a huge chunk of baby boomers are entering retirement in debt. Mon dieu!) Their time is a lot more valuable than ours, given their lack of time that’s remaining!

    And it’s tough. There’s little to long term like we could in investing… And it would call upon them a larger demand of financial intelligence. And in the case of the indebted retirees, we’re already ahead of them in that regard.

    Shucks.. That’s a terrifying thought…

  16. Like Michelle, we entered my husband’s fifties with a small retirement fund. He just retired at 60. In that ten years we put away a good chunk It is possible.
    If inflation goes wild? We will all be in the same boat- won’t we?

  17. I don?t get a 401k or any program from work so set up my own Roth IRA and maxed it out. As you get older a healthy body is at least as important as a healthy portfolio, and especially if you don?t have a healthy portfolio you are going to need a healthy body to continue to be productive in your golden years. Delaying retirement and having a post retirement career work much better if you still have good mobility and energy. I hear many do not choose to retire, people often ?retire? when a health issue forces them to, ready or not.

  18. Hi Sarah–Good point about maintaining health, and equally good idea with the Roth, not only does it give you an opportunity to accumulate money for retirement, but you’ll be able to withdraw the money without tax consequences. That’ll be extra cash flow. I think it’s important to have some sort of retirement stash even if it won’t be enough to fund a golden retirement. It will be an enormous advantage to have a large financial reserve, especially if you’re still job dependent. The relief from stress alone will be significant, in addition to having extra resources.

    If you have Social Security, Medicare, a supplemental health plan, a full- or part-time income and a decent amount of reserves, you should be OK even without a pension or large retirement account. Living within your means is also the critical other half of retirement that rarely gets discussed. Most retirees that I’ve known over the years haven’t had fat pensions or retirement plans, but lived well because they learned how to live on the cheap. That’s a very real investment as well because it’s acquired by habit and that takes time to build, just like a retirement plan does.

  19. Can we get a discussion going with actual #’s and facts? Spouse and I are in our mid-50’s. Youngest kid just graduated from college (debt-free ’cause we financed it) and is now back living at home. We’ve only got about $650,000 in retirement funds right now and still owe $150,000 on our house. Youngest kid wants to go to law school and we can’t fund that, pay off our house and fully fund our retirement.

    If anyone has any suggestions, we’re all ears. Thanks much.

  20. I’m one of those people that Ken is referring to. I am early 50’s have little savings, do not own a home, have an old car, have a low paying job, have some debt, was laid off and out of work many times and took care of my mother with Alzheimers for 9 years. I am worried, as I should be, that I have nothing for retirement. I live in a sparsely furnished apt and am currently looking for a new job. It is a scary world for me. I’ve found out I suffer from depression and anxiety and realize I’ve done things wrong. The future doesn’t look bright for me, especially since I am alone and do not have any children. I’m trying to save and everytime I get something set aside my car breaks down. Its a vicious cycle for me and my nerves are shot.

  21. Hi Mary–Then I’d recommend that you follow the steps in this post. But in addition, think hard about what you really, really (really) want to do with your life that you might be able to make money with, and concentrate on developing it.

    Ideally, it should be something you like to do. If you start now you’ll have at least 10 years to build and perfect it. If you like what you are doing you can quite literally do it for the rest of your life. It won’t be retirement in the traditional sense, but it will be a better life, and that should always be the goal.

  22. I am 60 . Lost my primary home throgh foreclosure . Just filed bsnkrucy. Have been a full time realter for 20 years . Crash of2008 took m down. Now starting over. Ibdo have college degree , health is good.
    I still have an income property with no equity and it needs work. I do hustle with side jobs, real estate is pcming up. Don’t really want to retire.
    Can I still get back on trsck? Thank you . God bless everyone. Ted

  23. I have a career that I love as a nanny, but the benefits and retirement plans aren’t included. SO my 22 year career has kept me afloat, but without any retirement funds. I am 45 and would love to work until I am 70ish, but physically I doubt it will be possible. Have a bit of money coming from an inheritance but nothing to keep me from worrying about how to fund my old age. Would love to hear comments or a new blog post from people at retirement age of 60 or older who did not have a strong retirement funded and have made it work and are surviving their wise years!

  24. Hi Dee–With Ted’s permission, I will be adding a post this Monday (2/18) in which I will put forth my ideas on what he, at age 60, can do handle his retirement needs. Everyone’s situation is a little bit different of course, but his situation is increasingly common. I think the new post will stimulate some ideas.

    Please check back!

  25. hello..everyone..am 50.. yea.. i ve been really depress because..how my life turnout..but i try not to let it get me down.. am a former teacher..cause my mom got sick and i came back to town..to help my siblings with her..I have bout 24,000 in teacher retirement savings.. and am eligible to buy time since am vested..i have a small business.. i never had children..or ever married…i regret it.. kinda late now..but..i ll i can do is my best to be positive..and hope for the best….but getting back to retirement..its an annuity ,the retirement vehicle that is…does anyone have any suggestions about moving it..or should just keep it there..?..i do have a house..that am currently renting.. and am guessing in ten years..i may make around 50,000..if i sell it..to cut back..i live in my office/shop..i converted it to a nice apartment..(is that drastic?..naw i think its smart)..my business maybe in 10 years can sell it for 50,000..i hope to have at least 250,00 by age 65..i wonder how much that would be..in monthly payments….?…some of us made wrong mistakes..some of us..never could make it..even though we try..or maybe not try hard enough..in any case..life is worth living.. we have to make the absolute most of it..afterward..we are just taking memories..not money..so its great we all are motivating each other..

  26. Hi Mario–You actually have a lot going in your favor. You’re 50, so you still have 15-20 years to prepare for retirement. You’re single with no kids, which means you have no dependents and no kids to put through college.

    You also have a rental property, a businsess and your teacher retirement savings, so it’s not like you’re starting from scratch. My suggestion is that you save as much as you can for retirement (or even outside of it) and concentrate on paying off any loans you have on the rental property. When you turn 65 you’ll also have Social Security, and that will help.

    Also, rather than selling your business, could you continue to work for as long as you’re able? $20,000/year in income will be worth more than a $50,000 windfall from selling it.

  27. My wife and I have no extra money due to our income level and how much we owe. We only have our house payment and a car payment and then all the other kinds of bills everyone else has. The bottom line is that we have never had the kinds of income that our friends seem to have had. I do not know, honestly, what we could have done differently through these first 27 years of marriage. What do people like us do when we do not have ANY retirement money saved and no way of saving because of the small income we now have? We have our health (for now) but we know that retirement is coming sooner than later. We have always paid our bills and only have always had just enough to get by paycheck-to-paycheck. I really wonder what we are going to do. With social security not promising to be there for us (even if it is, the reports we get from the SSA tell us that its only going to be about $1,027.00 per month.) I do not feel very good about all this and really do not know what to do. I hate the thought of being retired with no or little income and have to drive to a senior center to get our meals or having someone deliver them to our house one day in the future. I volunteer occasionally at the local center and see all those seniors a lot of them very unhappy. I don’t want to turn out like them but I see it coming. My mother is 78 and her health is failing. And its really sad to see her sitting at that center just to get her meals.

  28. Thank you Kevin for the link to 60 and Have No Retirement Savings-Can I Get Back on Track?

    It seems as if attitude is all there is to it. I just do not want to be a burden to my children or anyone else. Only looking for answers and a little hope. DanB.

  29. Hi Dan–Yes, attitude has a lot to do with it. I don’t mean to minimize your’s or anyone else’s situation, but when your back is to the wall, there’s no choice but to keep going forward. You have to put the gloom and doom out of your head and become relentless. If you do, you’ll find there’s more than hope.

    I always think of my grandparents, they had no pensions or 401k plans, but they lived well until the end of their lives. They did what they did all their lives – they worked, they saved and they stayed out of debt. They always had a nice house, a refrigerator full of food, gas in the car, money in the bank and money in their pockets. There was nothing magic about turning 65. But they lived into their 80s and 90s and were never a burden to anyone.

  30. Thank you so much for your advice. My story is that I married young had kids in my 20s. Was always the breadwinner. Kids are grown now. When I tried to save something always came up so I had to dip in it. I’m 51 make just over 100000 per year have about 75000 in a 401k but that’s it. My biggest mistake was buying a no money down house about 6 years ago which in 2 years plummeted so my mortgage while current is under water. I have 2 mortgages and the monthly total payment on both is 3000. if I sell I will be paying the bank still after the sale. I do plan to work until I’m 65. I’m healthy and exercise regularly. Any ideas for me? I’m divorced.

  31. Hi Joanne – Your situation is far from hopeless. You have a high income and an excellent start on your 401k. Your two biggest problems are the house and the fact that your 401k probably won’t be large enough to meet all your income needs by the time you’re 65.

    I see three possible strategies here:

    1) Maximize your 401k contributions from here on, though that will be tough with the $3000 house payment.
    2) Work to pay down your mortgage(s) to the point where you can sell the house without having to write a check at the closing table. Then trade down to something with a far smaller payment, and direct the savings into your 401k.
    3) Start working on a career or business idea that can provide an additional source of income in retirement. It may only need to be part time and only for a few years, but it may cover any income weakenesses you have in retirement.

    I’d say accomplishing #2 should be the priority. Right now you have too much income going into shelter, and that’s the problem you need to fix most. Everything else will get clear once you do.

    I hope that helps! Please seek other opinions where you can, mine is just one of many.

  32. Thank you good advice. Forgot to mention that I bought in the height of the period when home prices were high. So my combined mortgage balance is around 436000, which includes my 2nd mortgage of 79000. I feel so overwhelmed at times. I like your idea about working on trying to increase my income so will pursue that diligently and try to save more in 401k.

  33. Just wondering what on earth will happen to me. I wasn’t am American citizen, but lived there from the age of 3 till I was 35 years old. Met someone, fell in love, moved to the UK, had a child, but haven’t worked in this country. I’m 51 now and am completely supported by my “boyfriend” which sounds ridiculous after 16 years, but he’s afraid of marriage, so we never did, although we’re still together. He hasn’t paid anything towards a pension for me, obviously I wouldn’t qualify for any sort of help from the government here if anything ever happened to him. Also, because I left the USA, I have lost a lifetime of Social Security benefits. Don’t have any work experience except for house cleaning and I can’t really do that anymore because I have back problems now. Will I end up living as a bum and die?

  34. Hi Sue – Have you spoken with your boyfriend about this? If not, you really need to. You probably also need to get the opinions of 2-3 people who you really trust and are close enough to your situation to give objective advice.

    It’s my understanding that you are eligible to receive both Social Security and Medicare as long as you have worked and paid into the system for at least 40 quarters (10 years). It’s cumulative, so if you haven’t reached 40 quarters, you still have time to return to the US and make it up.

    Alternatively, you should investigate the public benefits that will be available in the UK, or what you need to do now in order to become eligible. You should also begin earning and saving any money that you get. Maybe you can convert a hobby or passion into a revenue stream. Also discuss saving some money your boyfriend provides in an account in your own name. You shouldn’t be in a position where you have no money at all.

    You’re in a tough spot, so it’s time to be open and pursue any options you have. Inaction is the worst course at this point.

  35. Thanks for answering Kevin. Yes, yes and yes, I’ve talked to him about it. He just says to have faith in him and not to worry, that it’s not in his destiny to die, so I’ll be fine. In regards to the USA and the SS system, I lost my green card when I stayed out of the country for over 1 year and was told I had to be a resident to ever get it. Basically, I was very stupid for not becoming a citizen, I just never thought about it. I will try and save some money, but my goodness, I’d probably have to save at least half a million, which doesn’t seem likely. Also, even though he supports me, I don’t really have any of my own money, he just lets me use the ATM card to buy food and gas.

  36. Hi Sue – I don’t mean to pry into personal matters (but then you are asking), but on the part about your boyfriend saying “He just says to have faith in him and not to worry, that it’s not in his destiny to die” – we just lost my nephew at an early age. No one expected him to die either, and it was very sudden. The point is, none of us know what our destiny is, how it will play out, or when our number will come up. Please tell him that you need something more tangible in recognition of the many years you’ve been in a devoted relationship with him.

    At a minimum, he should name you the beneficiary of a large life insurance policy (on his life) that you will pay (with his money) with your ATM card (to make sure that it’s paid consistently).

    I don’t mean to contradict your boyfriend – obviously I don’t know him – but I put my trust in God alone. None of us are in a position to make guarantees about anything, particularly how long we will live or the provisions for our loved ones in the event of our deaths. That’s why there are insurance policies and financial assets. At 51 you should not be left in the dark about your future financial survival.

    I don’t know you, but you are reaching out for help, and I would implore you to take this matter with the utmost urgency. Time is getting short and you have no answers. As an adult in an apparently committed relationship you deserve nothing less.

  37. I agree most times the older generations are left out in the personal finance blogs. But from working in the investment industry I see many of them at age 45-60 with only 50-100k for retirement, if that. Many need to look at pushing the retirement back or not retiring completely sort of semi retire with part time work.

  38. Hi Thomas – I think that that $50-$100k that you’re seeing is a lot more typical of the average person, way more so than the million dollar babies that magazines like Money Magazine portray as the norm. This is just my opinion, but I think the greater need is to address the more typical person approaching retirement, not the best cases. The best cases may be prettier, but they’re not entirely relevant to the average person who is far more likely to enter retirement having to make compromises.

