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I’m a 57-year-old nurse with no retirement savings and I want to retire within seven years. What can I do?

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I am 57. I have saved nothing. It always seemed like there would be time but…here I am. I’m a Registered Nurse and make $80,000 a year. I’m thinking I could work the next 10 years and save half my salary — five more years full time and two more years part time, at which time I will be 64. That would get me about $400,000 to retire. Not much. I am tired — nursing is a hard job. I am a nurse manager but it is a mentally stressful job. I need a plan.

My expenses are about $3,500 per month, including a $1,600 mortgage payment and $400 car payment. I have $5,000 in credit card debt.

Thanks again for your help

M

See: I’m 52, won’t live past 80 and have $1.6 million. ‘I am tired of both the rat race and workplace politics.’ Should I retire?

Dear M,

You are right — this year alone has shown us how difficult — and essential —- a nurse’s job is. I understand how stressful it must be to work in this field, and on top of that be planning a retirement with little savings.

You are not alone in having nothing saved for retirement. Many Americans are nowhere near prepared for this stage of their lives. The good news for you is that you still have time, a job and the ability to work, and you’re being proactive about it now. So you’re already moving in the right direction!

Now for the not-so-good news. You may have to readjust your expectations, for what retirement looks like, how much you’ll have saved for it and potentially when it starts, financial advisers. This depends on numerous factors, of course, such as if your current living expenses will change, by how much, and if you have any additional resources you can tap. But assuming you want to maintain somewhat of the same lifestyle, and you have no other sources of income in retirement, you will have to shift gears just a bit.

I’m not sure how you arrived at the $400,000 estimation. For simplicity’s sake, say you worked full time for the next seven years and saved exactly half of your gross income ($40,000) — that would be $3,333 a month compounded monthly and you’d need a nearly 10% rate of return, which is much more aggressive than the average. Many advisers try to stay conservative in their estimates — some use a 5-7% rate of return, for example. So assuming you saved that much every month for seven years and earned a 5% rate of return, you’d have somewhere closer to $334,000.

But even this calculation has flaws. You wouldn’t have enough for your current expenses, as $3,500 a month amounts to $42,000 a year and we need to account for taxes. “Saving half of that money she is making and living on $40,000, that is probably not realistic,” said Rodney Loesch, a financial adviser at LifeGoals Strategies Group.

All hope is NOT lost, though. Please remember that. “She’s still young (50s are the new 40s) and can catch up if she’s financially disciplined enough to do so,” said Rose Swanger, principal of Advise Financial.

Before we get into how to build a plan, it’s important to remind yourself often “to be kind to yourself,” said Jude Boudreaux, senior financial planner at The Planning Center. “It’s hard when you are looking for a goal you want to accomplish and feel it will be really difficult to get there,” he said. Becoming too stressed about achieving that goal may take you farther away from it, as you might overspend, for example. Perhaps instead of trying to save half of your salary immediately, create smaller more manageable goals, such as $1,000 a month, he said.

First, advisers said, cut down your monthly expenses as much as you possibly can while being safe about it. For some people, this could be as simple as unsubscribing from various television packages or canceling monthly magazine subscriptions. For others, this might be downsizing a home (easier said than done, especially if you own your home), getting rid of a car payment (again, easier said than done if you need your car) and cutting other big-ticket expenses.

“In her case, her savings need to do a lot of the work that investments would have done for someone younger,” he said. You may be surprised at how much you don’t actually need to spend, and reducing these expenses will help you transition into retirement. This exercise is even useful if you intend to cut down costs when you retire, as you’ll already be familiar with your “new” cost of living.

“The sooner she does it, the better off she will be both monetarily in terms of her portfolio, but also psychologically, after she already made the transition,” said Joshua Mungavin, principal at Evensky & Katz / Foldes Financial Wealth Management.

