“Our house is big, but there’s a lot wrong with it.” (Photo subjects are models.) – Getty Images/iStockphoto
I am saddened to read how many millions everyone has. We have, maybe, $100,000 in the bank. I fear I will be homeless when my husband stops working. He is 76 and I am retired. Our house is big but it has many faults. We still have a mortgage and it scares me. It would cost too much to move and we have no place to go and four dogs.
Where is the help for people like us?
living on the edge
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If you have relatively good health in your 70s, you are rich with millions of dollars that most people can only dream about. – Marketwatch illustration
Keep doing what you’re doing: pay your mortgage and balance the books.
There are no easy solutions. Not everyone is born into third base with the advantage of family wealth and/or someone with the means to pursue an education and higher-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 writes in this column, perhaps looking for advice on how to withdraw while minimizing their income taxes. So not all problems are created equal, and not everyone starts on equal footing.
You face important questions: What if your husband can’t work? What if the house needs major repairs? Explore property-tax relief for seniors offered through numerous programs at the state and local levels. Look into the Weatherization Assistance Program and the Low Income Home Energy Assistance Program. Since your home is your major asset, consider reverse-mortgage counseling if you want 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 provide advice and assistance to people like you who don’t qualify for Medicaid but still have modest assets, for example. You can find your local Area Agency on Aging through the Eldercare Locator. In addition, the Department of Housing Counseling Services can advise you on your mortgage and retirement projections for free or often at low cost. They can help you navigate your financial situation, as well as help you answer your “what if?” Scenarios.
Read: We are in our 60s. Should I collect Social Security now to help my wife? What if I die in front of her?
If you’ve lived in your home for a long time—more than 10 years—chances are that it’s increased in value enough to make it worth your while to downgrade it at some point. Families value good bones (solid structure) and space (to raise children) even if the property needs maintenance, and you can save some money by moving to a smaller apartment that’s easier to manage. I’m not suggesting you do this right away, but it’s an option that I don’t completely discount. Renting a room may be another option in the future.
A smooth retirement is built by small wins, one decision at a time. CD and high yield savings account rates hover around 4.2%, still keeping one step ahead of inflation which is running around 3% per year. High-yield savings accounts are more liquid, and withdrawals are limited to half a dozen per month. With a CD, you commit to a set term. Rates can change even after you deposit your money — based on the Federal Reserve’s benchmark rate — even with high-yield savings accounts. 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. That $100,000, while modest, is better than $10,000. Financial insecurity isn’t a competitive game, but you’re not the only one who takes it as it comes every day. That said, keeping $100,000 in a checking account hasn’t kept up with inflation, so you should at least achieve that.
A golden nugget seems to lie in your husband and the fact that he is still working at age 76: the state of your health. If you have relatively good health in your 70s, you are rich with millions of dollars that most people can only dream about. You can compare yourself to retirees and be disappointed that you have the same qualities, or you can make peace with the fact that you’re not necessarily an outsider. According to this Northwestern Mutual report released last year, the average amount of retirement savings for 70-year-olds is $114,000.
You’re running your own race, and likely have your clothes cut to your needs. “No matter how much money you save for retirement, it only goes as far 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 realistically support that vision, based on conservative assumptions about risk and future returns. If not, you may need to tweak your savings strategy or compromise to adjust your expectations.”
In your 70s, financial advisors suggest a moderately conservative investment mix — typically, 40% stocks, 50% bonds and 10% cash. Investing $100,000 in the stock market now, considering your age and the fact that it represents 100% of your net worth outside of your home, would be extremely high risk. But your $100,000 can comfort you. “At the beginning of each year, make sure you have enough cash for your regular annual income from annuities, pensions, social security, rent.[s] and other regular income,” says Charles Schwab SCHW.
Are you in a strong financial position? Not necessarily. Could things be worse? Absolutely. You have an income and a roof over your head. Some people live in cramped quarters. A member of the Manist Facebook group wrote about your predicament: “I lived in a 600 square foot studio apartment in New York during my working life and that was considered big. If I were as worried about finances as you are, I’d move to a one-bedroom apartment or condo and sell the property to raise cash. Unfortunately, there’s no big deal.”
Another Moneyist Facebook group member says they want your savings level: “I’m disabled and, as we get older, we have 12 years of disability. We fed 40 people at Thanksgiving, not because we can’t afford it but because most people don’t. We have less than $30 in the bank, a mortgage, a 6-year-old, and a 6-year-old with us. And an air conditioning system or a roof.” will give
Food for thought. Your stamina has gotten you this far. I’m sure you can make it the rest of the way.
Don’t miss: I am a senior who can barely survive on $1,300 a month. I can’t live on $1,000.
Previous columns by Quentin Fottrell:
‘I’m getting increasingly angry’: My husband of 10 years has $1 million and a car worth $200K. Why doesn’t he pay me?
‘This sounds like an opportunity’: I’m 55, make $78,000 and have no children. My mother gave me 10,000 dollars. 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 got $10,000. How do I invest it?