    Part of the problem is fundamental – those best prepared for retirement will be those who begin preparing early in life. But that’s also the time of maximum distraction. Along the way, there are children, divorces, job losses and financial crises. By the time a person reaches the age where retirement is on the horizon, they are already “damaged goods” from a planning perspective. I’d much rather reach out to that group. The ones with the high six and seven figure investment portfolios don’t need advice anyway!!!

  39. Just a kind word to “Ken” who wrote: “What have you been doing with your life to be over 50 and have no retirement savings? Very poor planning, I say.”

    Ken, “stuff” happens in life. I was the only child with two elderly, very elderly parents. I chose to live at home to better tend to them. I supported myself with writing and so early retired at 62. I did most anything I could do so not to put them in a nursing home.

    I refinanced twice the house so to be able to pay for proper nursing care around the clock. I eventually lost my mother, lost the house and filed Chapter 7–all in one month time. All this took its toll on my health still 4 years after the fact.

    I asked no one for help because God gave me His strength and grace–not Uncle Sam or anyone else’s uncle. The experiences I learned were many, but primary was not to judge anyone else until I walk in their moccasins.

    I also learned to be a little more compassionate.

  40. Hi Ladywiz – I’ve come to realize that sometimes people have overwhelming circumstances that prevent them from leading the “recommended” lifestyles. There’s a mindset that we can be masters of our own destinies, and while I believe we do have some control over the future, it’s far from absolute.

    As to Ken, let’s try not to be too judgemental. There are millions of people who share his outlook – I know because there was a time when that was mine too. We should consider ourselves blessed to have developed enough humility to see past that. A lot of that thinking is societal/indoctrination, and some of it comes from having avoided the kinds of hardships that would create humility in the first place.

    At this point in my life – and in my faith walk – I’d rather be dirt poor and humble, than sitting in judgement from the comfort of the ivory tower. Eventually, you do come to realize that life isn’t perfect, that people make mistakes, and there but for the Grace of God go I.

  41. I am terrified. I am 52, earn about 75K a year, and am about to get divorced and move back to Pennsylvania.

    We were in a lawsuit 15 years ago that put us in $100,000 of debt. Since that time my husband has been depressed and has been out of work more than at work. I have worked hard (sometimes 3 jobs) and went back to school at 45 to increase my income to make up the difference, pay off our house and debt.

    My husband is 64 and has no plans of going back to work. Tells me he wants to collect SS at 65 and maybe get a part-time job. We each have about $60,000 in retirement funds and we own our home worth about $350,000.00. We also owe about $30,000 in credit card debt.

    If I stay married I know he will not participate in saving for my retirement and will buy junk off the internet and play his lottery and keep spending as fast as I can bring money into the household.

    I will have to split the proceeds of the home with him and am not sure if I will be required to pay alimony. I am good with money, but I also own 2 horses, a dog and 2 cats that will be my responsibility.

    Is there any hope that I will be able to retire ever? Have thought about taking the proceeds of the house and buying something that I could flip for a fast turnaround and if I could do it a few times maybe I could get a place where I could keep my horses at home – board is expensive – about $550 a month for 2 horses. That or maybe getting a place where I can have my horses and a rental unit that would provide the income needed to pay the remaining mortgage.

    Already have a second job planned – a color consulting business, but it will take time to build and won’t ever be big money. Figure I can pull in an extra $1000 a month with this. A place for me and my horses will run at least $300 K.

    Just don’t know what to do or how to figure it out. I am sick thinking that I may need to give up my horses. I never had kids and I have had them since they were babies. Giving them up would kill me.

  42. Sounds complicated, there are a lot of human nature issues involved. I think you need to consult with an attorney, especially one in Pennsylvania, since that seems to be where you’re headed.

    For what it’s worth you’re better off than a lot of people. You have a house, some money saved and a good income, and you’re only 52. It mostly sounds like you need to set a course and follow it for the next 13 years or so.

  43. Thank you Thank you Thank you! I found a ray of Hope from You for the first times in three years…I will post my story in a few days 🙂 – 58 yo single female & College grad/ recent new empty nester who has been on temp disability for 5 years! Intact thank all of you 🙂

  44. 49 yr old married woman here, new business, no 401k, pension or property owned. Two years ago, fed up with corporate politics, I resigned a six figure income and cashed out of my feeble 401k to start my own business. I’ve got about 30k in a savings account, do not own any property and a 16 yr old heading for college in a little over a year. His tuition is covered by a plan I bought years ago. I figure saving 32k per year from here on would set my husband and I up for retirement, am I a fool? I worry every day to the point of crazy. The rut consumes my brain 24/7. I feel like the rate we are going will end up under a bridge. PS: Have about 55k in debt including a zero interest car loan. Is this really me approaching 50?

  45. By the way, our combined income is about 120k with 6k per month expenses. Do I have a prayer of ever retiring?

  46. Hi Leslie – “Is this really me approaching 50?” – that’s a question a lot of people ask themselves these days! It’s a variation on the question “What will I be when I grow up?” That question used to be restricted to kids and teenagers, now I think it follows us all our lives!

    I think you’re worrying too much, and that won’t help your dilemma one bit. You have a few things going for you, like a healthy income and relatively low expense level that leaves more room for savings. It also appears you have your son’s education covered.

    Loosely, I’d focus first on paying off the 55k in debt, even the part that’s zero interest. Debt payments consume income, and paying them off leaves you with more money to save. Pay it off out of your paychecks, and leave your savings intact – you may need that. The acceleration of debt payments will help prepare you to increase retirement contributions – and it seems that’s a weak spot in your finances. Once the debts are paid you simply redirect payments into retirement.

    With an income of 120k, I’m guessing you’re losing maybe 30k to taxes. That will leave you with 18k per year to contribute to retirement, which isn’t bad at all. I’d look for ways to lower your 72k in living expenses to free up more for retirement. The payoff of your debts will help with that.

    Plan to delay your retirement to age 70 – that will give you about 20 years to save and invest. It will also increase your Social Security benefits substantially, and lower the amount of time you will be drawing funds out of retirement savings.

    One caveat – don’t be over agressive investing in stocks. The market is looking rich at nearly 16,000 DOW, and if there’s a major slide, you won’t have a lot of time to recover the loss.

    Your business presents two opportunities. Depending on what kind of business it is, you may be able to sell it for a substantial windfall. If not, you may be able to downshift it into a side business to supplement your retirement income once you retire from full time work.

    Overall, with some planning and effort, you should do fine.

    Does that help?

  47. I am 51 no retirement saved, none. Home will be paid off in 10 yrs. Home will be worth about 150,000. Primary home. Have a new chance to start a 401 k at new job, Im a waitress. They match up to 8%, fully vested after 3 years…..,,,should I start the 401k plan now at the age of 51? Or is an IRA better? Married with 18 an 11 yr. Old sons….. oldest doesnt have college on his mind, youngest probably will….. whats the best option? Been a waitress gor 30 yrs. But first chance gor a good 401k.

  48. I can’t see what dates these were posted, but in reply to Jim who has 650,000 funds – if you can release those funds you can buy six houses which you can rent out and on which it should be possible to clear ?500 net on each house – permanently – oh and this goes up as rents rise. Use your imagination. Oh and when in 10 years the value of the houses practically double ………….. there is plenty of money around – we just need to tap into it

  49. Hi Jean – Though I’m not sure of the numbers you present, I do think that well priced small residential income properties are one of the very best ventures for a would be retiree. Not only will it provide a cash flow, but it’s laregely self-adjusting where inflation is concerned. That’s an issue most retirement planners largely ignore.

  50. This doesn’t take into account Corporate America’s mandatory retirement at 50 program.

    Unless the government is willing to set up work camps for those 40 and older who lose their jobs, everyone will have spent what meager crumbs they have managed to save since their 20s (I’ve always been miserly and never spent up to my income when I had it).

    Every article talks about boomers retiring at age 65 to free up jobs for Millennials. But what about the Boomers that are only 50. I am hardly some doddering old lady but that is how the world is certainly making me feel by insisting on calling everyone over 50 a “Senior.” I would argue that I have way more computer knowledge than the average kid that gets hired over me.

    End of rant.

  51. I don’t think you’re necessarily ranting, at least not without reason. Turning 50 these days, or even approaching it, is like the employment kiss of death. There just aren’t a whole lot of options. If the millenials think they have it tough in their 20s and early 30s, just wait until they start hitting that half century mark. It will be even worse if they haven’t established themselves in a solid career or built a firm financial base.

    I think it comes down to building skills, and/or building a business. Both will keep your options healthy for the rest of your life. It’s not the world or even the economy that’s excluding people over 50, but a system infatuated with youth – not the least of which so it can pay lower wages. That’s a dilemma that affects all age groups.

  52. 5-2014 Not sure when this thread started. Seems would be good place to offer tips and support to late start retirement savers. Wish I would have started way earlier but have to have the belief later is better than not at all. Started close to age 48 and 55 now and have almost $45,000. Will keep going at it as long as I can. I’ve turned into somewhat of a tightwad because every thing I spend money on now I take from the future sli purchases are considered carefully. Cut back on everything it helps! Once you get the ball going you think of other ways. I even check out movies from the library as it is free. I’ve opened up bank accounts because they give me money. Any unexpected money goes to savings like a little tax return etc. That money will earn some money. it will all count

  53. Hi Cherion – Pat yourself on the back for starting to save when you did. $45,000 may not seem like much money for retirement, but it’s a whole lot better than having none at all. At a minimum, it’s a solid emergency fund for retirement, and you’ll need one of those. But keep building it up and maybe postpone retirement until you turn 70. You might be amazed at how large it will get by then. Meanwhile, work on ways to have extra income in your retirement years, that way you aren’t completely dependent on your savings alone.

  54. This is the best article I’ve read on retirement. EVER. Thank you Kevin for finally writing something that truly applies and that truly matters. You’ve confirmed all that I’m doing and thinking. And YOU are the first to do this.

  55. Wow Barbara, I’m speachless! In a way your comment is a sad testimony to the times. A lot of people SHOULD be writing about this, not the least of which since it’s not at all an uncommon experience. But too much of what’s out there in the media, the financial press and even on blogs is canned/recycled feel-good crap that paints a perfect picture of life. Reality however, often takes us in a different direction, and I’m not sure people know how to cover that.

  56. Husband and I are both 51 years old and very late with taking care of personal finances. For the past few years, we have lived frugally, and now have yearly income of $75K plus benefits, and about $6000 in emergency savings. We have paid off every last penny of debt and have good credit ratings. My job is going to HSA-based health insurance in 2015 so I will have to save $5000 for that and keep it filled every year. I currently have $40K in my 401K and contribute 4% with a company match of 2%. I plan to increase this to 8% over the next few years. We give about 1% of our income to charity.
    However, we rent and do not own a home. We also expect to help our two children (aged 18 and 15) through college, giving each at least $5000 a year for four years. (Totalling $40000 over the next 7 years).
    I plan to work until age 70. I will get a tiny ($100 a month) pension from a past part time job, social security of about $2000, and the rest has to come from what I save in the 401K.
    I want to buy a modest home soon, with a 15 year mortgage, and I am a first time homebuyer so should be able to do it with $5000 or so down.
    Any advice?

  57. Hi Irene – It sounds like you’re on the right track. You don’t mention what your husband is doing in the cause of financial security – is it over and above what you’re doing, or are you including that?

    One thing I would be on the lookout for, more because you are both over 50, is the potential for over-consumption. That owes to the twin financial burdens of paying for your kids in college and buying a house, especially one with a minimum down payment. You could be entering a period of high consumption that will compete heavily with your retirement planning. I’m not saying that will be a problem, only that the dominos could be lining up that way. Buying a house creates unexpected expenses, and actually, so does college. (BTW, excellent job keeping a lid on college costs – I’m presuming they’ll be attending community colleges?)

    Two questions: 1) Can you get the kids to help pay for college, and 2) why are you planning to buy a house, especially since you’ll soon be empty nesters?

    This is just my opinion, but if you’re going to buy a house with a minimum down payment, that’s not a whole lot different from renting. It’s risky in todays economy, even if the bank says you’re qualified for the loan.

  58. Thanks for the quick response. My oldest is enrolling in a bachelors degree program where she does 2 years at Community College (costs about $5000 a year), then 2 years at a State University ($15,000 a year last time I checked). Yes, she will have to get a job and/or financial aid for the last two years, but I am going to encourage her to never take more than $10,000 in student loans. My youngest really dislikes school and may and up doing a job-oriented community college associates for auto repair, computer help desk, culinary, etc. so I don’t foresee big expenses for him.

    My husband has been disabled for 3 years and is a stay-at-home-dad for now, but wants to start a photography business, and I don’t include that in our financial planning. Any extra money he makes will be put into a vacation and travel fund for us.

    We want our own home so that we don’t have to pay rent forever. I know we will need an emergency fund ($10K is what I plan to have)to cover all of the usual home repair, and that we’ll have to pay annual taxes on it. Do you think that waiting until we have a full 20% down makes it better than renting?

  59. Wow, you’re really well planned out. I completely agree on the $10,000 student loan limit. That’s basically a modest car loan in size, and far more reasonable that the norm. I get what you’re saying on the owning part. If you can put 20% down and use a 15 year loan, you’ll be mortgage-free by the time you retire. That’s a huge advantage, but just make sure that you buy beneath your means, not above it, so you’ll always have room in your budget.