If you’ve already trimmed your budget, the next step is to look at the length of your remaining working years. I know you said your plan is to work full time for another five years and then part time for two more years, but you may have to work longer to amass a sustainable amount of money in retirement, Loesch said. Again, easier said than done and certainly if a job is taxing like yours, but while you have the ability and agility to work, try to capitalize on that time and strength. Unfortunately, not everyone has the opportunity to do so, due to a disability or a layoff, Mungavin said.

Continuing to work has its benefits, though. For starters, you still get employee benefits this way, such as if your employer offers health insurance and you’re not yet old enough for Medicare coverage (which, as I’m sure you know, can get expensive). You also get to accumulate more money in investment accounts. If your employer offers a retirement plan, and especially if it has a contribution match, take advantage of that for as long as you can.

If you really want or need to get out of your current job though, there are alternatives. You have incredibly useful and necessary skills as a Registered Nurse, and you can use that knowledge and skill set to apply to other jobs, even if it’s part-time or gig work. “I understand nursing is challenging and may not be feasible,” said Marguerita Cheng, chief executive officer of Blue Ocean Global Wealth. “Perhaps turn your hobby into an alternative source of income in retirement.”

If you want to stay in the nursing field, some employment options include administrative work in physician offices, consulting or research roles for medical facilities, patient educators for pharmaceutical companies and even teacher jobs at private or public educational institutions, according to Nightingale College.

Working longer also means your Social Security benefits will continue to grow. The longer you wait to claim Social Security, the more money you will get. Comparatively, if you were to claim before your Full Retirement Age, you’d see a reduction in your benefit. If you are 57 now, your FRA is likely around 67 years old. You can check your FRA as well as your expected benefits at various ages and your employment history on the Social Security Administration’s site.

Speaking of Social Security — think carefully before you decide to claim it, especially if you choose to leave the workforce in your early 60s and intend to have that money offset your savings deficit. And of course, if you can afford to wait. Beneficiaries don’t always realize that when they begin to claim Social Security benefits at 62, which is the earliest a retiree can do so, or anytime before their FRA, they’re going to get a permanent reduction in their benefits. By creating an account with the Social Security Administration, and checking what your estimated benefit will be, you can also get a picture as to how much that money will really help you live comfortably in retirement.

Also, if you planned to take Social Security while working part time, a portion of your benefits will be withheld. In 2020, the base earnings threshold for people who claim Social Security before the year they reach their FRA is $18,240 — for every two dollars you earn above that level, $1 is deducted. You do eventually get that money back in the form of benefit payments after you reach Full Retirement Age, but who wants to willingly go through that stress if they don’t have to? Try to avoid it if you can. Here is more information on that rule.

Also see: I’m 63, a widow and lost my job because of COVID. I don’t have much in savings and feel lost. What can I do?

Here are some other suggestions advisers had:

• Look into the APR on your credit card debt. If it’s high (some could be 20% or more, prioritize paying that down alongside ramping up retirement savings). If it’s much less, such as 3% or 5%, keep tackling the debt repayment but it can be much lower on the priority list, Mungavin said.

• As for the types of investments you use, look toward target-date funds, which allocate a portfolio to an expected retirement date, Cheng said. “I don’t want her to allocate her dollars in an aggressive manner, because that can backfire for someone who is not comfortable investing,” she said.

• If an employer-sponsored retirement account is not available to you, fund an individual retirement account. Here’s more on that.

• Because you own a home, you may also be able to tap into the equity within it one day through a reverse mortgage. This can be a complicated process and it’s important to vet the professional you work with. Here’s more information on that.

• Find a financial planner, who can walk through the specifics of your situation and help you make financial adjustments where needed. You don’t need to work with them regularly — some advisers help clients create a financial plan they can follow on their own. There are also advisers who do pro bono work, meaning they don’t charge and consider the time volunteering, Loesch said. You could reach out to the local chapters of financial planner organizations, such as the Financial Planning Association or NAPFA, to see if that is an option for you. “At this point, to create a workable plan, she really needs a detailed retirement projection (done by a fiduciary professional, not a calculator on the internet) to determine how much she needs to save and how those savings should be invested, in order to set her up for success,” said Gretchen Behnke, founder and financial planner at Pearl Financial Planning.

