“Our house was big, but it also had its problems.” (The subject of the photo is the model.) – Getty Images/iStockphoto
I’m tired of reading how many millions each person has. We have about $100,000 in the bank. I’m afraid I’ll be homeless when my husband stops working. He is 76 years old and I am retired. Although our house is large, it also has many problems. We still have a mortgage, which scares me. It was expensive to move, we had nowhere to go, and we had four dogs.
Where can people like us get help?
living on the edge
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If you’re in relatively good health in your 70s, you’re wealthy at a level that many people with millions of dollars can only dream of. – MarketWatch Illustration
Keep doing what you’re doing: paying your mortgage and balancing the books.
There are no easy solutions. Not everyone is born on third base and has the advantages of family wealth and/or the means to pursue an education and a high-paying career. No two roads are the same and no two people are the same. Yes, it’s frustrating that someone with millions of dollars is writing this looking for advice on how to withdraw money while minimizing income taxes. Therefore, not all problems arise equally, nor does everyone start on an equal footing.
You do face the critical question: What if your husband is unable to work? What if the house needs major repairs? Explore property tax relief for seniors available through numerous programs at the state and local levels. Check out the Weatherization Assistance Program and the Low-Income Home Energy Assistance Program. Since your home is your primary asset, consider reverse mortgage counseling, if only to familiarize yourself with the issue. There are also pet-friendly senior living communities and subsidized housing programs.
There are other county organizations that can provide advice and assistance to people like you who don’t qualify for Medicaid but don’t have significant assets. You can find your local area agency on aging through the Elder Care Locator. In addition, the Housing Advisory Service can provide you with advice on mortgages and retirement forecasts for free or often at a reduced cost. They can help you navigate your financial situation and take some action on your “what ifs.” scene.
read: We are over 60 years old. Should I collect Social Security now to help my wife? What if I die before she does?
If you’ve been in your home long enough—more than 10 years—then its value has likely increased enough to make it worthwhile to downsize at some point. Even if the property needs renovation, families value good bones (a solid structure) and space (to raise children), and you may be able to make some money by moving to a smaller apartment that’s more manageable. I’m not suggesting you do this right away, but I wouldn’t completely dismiss it as an option. Renting may be another option in the future.
A comfortable retirement is made up of small victories, one decision at a time. CD and high-yield savings account rates are hovering around 4.2%, still ahead of inflation, which is around 3% per year. High-yield savings accounts are more liquid and have a monthly withdrawal limit of six. With a CD, you commit to a certain term. The interest rate on a high-yield savings account also changes based on the Federal Reserve’s base rate—even after you save money. The rates do not change when you purchase a CD.
At your age — considering that the average American woman tends to live into her 80s, while men typically live into their 70s — your goal is to preserve your capital, especially if you don’t have a lot of money to spend. That $100,000 isn’t much, but it’s better than $10,000. Financial insecurity isn’t a competitive sport, but you’re not the only one living life as it comes each day. That said, having $100,000 in your checking account won’t keep up with inflation, so you should at least do that.
Your husband and the fact that he’s still working at 76 seems to hint at a nugget: your health. If you’re in relatively good health in your 70s, you’re wealthy at a level that many people with millions of dollars can only dream of. You can compare yourself to retirees who have many times as much as you and despair, or you can make peace with the fact that you’re not necessarily an outlier. According to a Northwestern Mutual report released last year, the average retirement savings for a 70-year-old is $114,000.
You’re running your own race and most likely have your fabric cut to fit your needs. “No matter how much you save for retirement, use it only as much as your lifestyle allows,” Northwestern Mutual reports. “Think about what you want out of retirement and talk to your spouse or partner (if you have one). Analyze whether your current savings rate can truly support that vision, based on conservative assumptions about risk and future returns. If not, you may need to adjust your savings strategy or compromise to adjust your expectations.”
In your 70s, financial advisors recommend a moderately conservative portfolio—usually 40% stocks, 50% bonds, and 10% cash. Considering your age and the fact that this represents 100% of your net worth outside of your home, investing that $100,000 in the stock market right now would be extremely risky. But your $100,000 might give you some comfort. “At the beginning of each year, make sure you have enough cash on hand to supplement your regular annual income from annuities, pensions, Social Security, rent, etc.[s] and other fixed income,” Charles Schwab SCHW said.
Are your finances in good shape? not necessarily. Could things get worse? Absolutely. You have an income and a roof over your head. Some people live in very tight spaces. As one Moneyist Facebook group member wrote in describing your dilemma: “I lived in a 600-square-foot studio apartment in New York while I was working, which is considered large. If I were as worried about finances as you are, I would move to a one-bedroom apartment or apartment and go to an estate sale to raise the cash. Unfortunately, no cavalry.”
Another Moneyist Facebook group member expressed the level of savings they want you to have: “I’m disabled, and although we are older, we have a disabled 12-year-old. We fed 40 people at Thanksgiving, not because we could afford it, but because most people wouldn’t be able to put food on the table otherwise. We have less than $30 in the bank for our mortgage, and I’m worried that our 26 year old heating, ventilating, and air conditioning system or the roof will go bad. I’m a veteran, 10 in the bank “$10,000 puts you ahead of most Americans, and I’m glad you have that cushion.”
Food for thought. Your endurance has gotten you this far. I’m sure you can do the rest.
Don’t miss: I’m a senior in college and barely making ends meet on $1,300 a month. I can’t live on $1,000.
Previous columns by Quentin Fottrell:
‘I’m growing resentful’: My husband of 10 years owns $1 million and a car worth $200,000. Why doesn’t he give me money?
“This feels like an opportunity”: I’m 55 years old, making $78,000, and have no kids. My mom gave me $10,000. what should I do?
I am 54 years old, 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?