    My reason for challenging you on the $5,000 down payment is that we’re really living in a time when you have to minimize debt. It’s a completely different economy than it was 10-15 years ago. You’re heading in the right direction across the board, and I’d hate to see you and your family ending up being “underwater” on your house when the next recession hits. I know that people have played the minimum down game for decades, but this isn’t a minimum down housing market, not any more. I hope you don’t take offense…

  60. Thanks for the encouragement. I definitely plan to wait until 70 which will give me about $1,500 (as current projection). Paying off debt to reduce monthly expenses. Squirreling away as much as I can and earning some interest on CD’s (don’t really want to do the stock market).Even since my first writing I have increased to nearly $48,000. What I suggest to some is get an extra job somewhere and designate that money for retirement savings. I work on Saturday’s even though I would prefer not to so my motivation is putting that money into retirement. Just get creative to where you can save. Cut back phone bill. Starting somewhere helps.

  61. Hi Cherion – Your advice is solid. I like the idea of creating a dedicated income stream to fund your retirement. That should build up the money quickly, as you’ve confirmed by the $3,000 increase in your savings in just a few months. I’ve actually written on creating dedicated income streams to payoff debt and to pay for health insurance, but the retirement connection is brilliant (thank you).

    The good thing about using a part-time job for this purpose is that you can change the job from time to time to avoid boredom. You can also take time off every now and again so you don’t burn out.

    It’s a perfectly rational and responsible strategy to fast-forward savings, contrasted to a world where people only seem interested in easy solutions.

  62. Hi, My age is 60, and I just retired, I have 650,000 dollars in my pension account, since I am retired, there is not going to be any more contributions to the plan however I am not planning to take any pension payments yet, well at-least for 5 years. Please can anyone explain to me how much will my pension plan be worth after 5 years.

    Thank you

  63. There’s actually no way to know that since you haven’t indicated what you’re invested in, and there’d be no way to predict that since the financial markets are unpredictable. But I do think it’s an excellent idea to delay withdrawals at least until you turn 65. Maybe you can plan to continue working as long as you are able, then hold the retirement plan until it becomes more necessary. Either way, you have planned and done well in getting ready for retirement.

  64. Wouldn’t a side business run up a persons debt?
    I have many ideas for a startup, but all would involve an investment.
    I am currently debt free. I have never liked living high on the hog.
    It makes me feel very uncomfortable.

  65. It really depends on the kind of side business. With the internet, there are a lot of businesses that require little or no upfront capital. I personally prefer business ideas that are talent driven, rather than capital driven. In my thinking you need to be a business, not buy a business. That’s more than possible these days. What kind of businesses are you considering, and is there a way to at least start one without expending the capital upfront? Maybe if you can establish a cash flow first (very important!!!) you can use the cash flow to invest in/expand the business without going into debt. Maybe at first you lease equipment (or buy it used) and sub out certain services until the cash flow is solid and predictable?

  66. What happens when you did all the right things and then you or your spouse gets into a horrific accident- the medical bills mount and become overwhelming- the bank takes the house- the corporation finds a way to put you on disability and the liens against your home become impossible- they have to be settled- the house is gone- the savings are gone-then a few years later while working 10 hour days and reinventing myself with two children and a brain damaged husband- I divorce my husband- not because he is damaged but because right before he was in the accident he asked me for a divorce-I wanted to honor it and also as a now single parent, I could try and find the best deal to get my children into universities-

    I managed to get what seemed affordable and they received a lot of help with grants and scholarships (partial) the business I started on 1000 dollars was doing well- meaning, it paid the bills on everything, including the rented home. My husband (ex) who lived with me became rehabilitated and became more and more involved in my business- in fact I developed multiple sclerosis that went un diagnosed and he took over the business- shutting me out in essence- the business did so badly in the recession- I am working for him now, as I was recovering for years- he controls everything. I have some options but most of the money I get goes to pay off my now graduated children’s education- That is important to me as I feel education is child’s right and my responsibility. That’s all I have now-

    Eight years on, I have paid off one of my child’s university education and because of continuous deferment and buying time one has accumulated and doubled, so in all, I owe about 70,000 plus. My MS has stabilized for now and I manage to work long days and not sure what to do.Their father cannot help- the recession changed everything as the business would have/ was supposed to pay off the education easily and when it (the economy) crashed it meant that whole idea had to be revised. The small business is paying off all that debt at 200 a month nd supporting my brain damaged ex and myself- Though it is a continual trial in self denial- I basically work to pay the rent on the place I live in and food-I like healthy food and my health insurance-
    I have thought about what I can do or who would want to employ me in a live in situation-However, that is a fragile thing at best- I am on the verge of homelessness and do not want to walk away from my business as I feel already that due to my illness, it was taken over.
    I read about people who wonder what to do with having 500,000 or a million and I wonder what to do with nothing- no assets- everything is gone- Thanks for reading.

  67. Hi Anjela – I’m very sorry to hear of your predicament. My understanding is that there is a provision under the bankruptcy code that would allow you to discharge the student loan debt for a hardship. I don’t know how hardship is defined for this purpose, but you and your husband sound like a true hardship. It might at least be worth talking to a bankruptcy attorney about that possibility. That won’t solve all of your problems, but it will at least get the debt out from over your head.

    As far as retirement, if you’re close to that age, you may have to accept that retirement may not be in your future. Semi-retirement may be the only option, which would involve collecting Social Security as soon as you’re able, and to supplement that with your business or what ever you could do to earn some money.

    In the end, it isn’t necessarily about retirement, but about living a good life, how ever that plays out. I’d recommend developing a consistent walk with God if you haven’t already. In my own life, I’ve been in too many circumstances where I couldn’t carry the load myself, but somehow the load was carried. It’s happened too many times to be a coincidence, and in most cases, the outcome was nothing like what I expected or worked toward, but things worked out, often better than I expected.

    When it comes to retirement, our expectations are often our worst enemy. We expect the TV version of retirement, when simply living a good life will provide us with everything we need.

    I realize that that isn’t a satisfactory answer, but a lot of people won’t actually ever be able to fully retire, maybe the majority of people. My grandparents never fully retired, but they still lived fulfilling lives right to the end. They came from the generation that accepted (and welcomed) work as a lifelong pursuit. I have no suggestions in regard to your illness and that is a real X factor. But I’m sure you already know that better than anyone.

    Are there any trusted people in your life who you can talk to and see about working out at least some of your obstacles?

  68. I would like to know if a 401 started after the age of 51 is a good idea (company matches ) or should I start a Roth IRA???
    I am married…..husband doesn’t have retirement either…..between us we make about 55,000 per year. I work part time but can increase hours…2 kids 19 and 12….no college yet….and nothing saved for college….I hear Susi Ormond say fund retirement before funding kids college….if I have to pick one. Thx in advance.

  69. Hi Glenda – You’ll hear different opinions, but I’d recommend signing up for the 401k plan at work – at least up to the maximum they’ll match. For example, if they’ll do a 50% match up to a 6% contribution (you contribute 6%, company matches with 3%), then I’d contribute 6%. The match is essentially free money (as long as you stay around long enough to be vested), so I’d go for it.

    But if you chose to do a Roth IRA instead that isn’t a bad option either. At your income level the tax break on 401k contributions will be minimal, and the Roth gives you the advantage of allowing you to withdraw your contributions without taxes or penalties. You may need to do just that if your children attend college. Please consider your immediate financial needs before going with either the 401k or the Roth IRA – I don’t know the specifics of your situation.

    As to college for your kids, I’d disregard Suze Orman’s advice on putting retirement before college. That’s general advice, but your situation is different because your kids are now at or close to college. But I’d go the least expensive route possible. Let them go to a local community college for at least the first two years, live at home and work to contribute to the cost. Please avoid the temptation to finance their educations with student loans!!! They make it so easy to get into debt, but virtually impossible to get out of. This is especially important because you and your husband are over 50 and don’t have retirement savings. And you certainly don’t want to leave your children with large student loan obligations so early in life.

    People sometimes think “sky’s the limit” when it comes to college for their kids, but it’s a dangerous delusion for middle income families. Please don’t fall for the hype.

    Also, please seek the opinions of people who know more about your finances. I don’t know you, and my advice is 100% theory. Thanks!

  70. I love this article. Some of you have written about owning your home; you may want to consider a HECM (FHA guaranteed reverse mortgage). You can qualify as early as age 62 (use the youngest age if two owners) and get a credit line with no monthly mortgage payment. Little known fact; the longer you hold out on using the credit line the larger it gets. Also the house and equity in the house is always yours.

    If you currently have a mortgage and owe less than 55% of the house value you may be able to refinance your loan to a HECM (reverse mortgage) and never have a principle and interest payment again. You will need to pay taxes and insurance annually ? factor this into your budget. You may want to consider downsizing to match the insurance and tax payments to your retirement budget and then use a HECM to buy your new house (no monthly payment for principle and interest).

    People (and sometimes their financial advisors) who talk about home equity lines (HELOCs) for retirement don?t talk about having to make a monthly payment when you use them and the fact any bank can call the loan at their discretion. That means it can go away at any time: HECMs are guaranteed and cannot be called.

    Using a HECM is a great way to retire in place. I am only 52 now; however, even with a pretty solid retirement portfolio I will be using one to supplement my retirement over time.

    I do mortgages for a living (and not reverse mortgages). It is amazing to me to see the misinformation about these products. Keep a HECM in mind for retirement planning.

  71. Hi Todd – Thank you for weighing in, but I cannot endorse what you’re saying. I’ve written about it here: Reverse Mortgages ? If You Need One It?s Probably Time to Sell. Reverse mortgages are about stripping the home of long-term equity for short-term survival. I don’t care how anyone sugar coats reverse mortgages, or even that they’re a government program, if you have to borrow against your house to keep it, then you’re a train wreck waiting to happen.

    What happens when the equity is all gone? The interest will accumulate until the loan is greater than the property value – but you still need money to keep the house? You won’t even be able to sell it because of the negative equity situation. Your heirs will be left with a mess to clean up after you die. That negative equity situation will happen faster than you think if you start drawing out the equity at 62 or 65. With people living well into their 80s, a reverse mortgage is setting people up to fail.

    If you even need to consider taking a reverse mortgage it’s seriously time to sell the house. That’s the cleanest long-term solution. When we’re talking about retirement planning – especially when it’s in regard to people with limited retirement assets – the goal should be to get out of debt. That’s not at all what a reverse mortgage does. A reverse mortgage enables someone to temporarily keep an asset that they need to get rid of. The “keeping grandma in her home” rhetoric is a pure play on emotions, not financial logic.

  72. Hi, I am 50 and my husband is 53. He is retired military so he gets a pension of $3000 per month for as long as he lives. He works at a civilian job now and makes about 75,000. He has a small 401k that he contributes a small amount to and his employer matches it. I work a small part time job and make about $15,000. We have a 16 year child. Due to a long illness We have only a small savings of about $10,000 and debt of about 30,000 plus our mortgage. Our home is worth about $300,000 but we still owe about 240,000. We weren’t very worried about saving a ton for retirement because we had my husband’s pension and social security for both of us. However, we recently found out we had made a huge irreversible error in his survivor benefit plan. He checked the wrong box on the military form and i signed off on it so if he dies i get nothing from his military pension. We were devastated when we realized what had happened. We immediately took out a life insurance policy on him so if something happened to him, i would have something. But that policy is only until he turns 70. We pay $400 per month for $500,000 coverage. If he dies before me and after age 70 all i will have is my social security. Any advice on what we should do or how much we need to save to help my retirement should i outlive him after age 70 would be most appreciated. I am so worried about all of this and he is heartsick thinking he had provided for me only to realize through a simple mistake i will have nothing. Thank you !

  73. Hi Lisa – Wow that is unfortunate. I don’t know much about military pensions, but it might be worth contacting the Veterans Administration to see if they can help rectify the pension situation. Perhaps they have an advocate who can help you in this area. If that doesn’t work, write a letter to your congress person, and see what they can do to correct it.

    Failing that, I’d make a concerted effort to improve the state of your finances. Based my calculations, you make $126,000 per year from all sources – your husbands $75,000 salary, your $15,000 salary, and $36,000 from his pension ($3,000 x 12 months). That’s about 2.5 times the national household median income. Max out his 401k contributions. Also concentrate on paying off the $30,000 in non-housing debt. And work out a plan to payoff your mortgage before your husband turns 70.

    In the event that you lose both the pension and the life insurance policy upon your husband’s death, your improved financial condition will make it easier for you to survive. Also, if your husband does die after 70, plan to sell the house to raise more capital. As a widow, you’ll need the money more than you’ll need the house. This is also why it’s so important to payoff your mortgage.

    If you handle this right, you should be fine, even if the pension situation can’t be corrected.

  74. Thank you so much for your reply. Can I ask your opinion about taking out a whole life insurance policynto cover me if something were to happen to my husband after age 70 and the term life has expired? Does this sound like a safe back up? We both plan to continue working and after my daughter goes to college i will work full time. We also are going to work on paying off all debt and our mortgage. Luckily college is already paid for. Thanks again for your help!