And meanwhile, just keep putting in the work and try to stay positive.

“By facing her situation and preparing to change her behavior, she has already made an essential first step,” said Carol Fabbri, founder and executive director of Fair Advisors Institute. “So many people are in this situation and prefer to hide their concern instead of facing it.”

Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com



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My husband doesn’t get along with my son. I brought most of the wealth into our marriage. How do I split my estate?

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Dear Quentin,

How do couples typically handle their estates in a second marriage? My husband and I have been married for seven years, and it is the second marriage for both of us. I have one adult child from my previous marriage; he has no children.

I brought the majority of our wealth to our marriage, including almost $1 million in my 401(k) and a nice home that is almost paid off; otherwise, we have no debt. My husband and I bought a second home together. We work hard to fund our new 401(k)s, and own a successful business together.

I am turning 65 this year, so estate planning is long overdue. My husband is five years younger than me, and we are both in very good health. We have two issues facing us: I see our retirement as living very comfortably on the monthly income generated by our 401(k)s, pension, Social Security, etc., and leaving whatever may be left to my son.


‘The other issue is that my husband no longer gets along with my dear son at all, and feels no obligation to get along with him.’

I am not interested in scrimping, but I want to be able to have enough money to last us until age 90 (or beyond) by not touching the principal. My husband is more interested in dipping deep into our savings, and living it up in retirement while we are young enough to enjoy it.

The other issue is that my husband no longer gets along with my dear son at all, and feels no obligation to get along with him, to the point that neither one wants anything to do with the other. As far as he is concerned, my son doesn’t meet his expectations, and so deserves nothing from me and certainly nothing from him.

I want my estate planning to be fair to both my new husband and my son. How do people typically handle this type of quandary? I think that I need to create some type of trust to pass on my share of our estate to my son. My pre-marriage assets involved my son as I pursued my graduate degree through night school and worked long hours throughout his childhood.

Second Wife

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com.

Dear Second Wife,

Don’t allow your husband’s feelings toward your son to influence your estate planning.

Your relationships with your husband and your son and your own plans for retirement are all fair game when making decisions about your estate, but your husband and son’s fractured relationship is their business, not yours. You worked hard for this money, and your son is your legal heir. Any effort by your husband to spend all of your savings and fritter away any inheritance that you intended to leave to your son should be resisted at all costs.

You have worked too hard your entire life to compromise your plans for a comfortable retirement where you have money set aside for long-term medical care insurance, unforeseen emergencies and/or your son. If you jointly own your home, you can leave your half to your son in your will, and specify it can only be sold after your husband passes away.

If you own the home, you can give your husband a life estate. Your son would pay capital-gains tax on the value of your home when he sells it, and not when you bought it. You could also make your son the beneficiary on your life-insurance policy, and/or gift him a certain amount of money per year to see how he manages and spends that money.

Figure out what is fair to yourself first before moving on to what is fair to your husband and your son. It’s OK to put your needs first. I caution against your dipping into savings at a rate that is beyond your own risk tolerance.

Ultimately, you are entitled to leave all other separate property to your son when you die — and, along with a financial adviser, set up a trust with that in mind for you, your husband and your son. Not necessarily in that order.

The Moneyist: ‘I cut his hair because he won’t pay for a haircut’: My multimillionaire husband is 90. I’ve looked after him for 41 years, but he won’t help my son

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These money and investing stories, popular with MarketWatch readers over the past week, can give you a better understanding of bitcoin and other cyrptocurrency, and help you figure out if digital currency has a place in your portfolio alongside stocks, bonds and other traditional assets.

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