“Our house is big, but there’s a lot wrong with it.” (Photo subjects are models.) – Getty Images/iStockphoto
I’m tired of reading how many millions everyone has. We have maybe $100,000 in the bank. I am terrified that I will be homeless when my husband stops working. He is 76 and I am retired. Our house is big, but there is a lot wrong with it. We still have a mortgage and it scares me. Moving will cost a lot and we have nowhere to go and we have four dogs.
Where is the help for people like us?
Living on the edge
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If you’re in relatively good health at age 70, you’re rich in ways that many millionaires can only dream of. – MarketWatch illustration
Keep doing what you’re doing: pay your mortgage and balance the books.
There are no easy solutions. Not everyone is born on third base, with the advantages of someone who has family wealth and/or the means to pursue education and a well-paying career. No two paths are the same and no two people are the same. Yes, it’s frustrating that someone with millions of dollars is writing to this column, looking for advice on how to make withdrawals while minimizing their income taxes. So not all problems are created equally and not everyone starts out on an equal footing.
You face critical questions: What if your spouse can’t work? What if the house needs a major repair? Explore property tax relief for seniors through a multitude of state and local programs. See Air Conditioning Assistance Program and Energy Assistance Program for Low Income Housing. Since your home is your major asset, consider reverse mortgage counseling, even if just to familiarize yourself with the issue. There are also pet-friendly senior living communities and subsidized housing programs.
There are other organizations, at the county level, that can offer advice and assistance to people like you who don’t qualify for Medicaid, for example, but still have modest assets. You can find your local agency for aging through the Eldercare Locator. In addition, the Department of Housing Counseling Services can advise you on your mortgage and retirement planning for free or often at a reduced cost. They can help you navigate your financial situation, as well as implement some “what if” actions you can take. scenarios.
Reading: We are in our 60s. Should I collect Social Security now to help my wife? What if I die before her?
If you’ve been in your home long enough — more than 10 years — chances are the value has increased enough to make it worth it to downsize at some point. Families value good bones (solid structure) and space (to raise children), even if the property needs renovation and you could probably make some money by moving to a smaller, more manageable apartment. I’m not suggesting you do this right away, but it’s an option I wouldn’t completely give up. Renting a room could be another option in the future.
A comfortable retirement is made of small victories, one decision at a time. CD and high-yield savings account rates hover around 4.2%, still keeping a step ahead of inflation, which runs at about 3% per year. High-yield savings accounts are more liquid, and withdrawals are limited to half a dozen per month. With CDs, you commit to a set period. Rates can also change with high-yield savings accounts — even after you deposit your money — based on the Federal Reserve’s benchmark rate. When you buy a CD, the rate doesn’t change.
At your age — given that American women, on average, tend to live into their early 80s, while men typically live into their mid-70s — your goal is to preserve your capital, especially if you don’t have a lot of money to play with. This $100,000, although modest, is better than $10,000. Financial insecurity isn’t a competitive sport, but you’re not alone in taking each day as it comes. That said, keeping $100,000 in a checking account doesn’t keep up with inflation, so you should at least get that.
A golden nugget seems involved with your husband and the fact that he is still working at 76: the state of your health. If you’re in relatively good health at age 70, you’re rich in ways that many millionaires can only dream of. You can compare and despair with retirees who have multiples of what you have, or you can also make peace with the fact that you are not necessarily outliers. The average amount of retirement savings for people in their 70s is $114,000, according to this Northwestern Mutual report released last year.
You run your own race, and you’ve probably cut your canvas to fit your needs. “No matter how much money you save for retirement, it will only go as far as your lifestyle allows,” the Northwestern Mutual report said. “Think about what you want in retirement and talk to your spouse or partner, if you have one. Analyze whether your current savings rate can realistically support that vision, based on conservative assumptions about risk and future returns. If not, you may need to change your savings strategy or make a trade-off to adjust your expectations.”
In your 70s, financial advisors suggest a moderately conservative investment mix — typically 40% stocks, 50% bonds and 10% cash. Investing that $100,000 in the stock market now, given your age and the fact that it represents 100% of your net worth outside of your home, would be an extremely high risk. But $100,000 can give you comfort. “At the beginning of each year, make sure you have enough money on hand to supplement your regular annual income from annuities, pensions, social security, rent.[s] and other ordinary income,” says Charles Schwab SCHW.
Are you in a strong financial position? Not necessarily. Could things be worse? Absolute. You have income and a roof over your head. Some people live in very cramped spaces. As a member of the Moneyist Facebook group wrote about your situation: “I lived in a 600 square foot studio apartment in New York during my working life and that was considered large. If I were as worried about finances as you are, I would move into a one bedroom apartment or an apartment and pull into an apartment to raise money. Unfortunately, there is no cavalry.”
Another member of the Moneyist Facebook group says they’d like your level of savings: “I’m disabled and while we’re older we have a 12-year-old with a disability. We fed 40 people on Thanksgiving, not because we could afford it, but because most of them wouldn’t have eaten otherwise. We have less than $30 in the bank and I’m 26. The HVAC or roof conditional I’m a military veteran who was forgotten $100,000 puts you way ahead of most Americans.
Food for thought. Your resilience has gotten you this far. I’m sure you can make it the rest of the way.
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Previous columns by Quentin Fottrell:
“I’m getting more and more annoying”: My husband of 10 years has $1 million and cars worth $200,000. Why won’t he give me money?
“It feels like an opportunity”: I’m 55, make $78,000, and have no kids. My mom gave me $10,000. What should i do?
I am 54 years old and married with 5 children. I have $20,000 in debt and $20,000 in mutual funds. I just inherited $10,000. How do I invest it?