  75. Great post and comments. I’m a 57 year old minister/missionary who has neglected his finances through the years. Dumb, dumb, dumb. We’ve lived paycheck to paycheck. I have saved little and have no retirement program. I have 58K (kids student loans, credit cards) in debt and owe 140K on my house(which we use as rental property). My house is worth 315K in a very desirable city and neighborhood. My wife is not currently working. I’m very healthy and plan on ministering till I drop (Lord willing). We’re way, way behind and know we have to do something about it now. Good thing is, I just got a nice raise and can afford to sock away at least $1,100 monthly in savings/investments. We’re downsizing in every area and we’re done with incurring any more debt. I’m considering two scenarios:

    1. Sell the house–pay off all debt, leaving me with 117K. put 62K in conservative growth funds–40K down on modest house (10 yr fixed loan), 15K emergency fund. That scenario will allow my wife and I to max out Roth IRA’s ($6500 each, annually).

    2. Keep the house as rental property (currently bringing 2,000 per month–mortgage pymt is 1,800). Refi the loan, dump 58K debt in it, totalling 198K (10 years fixed). Payment should be around $2280. I can increase the rental amount. Avg. in neighborhood is $2200. Problem I see here is no lump sum to begin investing. Upside is, it leaves us with a nice house that will provide a nice monthly check (all things being equal) throughout our later years.

    Any thoughts? Or additional scenarios?



  76. Hi Stone – These are just opinions – you’re thinking in the right direction. If if was me, I’d sell the house. It’s your primary asset, but it’s all in one investment. Should house prices drop, you’ll lose equity. In the meantime, you’re not making much income on it. So I guess what I’m saying is that I lean toward scenario #1. It not only allows you to diversify your assets, but it also enables you to get liquid, and that’s so underrated, especially if you don’t have a large retirement plan heading into retirement.


    See why at end of my petition, in my Why is this important, section at:


    People are getting official forecasts as low as ?38 per week with no tops after 45 years work.

    The opt out from SERPs began on 6 April 1978, and your employer could contract you out from SERPs from the same date.

    You need 35 years National Insurance record and 35 years of SERPs (that became the State Second Pension from 2002) to get the full basic state pension under the flat rate.

    There is no single tier pension, as people will be getting different amounts to each other for decades to come.

    Pension Credit (savings) and SERPs are abolished for new claimants from 2016.

    Pension Credit – guarantee credit – becomes more complex conditional from 2016, even eventually for the over 75s.

    Universal Credit when rolled out nationally, denies Pension Credit if either of a couple are below the raised retirement age.


    Share my petition to inform people in good time before next year’s retirement age, who are older than the women denied state pension payout at 60 from 2013, til 66, which is retiring on and from 2019-2020 onwards.


  78. Michelle, I know you believe that you can wait to start really putting money away once your kids are through college and moved out… well let me tell you from experience that is not usually the case. You there are these wonderful events that keep happening, engagements, weddings, grandchildren and even keeping things modest is costly. This doesn’t even take into account if you have nieces and nephews of a similar age you’ll need to budget for them too. So please, hope for the best but do try to put away a little more now. Also, health issues sometimes prevent us from working as long as we would have liked, so some rainy day saving is always in order. Best of luck!

  79. What if you’ve already tried all of the above? What if you have not a dime to your name? No bank account, no income? I’m 61 years old, worked over 45 years of my life. No pension. Held only 5 jobs in that amount of time. Health issues and have looked for a job in town for over 3 years. I have no vehicle and live with a friend. No health insurance. What do you do then?
    Just curious

  80. Hi Molly – The answer isn’t pretty – try everything that didn’t work a second time – and a third time if necessary. This is your life, so never give up. They say you can’t win ’em all, but it’s equally true that you can’t lose ’em all either. Have you tried career counseling? You may need to do some brainstorming to help you identify both personal strengths and strategies to apply them. Have you tried looking into some work-at-home jobs? May not be the best pay, but it will buy you some time and earn you some money so you can buy a car then expand your job search.

  81. Hi Kevin. Thanks for the article. I am 48, earn about 85,000 a year between a full-time and a part-time job. I have the potential to earn a little more but do not want to work upwards of 55 hours a week (50 is OK but anymore and I start to feel miserable regarding my quality of life). Anyway, I have less than I would like for retirement — about $75,000 in a 401k and $80,000 in a traditional IRA — so around 155k. I also have an emergency fund of 55k in cash and a full paid off cooperative apartment with very low monthly expenses. I am also having my partner move in who will be paying me “rent” which will wash out my living expenses to zero. I am now trying to catch up with doing the max to my 401k and max to my IRA and plan to do so every year until my retirement (age 65 hopefully). I’d like to know if you think this is somewhat on track. I spent many years in my 20’s not saving other than paying off my mortgage and buying expensive furnishings/art/collectible and world traveling. I still take 2 trips a year because if I don’t, I’ll become depressed with working so hard. Beyond that, I have no problem saving the max to my 401k and IRA from this point on so I hope my assets of 155k for retirement, my paid off house and my emergency fund gives me a fighting chance to have a decent retirement. Do you recommend saving even more money than the $18,000 401k/$5,500 I am now doing. Of course I intend to do $24,000 and $6,500 when I hit 50 in 2 years. Thanks so much for your thoughts.

  82. Hi Dan – You’re right on track so I have nothing to suggest. And congratulations to you for asking for advice, even though you really don’t need any – self-examination is a positive trait and an indication of humility. You have about $210,000 in savings and investments at age 48, and you have 19 years (your age of full retirement per the SSA is 67) to build your nest egg even larger. But please don’t beat yourself up for past financial sins, or for wanting to take a couple of trips each year. You work hard (two jobs), you save your money, and you generally live your life close to the ground. You deserve to enjoy the fruits of your labor. None of us know how much time we have in this life, so you have to enjoy the present even as you prepare for the future. You’re on the right track on all fronts from what I can see!

  83. I am 48 years old and as my 40th present to myself I got a living life insurance / retirement policy where you are given the interest only and NOT the principle – which keeps holding as the years go by until you die. I also will have a 30 year state government teaching pension. I do NOT own a home (I rent), I’m single with no children and I have a 10 year student loan bill at $450 / mo. which I manage just fine .

    I found I did BETTER with my retirement when I stopped looking at all the articles that say I need a gazillion dollars – no … you don’t. And reading those articles was as depressing as watching Suzie Orman say “Don’t live life until you have six months living FULLY PAID under your belt …” Okayyyy.

    Anyways, every 6 months I RAISE my retirement contribution by $10 / month … and I want to do that indefinitely … and you know what, Kevin? I don’t even feel it coming out of my paycheck … I started that a couple years ago after I got divorced – and it’s been awesome. In fact, I am better off finically NOW than I ever was married because I have full control of my income. I’m at $180 / mo. now. I also have nearly 10k saved to replace my vehicle when this one dies .. and I keep 1k emergency cash at all times – and it’s saved me HUGELY.

    This article was really neat to read – and like I said … I’m not blind to numbers … but I just found it easier for ME to get my butt in gear if I just started saving something vs. sitting around being depressed at all the math.

  84. Hi Mai – You’re hitting on one of my “hot button” issues with articles that say that you need a gazillion dollars to retire. It’s nice to set goals, but that’s a goal that statistically few people will reach (probable less than 10% will retire as millionaires). That thinking is wrong on so many fronts. For one it makes it seem as if you can’t be happy unless you’re a millionaire, which is total nonsense. Number two, it makes it seem as if retiring to the beach to play golf should be everyone’s ultimate goal in life. And three, it makes a mockery of people’s ability to continue to earn a living, even in old age (something more people are needing to do these days).

    You have to do the best that YOU can do, and never compare yourself to third party sources, some of whom might profit from more people making a lifestyle out of pursuing millionaire status. I know dozens of people who retired with little money, and somehow they’re doing just fine.

    You’re doing well with what you have available, and that’s all you can do – so congratulate yourself. The real goal should be to live a worthwhile live, to enjoy yourself, to find your life’s purpose, and to put some money aside along the way. You’re doing just that, so just keep it up.

  85. Wow! This column gives me hope. My wife and I are in our mid fifies and have always lived paycheck to paycheck. We currently make about 120K annually together but it has only been at that peak for the past couple of years. We have a mortage (17 more years), 2 car payments and a kid in college (3 more years). My wife currently has a very good job with 401K match. We have only saved about 60K for retirement and currently I am have retirement program at work. But…I recently took on a part-time job score-keeping minor league baseball games. I love baseball so this is right in my wheelhouse and does not feel like work. So after reading this blog, my plan is to deposit the income from the baseball job directly to my IRA. Only doing about 6 games a month generates only about $150 (net) per month but it’s a start. During the offseason, I plan to sell baseball memorabilia on eBay which I’ve done in the recent past and save the proceeds to the IRA. Feeling much better about semi-retirment now, thank you! Question: Better to pay extra on the mortgage or save to IRA? Or mix of both?

  86. Hi Patrick – Thanks for sharing your story, it also gives hope to millions of people who are in similar situations. I think you’re making good progress now, and as the saying goes, “better late than never”. I don’t know if you’ve considered this, but your passion for baseball could be that all-important post-retirement career to supplement your income. Since you’ll be doing something you like, it won’t be a drag on your life. Between your wife’s pension, and Social Security for both of you – plus you’re baseball income – you could be quite comfortable. The retirement savings may function more as a large emergency fund than as an income source, and that’s OK too. If there is one thing I’d suggest it’s that you get out of debt. Debt won’t serve you well on a limited income, and by paying it off, you’ll improve your situation more than if you save and invest more money.

  87. This is a great column, as I’m one of those people concerned I’ll end up working till I fall over, and hopefully not at the same job I’m in. Trying to embrace the moment, but tend to drift off to what I’ll need to retire at the age of 65.


    I’m 45 and married with 3 children (17yr old and two 1yr olds). Children’s age gap is due to first wife passing away 8 years ago. My 17 year old’s college is payed off and have about $500k in IRA/Savings. My mortgage is also payed off. Plan on downsizing when I have an empty nest. My primary expenses are childcare for my two little ones and eventually college. I don’t live pay check to pay check, so there’s some room for add’l savings.


    Would like to work by choice when I’m 65. I’m thinking about preparing for a second revenue stream that I can lean on when I’m 65 for semi-retirement. I considered looking for a new job that has a pension (if that makes sense to cover health insurance and provide add’l earnings). Open to comments and suggestions, and whether or not hunting for a new job with a pension makes sense and/or if my current savings is enough to buy me 10-15 years cost of living post retirement income (age 65).



  88. Hi Glen – I don’t think you need any advice at all, you’re on track with what you want to do. You have $500k at 45 and 20 years left to save more. Your house is paid for, and you’re planning on a second career. The only variable in your circumstances is the two one-year olds, as you will need to provide for them right up until your (semi) retirement. You’ll have to “play deep safety” on that though because there are so many variables when it comes to raising kids these days. But you’re in excellent shape.

  89. I’m 53, divorced. I own my home. No mortgage, worth maybe $200,000. approximately 55k in an Ira and 95k in savings. My alimony ends in 6 years. I own my car and pay my credit cards off monthly. I’m terrified of being in my sixties. I know this is not enough to retire. Please advise what else I could doing.

  90. Nothing scientific here – you have about $150k in savings/ira, so just keep building that up. If you’re healthy, delay retiring until age 70, that way you’ll give yourself 17 years to save more money, AND you’ll max out your Social Security benefit. You don’t have any debt so you should be in good shape. You don’t indicate if you have a job/business or if you are living on alimony alone, but I’d start working on a career or business that you can work at when you’re in your 60s, that way you’ll have additional income if it’s needed. You may also want to discuss your investments with a financial adviser who is familiar with your financial situation. You should work to develop an investment mix that will provide healthy returns without adding unnecessary risk.

  91. Here’s my plan: Homelessness. Now I’m free to do whatever I want. Sorry for not adhering to the systems program. Once I’ve reached my goal I’ll let you know how it’s going… if I can still find free wifi.

    The punchline of all this modern financial management advice is that the stock market will realize ever increasing perpetual gains until the DOW hits 50K in a decade. Sorry, the jokes not funny. What an unnatural economy we live in where the Wizards of Wall St. and legislators will insure gains despite grossly over valued companies. All the talk of stopping trading at a 7% drop should be a clear sign that this economy is anything but natural. It’s fragile as hell and too many are “all in” thanks to their stellar financial “service” teams. “Less government”! “Less Regulation”!… Well, unless it’s to protect me and mine right?

    All hail perpetual Wall St. gains!!! Even when no companies are left to trade because no consumer can afford their increasingly cheap garbage. Market needs more than a correction. It needs a realistic, full blown reset.

    Buy into the system immediately kids. It’s the only way you’ll live. Take out your student loans, get a mortgage, finance every car you drive… the path to happiness. All those without 401K’s or a Roth IRA will perish. So sayeth your Wall St. Gods and their minion banksters.

  92. Hi Philip – Your comment reads like it’s tongue-in-cheek, but I certainly appreciate the implications. There’s a lot of smoke and mirrors in regard to retirement planning, and if you’ve read any of my other posts on the topic on this site, you’ll see where I’m coming from. But it’s important that we don’t throw the baby out with the bath water either. We should do what we can to save and invest for the future, but not with the idea that we’re going to have an ironclad retirement to the beach. Real life seldom supports optimistic theory.

    But getting to your deeper meaning, or what I interpret it to be, we all need to have retirement income provisions beyond an investment portfolio. I completely agree that much of the rise in stocks in recent years has been a mirage, so we need to be prepared for a major blow back at any time. That means having job or business skills that we can carry into old age, passive income streams, low-cost living alternatives, and lifestyles in which we can find happiness apart from being a prosperous retiree.

