Saturday, October 6, 2012

What am I Going to Do When I'm Old?

This is one thought that has been swishing around my mind lately.  I feel much more financially vulnerable since I haven't worked in nearly two years so this thought has given me some concern.  Here's the problem (in bullet points, of course):

  • I don't have a pension, an IRA, or a 401k.
  • We are living on hubby's pension and Social Security plus my freelance income right now.
  • Since I have been self employed for nearly 20 years it has been my responsibility to set up some kind of retirement account for myself (which I haven't done).
  • Hubby is 20 years older than me.
  • I won't qualify for Social Security for another nearly 20 years (and I highly doubt it will be there in another 20 years).
  • The military has a life insurance plan but we opted out of it when hubby retired (I was 20 at the time, what did I know about life insurance?).
  • I believe that if he passes before me I would receive some sort of survivor benefit of about $50,000 (I definitely need to research this).
  • If I go before him then no problem(!).
  • Right now if we want to get term life insurance policies for us it would be pretty expensive.
  • I have seen a half dozen women in similar situations when they came to me for help after their husbands died and they had been homemakers with no job skills.  They were too young for Social Security and their kids were already grown so they didn't get any income on behalf of the kids when the wage-earner died.  These women have ranged from destitute and homeless to owning some assets but having no income so they had to liquidate their assets (like a house) in order to have any money.
  • I don't want to be homeless and destitute and widowed and hopeless!
  • Of course I can work which would give me a bit of financial security (but with having no retirement plan I will be working for the rest of my life! eekkk).
  • I could start saving money right now in an IRA.  But according to this retirement calculator, in order to have $1 million dollars at retirement at 65 I would need to contribute nearly $27,000 per year (!!!).
  • I have no kids (and wouldn't feel right imposing on my step kids or nieces and nephews to take me in when I am old).
  • Gah.  I may end up like the 75%.  

A couple of things in my favor:

  • We own a house.  It remains to be seen if it becomes an asset or a liability.
  • I can live on very little income.
  • I am not opposed to doing this.
  • Or this.


  1. I had to laugh when I read this, not because it is a funny issue, of course it is a serious issue but because of the similar thought process on a serious issue. I have read your first not opposed article before she is amazing! I have also read a lot on David Suelo and a few others even.

    I blog mostly over at my Poor to Rich a Day at a Time blog but commenting on my USA on Horseback link as it primarily has us giving up money in 2015 and treking across america on horse. I thought you may enjoy it, as it certainly can be easier sometimes to entertain the idea of no or very little money than always trying to figure out how to get more money!

    Good luck on what you figure out, you are thinking about it and that is an important first step!

  2. Scary stuff. That NY Times article you linked to was excellent. Canada has just upped its Old Age Pension eligibility from age 65 to age 67. I was also just reading an article saying most people don't choose the date of their retirement - it is often determined by a lay-off, or having to leave work for either health reasons or care-taking responsibilities. Lately I have cranked up my savings, but I need to evaluate my "guy" (financial adviser)!

  3. April, it sounds like you need a serious consultation with Mr Money Mustache!

  4. It isn't too late to start now, and every penny you contribute helps. That 1 million dollar goal may not be the right one. Don't be one of those students who refuses to turn in an imperfect paper and ends up getting a 0% instead of a 60% (or 80%). There's a big difference!

    Maybe try aiming for 5K in an IRA this year and move on from there.

  5. I agree, no savings amount is too small (spoken as a woman who is saving from scratch). I believe that you would be able to access your husband's social security-Thats over half of what I live on (at age sixty, granted). I think that a house can be an assett IF the taxes are not too high and IF it is more recent with less maintenance. That said, even as I look at condos, a house is a bigger asset if you have a yard on which you can grow thuings and so on and so forth. It will never work for me, but you could consider sharing a house-getting a roomie or letting out a room. I would seriously research life insurance now, and depending on his health look at the possiblity of rebuying. Does your huband have an ira or 401K-you dont address that. I'm assuming you already have an emergency fund (which I dont and am rebuilding). If so, then I agree with the above-even if its only two thousand a year in a CD, that is something.

  6. If you are 60 or older if/when your hubby dies, you can collect SS as a widow. Of course the earlier you collect it, the less you get.

  7. Thanks everyone! I know I need to start a retirement savings account, even if it is just a little bit of money at a time--that will be next on my to do list!