    Some would call such planning “doom and gloom”. I call it diversification.

  93. I am a 58-year old female, single, no children. I do not own a home, I rent. I have a 401k program where I work, but due to the high cost of living expenses, I am only able to contribute 3% of my check every payday. As a result of this, and extremely poor planning all my life, I currently have less than $10k in my retirement account. I am frantic over this, worrying day and night. There is no one that can help me in any way. I don’t know what else I can do. Any advice would be so much appreciated.

  94. Hi Sandy – First of all, I don’t think that you’re situation is at all unusual. I’d resolve to do what I’ve always done – work, live beneath my means, save some money, and stay out of debt. If you don’t think you will be able to continue your current job into the retirement years, you might work on finding something that you can do instead (when that time comes).

    Social Security plus an earned income can keep you comfortable for a long time, probably longer than you think. The good news is that there is more work than ever that can be done that isn’t physically taxing, which is the main reason workers have needed to retire throughout history. Find something like that, something that you like doing, and you may not need to worry about retirement.

  95. Hi Rick – I don’t know what your situation is, but you might try going to the website GoFundMe.com and see if you can raise money there. I’m not familiar with how it works, but I’ve heard some heartwarming stories about it. In fact, I think I’m going to write a post about it in the near future. It sounds like a site that can help a lot of people.

  96. We had a huge loss in our stocks for retirement and I lost my job at 56 years of age due to “Downsizing”. We too had a child in college. We brought him home, told him he needed to find another alternative to finishing, we sold everything and gave the rest away and moved to Ecuador. We pay $300.00 for our rented house, we are in the Andes Mountains, close to the Middle of the World. We don’t need heat or air conditioning, our water is 20.00 our gas(propane) is 2.50 every 3 months, our food is $250.00 we pay 45 cents to ride the bus to Quito for a large city view. We have learned Spanish, and the health care is great, along with the dental. We just pay for our glasses without paying 116.00 a month for a family plan. Our son joined the reserves and is continuing schooling and serving the Air Force. He was upset at first, but we knew there were alternatives to us paying for his college. We didn’t want to work until we were 70 to afford to retire, if we made it. We travel, we relax, we volunteer and still get to come home and visit twice a year. We needed to think outside the box. We did and it worked for us, we have been here two years.

  97. Hi Denise – I’m really impressed. That’s serious out-of-the-box thinking. You’ve changed your parameters completely and given yourselves a fighting chance. Congratulations! I have no advice to offer, since you’re way ahead of me!

  98. I don?t get a 401k or any program from work so i set up my own tradtional IRA. I’m 49 and just started investing 5500 a year since 2014. I’m confused on conservative investment. Fidelity says I should invest in a high risk investment to catch up. What should I do? Which plan should I pick.

  99. Hi Amanda – That’s a tough question, since I don’t know you or anything about your risk tolerance. Fidelity is likely recommending high risk because it usually comes with high returns. At 49, they’re likely thinking you have to make up for lost time. However you’re going to have to decide for yourself if you’re comfortable with high risk – not everyone is. You can earn higher returns, but there can be years when your investments are down.

    As far as conservative investments, lean toward interest or dividend bearing investments, and stock in better established companies or in real estate investment trusts. Portfolio allocation is also important. You can have some money in high risk/high reward stocks, but offset that with large positions in fixed income assets (which pay very little right now, but are safer). There are no guarantees when it comes to investing, so you’re going to have to do some serious soul searching here to determine what you’re comfortable with.

  100. I was injured on the job in 1999. Three lumbar surgeries later I found myself on SSI/disability with two kids to raise and a wife with a mental illness. Fast forward to 2009. I am now divorced, one of my children is grown and out of the house however, I still have the youngest to raise & support. Also, being the only child I must help my father who is stricken with cancer. In 2012 I started taking classes at my local community college with hopes of starting a new career in IT. My father passed in 2013, my youngest child turned 18 in 2015 leaving me without her stipend. I just found out SSI won’t allow me to save more than $2000.00 without affecting my benefits. I am really concerned due to my age & disability whether anyone will hire me at a decent salary. I am afraid that even if I can find work and save some money, I am missing 15 + years of paying in to social security. Therefore, the future really looks dismal to me at this point because it seems all doors are closed unless I hit the lottery. Any advice would be appreciated.

  101. Hi John – It’s tough to give advice because you indicate a disability but don’t say what it is, nor do you provide your age. As far as Social Security, your benefits are calculated based on your ten highest earning years – if I understand it correctly – so your benefit shouldn’t be affected by the fact that you haven’t paid in for 15 years. If you are close to age 62, you could file for Social Security, then work where ever you can and can make up to $15,000+ without having your Social Security benefits reduced.

    It’s tough to give anyone advice when they’re on disability however, because any income you earn could jeopardize your benefit. Unless you can earn more than the benefit, you may not want to work at all. Maybe you should talk with a disability attorney and get some direction? You’re obviously in a very tight spot.

  102. Hi Kevin, I’m 50, have worked in a sales career for years. Have an MBA from a top school. I have a $500k home paid off, a $200k ira and $200k in cash stocks and bonds. My concern is age discrimination in the corp world as I get older. Im in good health and would like to work until I drop. I started a side business which is growing and it’s part time. I’m dating a profession young lady who makes a strong income. She has one child and we’re discussing having another. She’s 12 years younger than me. What are your recommendations for our situation? Even though it’s not dire, I still feel pressure relative to retiring safely and securely.

  103. Hi Jake – From the sound of it, you’re doing just fine, and you don’t need any advice! If I were to give any it would be to tell you to keep doing what you’re doing. Age discrimination IS a factor, and one that’s largely ignored. Good on you for considering it. You’ll probably avoid the worst of it if you stay on the job you have, but the side business is probably your best insurance against it.

    Since you will have children who will be financially dependent on you at least through your 60s, you will probably have to consider working well past age 65. Kids bring major costs that probably won’t be covered by retirement income alone. Again, your side business looks promising in that regard. You can keep it as you get older and use the income to help raise your family. It also helps that your significant other is a good deal younger, and well-employed. Given your age, she might want to steer clear of the stay-at-home mom strategy. It may be that she’s the working spouse and you’re the stay-at-home dad!

    But keep saving and investing money, since you can’t rule out the possibility of a forced retirement due to health issues. It happens as we get older. And for that reason, you should give equal concern to maintaining optimal health. But I think you’re on the right track, and you’ve probably already considered all that I’ve written here.

  104. Kevin thanks for answering- I should have said when I arried I had a great career prior to multiple sclerosis and even after did proof reading and editing and then started a business and my husband had all kinds of pension plans and 401 k etc etc and no one could have seen what was to come – one word of warning as I was a very naive human is if your spouse has been married twice before and has responsibilities then when a catastrophe happens- and the house is taken- those responsibilities have to be taken care of before the current wife can survive- the series of events were
    husband crashed car- huge accident brain damaged-
    corporation took over payments on home as they didnt pay his salary- it was a small corporation- they gave us 15000 and he was put on disability- they hadn’t paid interior insurance for a year to cut his costs after the accident- storm hits in 1992 and destroys EVERYTHING in the home- no internal insurance- house is taken- all the liens from massive brain injury need to be have to be paid off prior to bank sale- his plans and his savings of over 500000 are gone in a puff- his home that had hundreds of thousands invested- gone in a puff- we took a rental and in the end after the previous wives- children were taken care of as no further income would be coming in (as at the time he didn’t even recognize any of us) so I got help from social services and gradually managed to begin a business- though it generated very little for a long time- 20 years later there is no savings as it has all been a struggle to JUST survive- because I was married for 10 years I received spousal social security- that was a blessing (not the marriage lol the social security) I don’t know what to do- I work 10 hour days to just survive-I came from a wealthy family and the irony of this hard working poverty is overwhelming at times-I basically work to pay rent in a safe place but after the bills are paid thee is nothing over for even a lipstick-I have nothing- I am on a hamster wheel-if I stop I will fall off- I ‘pray’ my ms does stay in remission- I have medicare and without it not sure what I’d do as I stopped my private medical insurance Thanks for reading….

  105. Hi Angela – Have you considered an apartment sharing situation? It could cut your housing expense in half, and maybe give you a fighting chance. I’m not saying it’s a perfect situation, but you’re in a tough place that may require radical action. Also, please be thankful for your Social Security, Medicare and the work that you can do. These are all blessings. I also think you should look to get into some sort of support group. No one can handle perpetual struggle alone. And in a group, you may even find people who you can team up with to deal with various problems.

  106. The government, the Federal Reserve and several other things in our fine country have done a complete and perfect job at making sure anyone who works hard their entire life works until they die and then only leaves the family enough to bury them if that much. Only those who are born into money can retire. For the rest of us we have a choice. Shut up, work till we die or make sure we have really good life insurance and then accidently cross the center line hitting a semi head-on doing 100 mph. That’s the only choices I see after working 31 years. Thanks Uncle Sam. Retirement for the middle class honest working folk is a bald face lie. Good luck young people.

  107. Hi Craig – I often think that we’re reverting back to the way things were before World War II, when the working class basically worked until the died. I’m starting to think that may be the natural order of things, and the past 50-60 years have been an aberation. Zero interest rates and a cost of living that’s rising faster than the government will admit is creating are real squeeze. The emphasis is best placed on living well, rather than on actual retirement. Unless of course, as you say, you’re rich already.

  108. I am approaching 50 and concerned, I had a good plan set but my divorce changed everything in a blink of an eye. I am trying to figure out if I am saving enough as of now. I would like to retire in 15 years, 401k + pension (frozen now) is 230K. starting 1/1/16 I am putting in pretax of $18K (limit) my employer will match $10,800 (6% match), after tax I am putting in another $14,000 and my employer is making one time payments of roughly $8,000 per year to offset frozen pension. all in I think its around $50,000 per year. If I do this for the next 15 years will I have enough for retirement?

  109. Hi Jay – Let’s see, you have $230,000 already, and you’ll be saving $50,000 per year for 15 years. That will add another $750,000 to the pile, bringing you at right around $1 million, plus accumulated investment earnings. Yeah, I’d say by any objective measure you’ll be just fine.

  110. Out of job, 6 yrs. Ago.(corporate downsize) Used all savings to keep house. (In retrospect, should have gotten out. Too much, needs repaired and no money to do it.) Working, nearly full-time, no benefits (still on govt. Health ins. But that will go soon.) Just making all payments. Seriously considering renting again, selling home. Need to decide, get out now or home equity and fix up. Can do when refinance in April. (Have to wait because of bankruptcy) 56yrs old. Have a small life ins. policy and small annuity, that i cant touch, till later.

  111. Continued-melissa, Just making the bills, not anything over. All part-time jobs. Nothing full-time. How do i save for retirement? How little, each month, that will add up, in 15 years. Thanks.

  112. Hi Melissa – At this point, you’ve got two major problems that are stretching you too tightly. You’ve got the house problem and the career issue. You probably need to pick one of the two, then concentrate all of your time and energy getting it into a better position. I’d start on the career front, then deal with the house. Divide-and-conquer! Once those two problems are under control, then you can worry about retirement planning. Hopefully, the health insurance issue will be worked out by a new job with coverage, which is another reason to start on the career side.

    You’ve got too much going on to even start worrying about retirement. You’re in one of those “life got in the way” moments. And until you deal with that, retirement isn’t in the picture.

  113. Hi Kevin,

    I’m 33, just started a Roth IRA this week. I deposited the max 5500 in the account. I had no idea 5500 was the max. I wanted to put about 40,000 in this account to begin with, but now knowing that I cannot do this how will I reach my retirement goal? I’m Currently living with the parents. and I make about 17 dollars an hour, I’m able to save between 8,000 – 10,000 a year, but have no idea what the future presents 5 years from now whether that be out of the house (I hope) or a new career. 5500 max a year does not seem like it would make me comfortable in the end. Advice please?

  114. Hi Doug – First, give yourself a pat on the back for starting to save for retirement. A lot of people your age are hardly thinking about it. But I agree $5,500 is unlikely to get you to your goal. But is there a retirement plan you can participate in at work? If not, save and invest your money in a non-tax sheltered brokerage account, the same way you would in the Roth IRA. You won’t have the tax-deferral on investment income, but you will be able to withdraw the money without regard to tax considerations whenever you want. That’s unlike tax sheltered plans where you have to pay tax on any distributions (except of course with the Roth IRA).

    Another possibility is to start a side business, and set up your own plan for that business. For example, you can set up a Solo 401(k) plan that would allow you to save up to $53,000 per year.

    You do have options, they’re just not as clear as depositing money into an existing retirement plan.

  115. Great article,and the responses add even greater value. I live in the UK so alot of the pension phraseology is a little foreign to me. But, what the article provides is advice for the majority of us who are 50+ who don’t have 6 figure incomes and have to get on with the business of living. Appreciate the practicle advice.

  116. Thanks Tim! I’d imagine there are people throughout the “rich countries” that are facing this dilemma. It’s a shame that it doesn’t get discussed more critically. The assumption is always slanted toward the millionaire retirees, who statistically speaking, are fairly rare.

  117. Mike wants to know what people were doing before 30 if they weren’t saving money. What the hell do you think this whole conversation is about? That was a real stupid thing to say.

  118. Hi Patti – I scrolled through the list of comments and didn’t find anyone named Mike, but I do remember a comment or two along that line coming in. But I have learned that people who are in a favorable position in life often have little sympathy for those who aren’t. They think that everyone should “do the right thing”, while discounting that so many people are mired in low income situations, have heavy family obligations, have to deal with prolonged illness, might have been working in a dying/declining industry, experienced severe misfortune or may simply have exercised bad judgment.

    The Christian faith has taught me that there is no room in human existence for arrogance, and to live by the saying, “There but for the grace of God go I”. I think it’s always more productive to offer constructive advice to help someone deal with their situation as it is, without judging the factors that might have gotten them there. Yes, many times our problems are self-imposed, but many times they’re not. It’s always best to give people the benefit of the doubt. We all need that sooner or later. And you’re exactly right – that is what this article/conversation is all about.

  119. Hi Kevin,

    You had responded to my situation above, but now I have another question

    My situation is ….. at 230,000 saving 50,000 for 15 years. I want to buy a house and this will impact the ability to save 50,000. I’ll need to stop the Roth contributions bringing the annual savings down to
    About 38,000.

    I’m investing 120,000 down payment on the house and will try to reduce the amount owed with additional payments. I can’t calculate what the equity may be in 15 years. I’m 49 this year and plan to make catch up payments next January. I’m so concerned for the future. Anything else I should consider ? Maybe rent and not own ? I’m very handy and plan to update the house for added worth. Stressful

  120. Hi Jay – First off, as I wrote in my response to your first question, I think you’ll be just fine. As to the house, I’ve come to the conclusion that the purchase of a house isn’t necessarily a financial move. It’s an emotional choice, and mostly a lifestyle decision. If you feel that your income situation will remain stable over the next 15 years, you should be able to easily work the house into your retirement planning. You’ll be fine either way.

    What you’re really doing is diversifying your investments into three segments – your 401(k) plan, your Roth account(s) and the house. That’s solid portfolio management. As long as you can comfortably continue funding your retirement – even if you have to take a break for a year or so – and you can have your mortgage paid off by age 65, you’re heading in the right direction. A mortgage free home is a major retirement asset in itself. In all three cases you’ll be making contributions that will build up your net worth, and that’s what matters most. As I said, you’ll do just fine, and the subject of this article doesn’t really apply to a person in your situation. Stop worrying and enjoy your life, smart strategies and good fortune!

  121. Thanks Kevin for this useful post to us 50 something folks. I’m 53.5 and plan to work to about 70 (God willing). I make about $104k a year and my employer contributes 10% annually. Since I wasn’t making additional contributions, I only have $140k in my 403b. My only debt is my mortgage of $243k. My plan seems to go against most financial advice, but I’d like to aggressively attack my mortgage debt and pay it off in full in 5 years. That would mean at age 58 I’d be completely debt free and then I could turn my attention in the last 11 years before retirement to aggressively save. In those 11 years I would be able to max out my 403b ($2k a month) and max out an IRA Roth for another $6,500 per year. My employer would, of course, continue to contribute 10% annually. I wish I started this off earlier and had my house paid off in my 30s. I could have retired by now! But I’m glad I woke up now and have at least this plan. My question to you is: Do you see any holes in this plan? Am I crazy for paying off my house first and losing five years of compounding? The thing is if I don’t pay down aggressively I will only be able to contribute minimally into retirement because I still have to pay a good portion of my salary into the house. Plus, I really want that security of having a paid in full house just in case… Thank you for all this advice, it’s very gracious of you to put in all this work!

  122. Oh, one more thing: The contributions I’ll be making into my 403b of $2k a month in my last 11 years will be into a Roth 403b. I just love the idea of being able to pull out money in my retirement years with no tax. Is that a good idea? Most seem to prefer the tax defer route and then pay taxes later. But I’m one of those who believes taxes in the future will be higher. Plus, having my money grow annually and then to not be taxed for that growth sounds great.

  123. Hi Paul – I think you’re heading in the right direction across the board. I like the idea of paying off your mortgage early, though I must confess that I don’t understand the mechanics of paying off a $243,000 debt at $2,000/mo for five years – it doesn’t seem to add up unless I’m missing something?

    But if you can pay it off in five years, that will not only eliminate your mortgage payment for retirement, but it will also enable you to save more for retirement. The Roth 403b is an excellent idea too. Since you already have a 403b, which will be taxable in retirement, the Roth 403b will add tax diversification to the mix. I think you’re right on track!

  124. Kevin, thanks for the response. Sorry for the confusion: The $2k a month is the amount that’ll go into my 403b after I finish paying off my mortgage. I’m actually now paying $4,600 a month (not including escrow) towards my mortgage.

  125. Thank you for addressing Ken’s comment, earlier in the thread. I just turned 58 and I have no retirement. Was this by choice or by wrecklessness? NO! I got divorced and my ex husband’s trust fund that we were going to be using for our retirement, was untouchable by me. I put myself through nursing school and am now working, but my job doesn’t offer a retirement plan. It all seems so overwhelming and yes, even futile to start, at this late stage in my life. I have recently remarried and we are almost debt free, except for our mortgage. Thanks for this article, we will trudge forward and try to balance financial preparedness, with enjoying life.

  126. Hi Lori – Good for you not giving up, that’s such a big part of life and one not always appreciated. Congratulations on getting remarried also. Please focus on the positives in your life and you have several. For starters, you’re a nurse which is a very stable career and one you can do in some capacity for as long as you’re able. Then you have no debt. You also own a house. My suggestion is to work on paying off the mortgage, that way you’ll either have a mortgage-free house to live in, or you can sell it to raise retirement capital.

    Even though you’re not covered by a retirement plan, you can still set up an IRA and I recommend that you do. Also, you can save money for retirement in non-retirement accounts as well. That has the advantage that withdrawals taken in retirement won’t be subject to income taxes. You’ve got enough time and resources to insure a at least a comfortable life, even if you never have a full-time retirement.

    One other thing – go forward in your life. Forget about your ex and the trust fund that wasn’t. You’ve got plenty of other positives going on.

    Thanks for weighing in.

  127. I’m 35 years old. Been struggling with finding a good career ( something paying over 50k a year). I have student loan debt, an expensive mortgage, car payments. I have a 3 year old son as well. My wife who is 30 is in a job she hates and wants to change as well, but we are house broke. I need all our income to pay our bills and take care of our son. I have maybe $3,000 towards retirement but nothing else. I know this article is for over 50 but being at 35 and having nothing saved scares me. I feel like I’m going to be spending until im 50 trying to find a great career and by that time I will probably end up working until I’m 75. I don’t know what I’m going to do.

  128. Hi Jonathan – You’re right this article is aimed at the neglected group of pre-retirees who are over 50. But it really has become a problem at all ages. In fact, most of the problems for those over 50 who don’t have much in the way of retirement savings start in the 30s. That’s when career and spending patterns begin to morph into long-term trends.

    I’m going to focus in on a single point you made: “house broke”. This is just me, but I’m of the opinion that when you’re facing several problems, the best strategy is to identify the biggest one and deal with it first. Once you do, everything else becomes more manageable. With that in mind, I’m going to suggest that you and your wife seriously consider selling your house and moving to less expensive living quarters. Once you do, you may eliminate some of the most pressing stress, freeing up your minds to concentrate on the career push. It’s hard to do that when you have to cover very large bills every month. It means your minds are always preoccupied with staying afloat, rather than moving ahead.

    Maybe you can rent for a while and use the proceeds from the sale of your house to pay off your student loan debt and/or one or more of your car loans. The first step when you’re wounded – and you are financially – is to stop the bleeding. From there, concentrate on building a lower-cost lifestyle, that way you can save some money. If you don’t get control of this now, it will likely only get worse as the years roll by.

    I know that all sounds radical, but radical action is the only way to deal with radical problems. Now I’m more than a bit of a non-conformist, so none of this is radical from where I sit. And what I do know is if you don’t think outside the box you’ll doom yourself to be stuck in it for life.

    I’m going to ask you to read these two articles I’ve written on this topic: Micro-frugality VS. Macro-frugality and The Connection Between Financial Freedom and Being Frugal.

    Good luck to you and your family, and feel free to check back in.

  129. Kevin, Thanks for the response and those 2 articles. All I have to say is “wow”, that is me for sure. I’ve cut all my “Micro-expenses” as far as I can. My mortgage payment is 59% of my total take home pay for the month. My wife asked me the other day “What if we had a $1000 repair to the house or car?”. I told her “well, I’d have to put it on a credit card”. I love our house but hate living this way, and with the failure of finding a higher paying job, I think it’s time to make the tough decision like you said of selling the house, then the freed up income should help pay off the other debt. I feel like I need to end this constant cycle of “staying afloat”.

  130. Wow, Jonathan, 59%! When I made the recommendation that I did, I was thinking more along the line of 40-45% of take home pay. 59% is a crisis waiting to happen, and it’s a ratio that frequently indicates foreclosure in the future. Your life and your family are more important than a house, certainly one that you really can’t afford.

  131. I am 50 years old with 15k in retirement “cash” which is put into an IUL (Index. Univ. Life) policy I bought when I was 39. And thank God I did. Because it will provide me with a life time income beginning at age 68 – albeit small (approx. 1k a month) … BUT … combine it with Soc. Sec. and a govt. pension (which I’m fully vested in as I’m a 12 year government employee)…. and the change starts to add up.

    I think the BIGGEST (or one of) mistakes that people make is we so often hear, “If you don’t have a gazillion dollars – you’re retirement ain’t (insert expletive here of choice) – LOL). And to that I say FALSE – totally FALSE!

    If you have a pension (there is part of your “gazillion dollars.” Social Security takes up another chunk of your needed “gazillion.” And your third leg is personal savings.

    It will take me until I am 68 to save 100 (that’s about 25 years – yup!) – but I’m doing it .. because I would rather retire with a 100k actual cash value insurance policy I can draw on for life .. in ADDITION to SS and in ADDITION to state pension. Talk to anyone on SS and ask them, “Would you like an added 1k a month?”

    Now, I will say .. due to loving parents, this past 2017 winter they left me a gift of 100k after taxes. And because I know I am so far behind in retirement, I am putting 90 percent of it into a fixed indexed annuity (I’m a conservative risk taker).

    This has COMPLETELY changed my retirement portfolio. So much so … that as my accountant said, with the 18 years it has to grow … I could do thing else and with 4 retirement accounts (all payable until my death / or death of spouse) I’ll be fine.

    But believe me – I thank my parents DAILY for this present. Because 15k at 50 years old .. scared me. But my parents knew I was scared about it – and they knew I wouldn’t waste the inheritance. And I will continue building my other 100k over the next 18 years – just as planned. This will leave me 5 retirement accounts to draw on.

    So NEVER doubt yourself because you only save $150 a month .. it’s what I started with at age 39.

  132. Sometimes life happens that you are unable to prepare yourself for. Such as a spouse becoming disabled and having to sell your home AND raise your children AND work just to keep afloat. Then the spouse passes away and his income with him. You literally lose everything. Plan B…C…probably D. No debt but no retirement. You never know what life is going to hand you. Your ducks sometimes don’t stay in a row.

  133. Hi Patti – That sort of situation can happen, and it can happen to anyone at any time, even though we think otherwise. But I like the saying “bloom where you’re planted”, which kind of brings you into here and now. All you can do is the best you can with the resources you have.

    From what I’ve seen, no debt is becoming a big plus. A lot of people in their 60s and 70s have a stunning amount of debt. They can’t retire, and they haven’t gone through nearly the troubles that you’ve described.

  134. Hey Kevin, Not sure where I stand. I’m 55 and have 460K in a 401K (not a lot considering my age). I have a defined benefit pension worth roughly 73K a year for life if I were to start taking it in 2018 (worth 103k a year if I retire at 60). I have about 30K in stocks and am currently 70K in debt. I make 180K a year and hope to retire at 60. In your opinion what shape am I in? Does it seem likely I can retire anytime soon or am I not quite there? I do not own a home. Kids college is paid for. In a perfect world I would like to retire within the next few years and move to a state where they wont tax my pension. I would really be interested in your thoughts.

  135. Hi Shane – Don’t take this the wrong way, but this article isn’t meant for people in your situation. You have abandant retirement options, far more than most people your age. The defined benefit pension plan alone is a rarity in this day in time – I’m even guessing you’re in a government job, that’s how rare those have become.

    Just looking at your situation from afar, I see two challenges. The first is your $70k in debt. Eliminating it would put you on easy street. At your income level you should be able to pay it off in five years.

    The second isn’t as easy. At $180k in income you’re probably living quite comfortably. The fact that you’re asking for an opinion on your situation tells me you have doubts about your ability to live on substantially less. I think it may be harder for a high income person – which you certainly are – to downshift (financially) than it is for a person at a lower pre-retirement income level.

    So maybe the challenge will be to figure out how to fit your lifestyle into a $103k income from $180k. But you’ll also have the 401k for additional income, plus you will be eligible for Social Security at age 62. My thinking is if you can get your debt paid off, you’ll do just fine. I’m also assuming that your move to another state will involve trading down on your housing space?

    As I said earlier, you have plenty of retirement options, and don’t need a lot of advice.

  136. Hi, I am 52 years old and have very little saved ($70k) for retirement, after a 4 yr long contentious divorce. I lost it all: ownership in our business, bank accounts and homes. What investment options do I have?
    I receive alimony, but no longer own a home. I am debit free. Unfortunately, no college degree and finding it difficult to infiltrate job market. (I am 5 college courses away from AA degree). I would appreciate advise on preparing retirement plan.
    Thank you.

  137. Hi Katherine – Since your income is alimony, you won’t be able to make retirement plan contributions (those can only be made from earned income). Your best bet looks to be finishing your degree, then trying to work into a new career. From there, you can begin saving money in retirement plans. But you can still save money outside of retirement plans, putting money from alimony into savings and investment accounts. You won’t have a tax benefit, but you will build up money.

    As to specific investments, I can’t give any advice here. The markets, especially the stock market, are so high that the risks are higher than the potential rewards. You might talk to a financial person who’s aware of your situation. Good luck!

  138. Hi Kevin. A bit of background. My husband is age 64 and 15 years older than me and was forced to retire his job after having a kidney transplant and other ailments which prevented him from continuing in his line of work. He is permanently disabled and his only income is from SSDI/SSI. I work full-time and have been on my job 25 years and I also purchased additional service credit so technically, I have 30 years vested on the job. I have the option of retiring next year at age 50 (defined lifetime benefit) but am looking to the future and do not believe its in our best interest to do so. My husband is not well and his income currently pays our mortgage which we’re upside down on and the monthly note is about 45% of our net income. This is a concern for me since I would not be able to carry our household should something happen to him (dies). When i met my husband, he was already sick and once we were married i was not able to obtain life insurance on him. This is also a concern. We have two kids in college and they are in their junior year. Both are in public colleges and one went to a community college for 3 years but we always have to pay outta pocket since we don’t exactly qualify as low income. We do live pay-check to pay-check. Our total debt aside from the mortgage which we still have 15 years to pay off, is about $50,000 in total. This amount includes 1 car note. I may be all over the place and i apologize but as i read the comments here, i am now even more concerned for our future. Side Note: My husband has lived in our house for over 30 years but due to bad decisions, we now owe more than its worth. Please give me feedback. I’d really appreciate it.

  139. At 52, I am just entering into a TSP with my job. They offer 4%. At $60K not sure what amount I should contribute? Any advice?

  140. Should add that I’ve contributed to social security for nearly 40 years. Bright future or not so much?

  141. As much as you can comfortably afford. More if you have no other retirement savings. 15% plus a 4% match is 19% and that’s almost $12,000 per year based on a $60,000 salary. It would give you a solid six figure retirement stash by age 65, and a lot more at 70 if you keep working.

  142. So, what do you do if you don’t have a job, no savings and no future? I have a 401k which contains $75.

  143. Hi Peter – Then there’s not much alternative to doing what you’ve always done, which is to work to pay the bills so you can survive. There’s no magic formula. Collect Social Security, continue to work, and save any money you can.

    As to your question about debt, if you have debt and no money, you might talk to a bankruptcy attorney.

  144. I?m 56, out of work for a year despite having an MBA, applied for over 50 jobs without success, many of which i?m overqualified for. I have no savings for retirement and about 3 months living expenses left. Just what is the point of carrying on? I?d rather be dead than on the street.

  145. Hi Dave – I’m really sorry to hear about your situation. There are more people in a similar position than we generally assume. Unfortunately, it’s an American cultural norm that we “suffer in silence” (lest we upset the general narrative that “everything’s great” – therefore the problem must be me).

    Please don’t give up hope. I faced a similar situation at age 50, family in tow. Try to think of it as a turning in your life. It’s a fact that personal disasters can form the soil of the next “blooming” in your life. Please think about what you WANT to do, then pursue it with the relentlessness of a desperate man. You may be surprised where that leads you. What I’ve found to be true in my life is the first thing you need to do is to generate forward momentum. Once you do, good things start to happen. Maybe grab any job you can get, or a series of jobs, to pay the bills along the way.

    Please read my story here. You don’t have to become a blogger of course, but decide what it is you’ve always wanted to do and “let it out of its cage”. Passion mixed with relentlessness is a powerful combination, and you won’t realize you have it until you let it flow.

    Please check back and let me know how things are going. It’s a day-by-day struggle, but you really can get momentum going in your favor by moving yourself forward a little bit each day. Soon enough, the breaks will come, then you’ll be looking back and realizing the job loss was the beginning of a new life.

  146. I wanted to respond to Molly, the really hard case. I appreciate this post because most advice is geared toward the people who just need to hear over and and over save your money, contribute to a 401k and the usual. For many people that will be enough but this is not a perfect world and no matter whether there was a justifiable reason or not some of us just aren’t going to have the necessary savings. In those cases you have to forget about the judgements others make about you and make moves to live the best way you can.

    Molly, regardless of all the people that rail against it there is still a safety net that exists in our society and you need to apply for whatever you can. Apply for food stamps if you are eligible. Get on the waiting list for Section 8 (there is always a waiting list), it may take a year or two for housing but a year or two is going to pass anyway. Go to Senior Services in your area and fund out any ways they can help. Of course once you get all this in place it frees you up to concentrate on saving, not surviving and then maybe you can put some of the rest of the great advice on here to work.

  147. That’s excellent advice Linda, thanks for weighing in. If you’re in a difficult place in life you need to take advantage of any and all services available, at least until you can see your way clear.

  148. Hello – I am hoping I am on the right track for a fairly early simple retirement, but am just not certain. I started my job at 18yo, and am currently hitting my 30th year. I am 48 yo, making about $59,000 yr. I have a full pension when I retire at 60 yo. I contribute $200 per paycheck to a savings account bi-weekly, and roll over a $25k CD every 5 years. Right now, approx $58,000 in cash savings. I save 16% pre-tax 401k, and 5% Roth 401k at the moment. Of course it fluctuates, but current 401k value is $335,000. Every year I get a raise, and that raise goes into the Roth fund, so I can take it early with no tax penalties. My home is paid for, as are my vehicles. I plan to take SS at 62, as I am not guaranteed to live until 67, so why be greedy? I hope I am on the right track… Thoughts?

  149. Totally Mike. You’re better off than 90+% of the population, so please don’t waste your time worrying about it. This article was certainly not written for people in your situation.

  150. Thanks for the input , Kevin. There are so many variables in the world. Obviously the market is up and down, which is a concern to me. 5 yrs before I retire, if the market is up, I will take no\minimum risk with the 401K I accrue, but until 55, I am playing hardball, maximizing risk\reward. Worst case, Market is down, and I wait it out to recover. I know I am in a good position today, but I guess until I retire, I will always wonder what more I can do to live a good retirement, with no financial worries.

  151. I’m 54 single, rent,no debt and have a little over 100k saved for retirement. I make 38k a year and try to put 1k a month with company match. According to the Social security website i’ll get 2k pet month in todays money at age 70. My monthly expenses are about 1800 per month. So on paper it all looks fine, but am i missing anything?

  152. Hi Steven – I think you’re doing quite well on a modest income. You should be in a solid position if you plan to work until 70. If you want to do anything more, I’d recommend developing a part-time career you can do in retirement. That will be especially important if you have to retire sooner than 70. It’ll be a good back up plan. But otherwise it looks like you’re on the right path.

  153. Wow. After reading Ken’s comments it made me feel really negative and bad about myself. For a minute. Just because I have NO savings at age 56, doesn’t mean I’ve done NOTHING right my whole life. I’ve raised a family and now I have a beautiful grandson living with us and his parents. I’ve helped them to try to stay afloat and get on their feet. I’ve gone through 2 divorces and now have been remarried for 14 years. My husband makes alot less money than I do and has not been able to save either. We are trying to figure out now, how to pay off debt, think of something to do in retirement to keep us afloat and to give us more time to spend with the people we love. Judgemental people just don’t help. They make you want to just give up and figure you’re just a failure beacause you’re not like them. We work hard and regularly. We are honest people and sleep well at night (well at least he does!)…Thank you to everyone else who has positive, encouraging words for people like us!!!!

  154. Hi Lisa – I completely agree. Bigger picture, self-worth should never be determined by the size of your bank account. If it is, you’ll become suicidal if you ever lose it all, and that DOES happen in real life, often for unforeseen reasons. The purpose of this article is to focus on what can be done at this point in life. There’s absolutely no benefit to looking back and regretting what wasn’t done, but everything to gain by moving forward with the resources and skills you have.

    The end goal in life should be to create a worthwhile and interesting life. That requires balancing personal circumstances with goals and desires and coming to a point of balance. For some, that will require accumulating a certain amount of money. But it isn’t entirely necessary. None of us will get out of this world alive so amassing a financial empire is a lot less important than we think. As Jesus told us “What good is it for someone to gain the whole world, yet forfeit their soul?” (Mark 8:36.) The problem is that many don’t realize they’re forfeiting their souls because they’re so convinced having more money is the answer.

    Find work that you like, that you can do all your life, then do it part-time when you start collecting Social Security. Try to save as much as you can along the way – yes, life is easier and less stressful when you have at least some money – then concentrate on living your life. Anything beyond that is an unnecessary complication.

    BTW, if you look at the number of rich and/or famous people who die early, it should become obvious that money guarantees us nothing.

  155. I did start planning early, yet two divorces with bad lawyers & a severe injury accompanied by several surgeries has left me penniless. I’ve lost my house, depleted my savings and retirement, and I have a lot of medical debt and student loan debt. I’m 51 and single. I don’t know what to do.

  156. Hi Elizabeth – I think due to the extent of your financial troubles, you might want to discuss your debt situation with a bankruptcy attorney. You may qualify to have the student loans discharged under an extreme hardship. After filing for bankruptcy, you should start from where ever you’re at to get into some sort of work or business you can do for the rest of your life. Once you find it, begin saving and investing any money you can. You may not be able to retire, but you can create a more comfortable life for yourself. As I’ve written in the article and in other articles, a lot of people aren’t going to be able to retire, so the goal needs to shift to creating a comfortable life doing work you enjoy. You can still enjoy your life – I’ve known dozens of people who never retired and still led compelling, enjoyable lives. That really needs to be your focus, at least after you deal with the debt situation.

    There won’t be an easy way out, but hopefully this advice helps a bit.

  157. My goodness!! Never retire?? Never?
    Really, work until I die is the advice for me. I was impressed with the advice you gave others. However this seems like the worst advice I?ve could have imagined.
    I?m very disappointed there is no glimmer of hope for retirement in your opinion. I still can?t believe it as I read your advice again.
    This has definitely ruined my outlook on life in my golden years.

    I wish I never asked you for advice.

  158. Tongue in cheek, another option is to find someone to spend the rest of your life with, 51 is still young.

    If you aren’t eligible for a state pension or social security, there are few if any other options available than to find work that doesn’t feel like a job.

  159. You haven’t indicated if you have a pension. Other than that can you live on Social Security alone? I did suggest saving as much as you can, but your original comment led me to believe money is extremely tight, and that may not be an option. But if the income is there and you have a 401(k) or equivalent plan, max it out ($25,000 per year since you’re over 50), then you might be able to retire at 70, if the stock market cooperates.

    You asked my opinion and I gave it. There’s no magic formula here, and if you noticed my advice has been consistent to anyone remotely in your situation. Retirement isn’t a right, and you may have to make other plans. That’s certainly reasonable advice under the circumstances.

    Anyone who tells a person who’s “penniless” at age 51 that they can retire is being disingenuous.

  160. Agree with your comment Kevin, “Retirement isn’t a right”.

    Rightly or wrongly, our generation born in the late 1950s early 1960s have been led to believe we’ve earned the right to retire like our parents. There is a new reality, we all have to accept and that is we may need to find work we enjoy to supplement our measly pensions. Not a bad thing as it will keep our brains active.

  161. The other thing – and this is really important – you can’t assume you’re doomed because you can’t retire. Most of the workers in the world never retire, as well as the fact that it’s a relatively recent phenomenon, having been the norm for the middle class only since World War II.

    My own feeling is if you can collect Social Security and/or a pension, and work part-time or run a side business, you can still have a good life. Even in the best of times no one’s ever been guaranteed they can retire. I see older people working all the time, and I suspect many have come out of retirement due to the rising cost of living. That’s problem we’re all going to have to deal with, especially with healthcare and health insurance.

  162. I guess in the UK we have it a little easier because we have free healthcare, so we don’t have to worry about the cost of falling sick.

    A prospective retiree is mainly in the UK, at least, concerned with food, clothing and shelter.

  163. The big fear that most people looking to retire have is healthcare. I have had friends lose their jobs and pay (over pay) for cobra. I have heard stories of people paying 24k a year just for healthcare. Understanding how best to manage that expense will help a lot of us who can ease into retirement. Any advice on how to handle this expense?

  164. Honestly Shane, no. I’ve written on the health insurance topic a few times, and it’s complicated. The problem is it’s national in scope, and under current law we have few options before qualifying for Medicare. My best suggestion would be to look into Christian health sharing ministries, if you can qualify. But you must be a believing Christian, and be in good health, otherwise you won’t be accepted.

    One advantage with Obamacare is if your income is low enough, you’ll get the subsidy that can seriously lower the premiums. But if you make much money you won’t qualify for the subsidy. Otherwise look into part-time jobs with health insurance.

  165. Money is relative, find a country that is less expensive, has very inexpensive health care and dental care, housing is affordable, foods fresh..and go. We lost so much of our investments on both of the big stock crashes,,,we could take what we had left and retire where we could afford it, or work until we saved all we lost…we live in Ecuador. There are alternatives..there are countries where you can live on your retirement without getting a job,,or you can work on line to supplement…many teach English for a few hours per week. Learning Spanish was a hoot,, but we are getting there.
    You get a retirement visa,,,healthcare here is 78.00 a month for retirees and the care is excellent.

  166. That’s a daring strategy Edgar, but one I’m hearing more people take all the time. Of course, family situations weigh heavily. If you have siblings, kids and grandkids, and especially an aging parent or two, it’s much harder to do. But I think as borders continue to become increasingly irrelevant (due to the internet, global commerce, electronic money, increased air travel, etc.), more people from rich countries are going to relocate to poorer ones to escape the high cost of living. I truly believe we’re entering a new paradigm, especially with retirement. We need to prepare ourselves for a very different world than the one we’ve known up to this point.

  167. A good option moving to a different country, but you still need an income.

    I got the impression Elizabeth has no access toincome producing savings or investments or, entitled to social security.

  168. That’s the impression I got from her original comment, and why I gave the response I did. If a person is low/no income, broke and deep in debt, my suggestions will always be to prepare for a non-traditional retirement/semi-retirement. I’m not pretending to be the Wizard of Oz here. We have to be realistic about the parameters we’re working within in life. I just got news we had a death in the extended family last night – 56 years old. The point is we’re guaranteed nothing, not even life itself. We can only do the best we can with what we’ve got to work with, and to enjoy life to the fullest within those limits. My own feeling is Elizabeth needs to deal with her immediate financial situation, then work on creating a whole new life. That’s all any of us can do after what she’s been through. Retirement is at best a secondary concern.

  169. I think that’s already the case Tim, now it’s just a matter of the average person acknowledging that reality, and adjusting accordingly. That’s what these articles are all about. We can become the proverbial “greeter at WalMart”, or we can create exciting new careers, full- or part-time. That’s increasingly the choice. And with Social Security and Medicare – and any savings or investments we have – the survival aspect should be minimized.

    Yeah, it would be great if we could all fully retire the way people did 20-30 years ago, but if you can’t you have to get to work on a Plan B. It’s a healthy response, and sure beats being miserable over what you don’t have.

    My uncle was still working at age 88, and he had plenty of resources to simply quit and retire. But his advice to me was “anyone who retires these days is a fool”. That’s advice coming from a guy who made a lot of good choices in his life. But then he always has been the consummate realist.

  170. Thank you for such a great post. I’m in my mid 30’s and have been diligent with my savings rate and plans for financial independence but I’m worried that my mother does not have enough savings for her retirement.
    My mother is the type of person that loves to enjoy the moment and says she doesn’t want to live too old and have to depend on others. She loves to travel, spend time with family, etc. Reading the end of your post brought a lot of ease to me, although I’ve known that having it read emphasized that we have to live our life to the fullest, take care of our health, relationships, hobbies because that is what will ultimately make us happy now and in the future.
    I will stop worrying so thank you so much for this.

  171. Hi Vivian – Worry will always be part of life, but we have to do what we can to minimize it. Prepare to the degree you can, while recognizing you’ll never have absolute control over the outcome. I hope it all works out for you mom, but her plan sounds like a non-plan. That said, I’ve seen a lot of people with no plan do just fine in life. Flip side, we can worry and plan, and things still don’t work out. That’s what convinces me we need to take a balanced approach in life.

  172. HI, Kevin,

    I just found your site and have been reading this particular article intently. My husband is 61, I just turned 60. 22 months ago, my husband had a hemorrhagic stroke. Within 6 weeks, the company he had worked for for 9 years terminated him. While waiting for SSDI to kick in, our then 22yo son supported us with 2 jobs, our church paid 2 mos of our mortgage, and meals were provided by 2 different churches. I have been a SAHM for over 30 years raising our 6 children and homeschooling. To say this event flipped our world upside down is an understatement!

    My husband was fully vested in his last company and I found a stock document in his briefcase. The stock was worth $107,000, but HR at his company kept dodging my inquiries about it. An attorney friend finally intervened and within 4 days of his letter to the company, the CFO called me asking where I wanted the money to go. I went to our local bank and had the money rolled into a very low risk IRA that I could pull from as needed. That is now down to $20,000 as I had to pull from it for car repairs, house repairs, equipment our Christian Healthshare did not cover, etc.

    My husband’s disability income is about 1/2 of what he used to make. And it will decrease in 4 years when our youngest child turns 18. All those years of him diligently paying into SS to come out with about $2400/mo! Then I am told that this year he will be eligible for Medicare and that his disability will turn into retirement. I am not sure about this so have to go to the SS office to get it straight. I worked as a nurse prior to having children, but apparently am short 2 credits for any kind of SS benefits. I have to talk to someone about that as well, getting those 2 credits would just make me eligible for Medicare but no SS income. I have to clarify this.

    My mom passed away a few months ago and I will be receiving $100,000+ from her trust. So, altogether we will have $120,000. We plan to pay off debt, which is about $20,000 and buy a vehicle as our van just recently needed to be retired. I have asked a couple friends if we can possibly invest a bit of that $120,000 in something that can make our money work for us, but they all say it would be too risky at this stage. I can’t work as my husband is still full-time care. Prognosis for him is good, he eventually wants to work. But when that will be, we have no idea. If he continues to be eligible for disability, he is allowed to only make $1200/mo. That increases slightly each year.

    What do we do? Our tax man gave us the name of a financial advisor to perhaps make some suggestions. That $120,000 won’t last forever. God is good and has seen to our needs thus far. We trust He will get us through the rest of this journey. We just want to be wise and good stewards of what we do have.

  173. Oh, and to add, we do have a mortgage, about $72,000 left on it. It is not the house we wanted as our “final” home as it is a manufactured home in an area that is becoming very congested. We always dreamed of owning a small cottage-type home on some land and having smaller cottages on it to rent out. I was raised by parents who had many investment properties and learned to clean out after tenants vacated since I was a small child. With the trust money I am getting, we could pay off our mortgage AND debts, but be left with only about $20,000 and still need a new vehicle. We would have our house paid for, but living in an area we really don’t want to stay in.

  174. Hi Lori ? First, I?m very sorry for the situation you and your husband are in. It?s popular in our day and time for ?experts? to lay out plans and strategies, as if life progresses without crisis or disruption. Your experience shows how simplistic that thinking can be.

    You and your husband experienced a life-changing event, to the degree that the conventional wisdom and advice won?t apply. As you?re already finding, your efforts and resources are now centered on surviving the moment. Providing for the long-term is at best hovering in a gray zone.

    I have no solutions to your situation, only opinions. From a worldly/secular standpoint, they won?t be at all satisfying, but I?ll do my best.

    I?m very glad to see that you?re already people of faith, and that you?re part of a caring church. Both your faith and your church family are major advantages in your life. You?ll need to continue leaning on both. Seriously embrace Romans 8:28, ?And we know that in all things God works for the good of those who love him, who have been called according to his purpose.? I found this to be true, but never more than when facing a crisis. We can never know what that ?good? is at the time, but it will be revealed. That?s the essence of faith. And if you have moments of doubt, God understands.

    For now at least, you need to put any future plans and dreams on hold. But don?t be surprised if they don?t somehow work out in the future, due to an unforeseen change in your circumstances.

    The way I see it, from a financial perspective, is that you have two main goals at this point. The first is maximizing your income, and the second is minimizing your expenses.

    On the income side, much will depend on the extent of your husband?s recovery. If he is able to work at least part-time, earning up to $1200 per month will be an important income source. If he reaches the point where he no longer needs 24 hour care, you should plan to go back to work for at least six months to be eligible to collect Social Security. You said you need two credits, and since a credit is a quarter of contributing to the system, that works out to be six months.

    Once you?re eligible for Social Security, you?ll have two monthly benefit checks. If both you and your husband are able to at least continue working part-time, you?ll probably come very close to replacing his full-time income.

    On the expense side, I realize well-meaning people are recommending that you invest the money for future income. But I agree with those who are telling you it?s too risky.

    The lowest risk ?investment? you can make is paying off debt. The elimination of your $72,000 mortgage and $20,000 in other debt will immediately lower your living expenses. And obviously you need to replace your van. The remaining $20,000 should be sitting safely in a bank account, to serve as an emergency fund. You absolutely need to have that.

    On the flipside, if you invested the money instead of paying off debt, you?ll continue to live with the extra monthly payments. As well, there?s no guarantee the money invested would perform positively. A serious decline in the stock market could cause you to lose a big chunk of your investment. And fixed income investments simply don?t pay high enough interest.

    In a different direction, if you haven?t already, join one or more support groups for people experiencing similar health events. It can be through your church, your community, or even online. Naturally, a big part of this is for emotional support. But groups of people in crisis can also provide practical resources. Chances are, everyone in a group is aware of some resource that can help you. And going in the other direction, your own experience will enable you to provide resources for others.

    At some point, you and your husband may even want to start a blog helping others to deal with similar situations. That can even present an opportunity to earn money from home, which can be a nice supplement to other income sources.

    You and your husband are living example of ?For we walk by faith, not by sight? (2 Corinthians 5:7). You?re certainly doing that now, and will need to for the foreseeable future. But based on my personal experience with our Creator, a day will come when the fog will lift, and you?ll begin to experience the promise of Psalm 37:4, ?Take delight in the LORD, and he will give you the desires of your heart.?

    I hope this advice will be helpful at some level. Unfortunately, a major health crisis forces you to confront problems on multiple fronts. As I?m sure you already know, there?s no magic formula or strategy that will turn this around, at least not in the short run. The best you can do is to deal with each problem one at a time, then go on to the next. Your old, normal life is over. But you?ve already begun creating a new one. I hope you?ll find encouragement in that direction.

  175. Thanks, Kevin! Your advice is sound, both spiritually and financially. We serve a good God in whom we put all of our trust. We know He is walking with us every step of this new journey. It is not an easy road, but there are many others who are facing the same or even more difficult circumstances. It will not be in vain. I keep telling my husband that this test will become his testimony and he will be able to encourage others going through the same type of trial.

    We will get out to the SS office soon to make sure we understand both where I stand with my credits and how/when my husband’s disability becomes retirement benefits.

    I just got word from my brother that he will give us my mom’s car as part of her estate. That will help until we can get something bigger to haul around equipment and kids. There are blessings around every corner!

    Coming into this situation we are in, I didn’t even know how to make our house payment. Not that I couldn’t, it was just one of those things my husband took care of. My learning curve has been sharp, but I have become quite adept at paying all of the bills, dealing with providers,repairmen, lawyers, etc. In spite of everything, my confidence has grown and that is a good thing.

    As you said to someone in the comments, our grandparents didn’t have pensions, etc. Retirement was not even part of their vocabulary. They just worked at what they knew best until they no longer could do it.

    I told my husband, this is an opportunity to work at something he truly enjoys! He was in the same industry for 35 years, now he can do something fun! He is looking at taking a Master Gardner course in our county and then perhaps working at a nursery and/or starting his own lawn and garden service. Even though he is still unable to walk unassisted, a week ago he was determined to get on his ride-on mower and mow. That he did for almost 2 hours and it was a great confidence booster for him.

    All this to say, if I stay on top of it, our finances will work out. I make sure I get “wise counsel” and just put it all before the LORD. Thanks for being part of that wise counsel.

  176. Hi Lori – I’m humbled by your comments. I’m also amazed (though I shouldn’t be, knowing how God works) that you’ve had help at nearly every turn. The fact that your husband spent two hours mowing the lawn is a good sign. It shows he has both the physical ability and the emotional will to go forward. That’s more than half the battle right there. However your situation looks at the moment, I’d be optimistic.

    Happy Easter!

  177. I have nothing… I am 51… I make good money but live under crushing debt… I have zero in the way of real assets… I am working the same job now as I was when I left the military ten years ago… I left the military early so I have no type of retirement or pension from them… I don’t enjoy what I’m doing anymore, and physically I am starting to break down, and live with near constant aches and pains… My wife and I have had a run of horrible years financially and she doesn’t really work a career anymore, she brings in maybe 300-400 dollars a week…I can’t afford to get rid of my work vehicle and its pushing 300000 miles, I log over a hundred twenty days on the road generally every year… Our credit is shot so I’ve got THAT going or me… I don’t know what I should do… I hope all of you have the best of luck and hopefully soon I will see some kind of light at the end of this miserable tunnel…

  178. Hi Joseph – You might want to talk to a bankruptcy attorney. It sounds like you need to wipe the slate clean and get a fresh start. At least that will get rid of the debt.

  179. Im probably going work until I can’t work anymore. Im going to get a part time job doing something. You have to keep yourself busy doing something. I’ve been lucky enough to get a pension when I retire from my present job. My Ira will take care of the rest. But I cant just sit around and do nothing. Hence the part time job. Maybe I’ll try the freelance writing you talk about Kevin. Good post.

  180. Hi Beau – I think you’re going to have plenty of company. The instability of the economy, in combination with 25 – 30 year retirements is making traditional retirement a high risk proposition. Even if you’re well prepared for retirement now there’s no way to tell how things will play out in 10-15 years. My feeling is that we always need to be ready for whatever happens. That needs to be a lifelong strategy that doesn’t stop when you retire. There’s nothing magical about retirement, as if reality gets suspended in our honor. Reality does what it will, regardless what we have in mind. As John Lennon famously said, “Life is what happens while we’re making other plans.” I’m not a fan of Lennon, but that was right on the money. If you’re planning a time in life that could easily span 25 years, building flexibility into that plan is mission critical.

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