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Help Me Retire: ‘Retirement? How?’ I’m 65, have $0 saved and am coming out of bankruptcy.

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Alessandra Malito 

Dear MarketWatch, 

I’m 65 years old, self-employed in pet care — so not big earnings. I earned $36,000 before COVID. I really have zero in savings. No 401(k). I rent my apartment and lease a car. 

The Bad: I went through a bankruptcy in 2011 due to my husband leaving me. That is set to fall off my record in July this year. My credit score now is around 726 and 730. I think it will go up after the bankruptcy clears.

But now what?  My Social Security will probably be about $1,100-$1,200 a month at Full Retirement Age. This is impossible to live on in this country.

I was an actor for many years, and now take care of doggies (which I love) but it’s low pay. In other words, my skill set is paltry in light of today’s economies and technologies. 

The Ugly: I tried to finish college and finally get my degree about 15 years ago, but the educational counselor was so negative about my chances that it was discouraging and depressing, so I let go of that intention. Now I think, sadly, she was supposed to encourage and guide me. 

The Good: This year, I finally paid off $20,000 in credit card debt that had been weighing me down, by doing 0% interest balance transfers for the past few years. So I now have very little credit card debt which I pay off in full every month to avoid Interest charges.

Any helpful suggestions on how to lift myself into a better financial situation? 

Thank you.

JV

See: I’m a 74-year-old widower in a five-bedroom house just making monthly payments and no retirement nest egg — should I sell or rent out my home?

Dear JV, 

Please don’t be too hard on yourself. Let’s start with the fact that you’ve gotten your debt in order — that is a huge accomplishment. 

You’re right to question how retirement could possibly work given your situation, but if you’re flexible with when and how you’ll retire, there is absolutely hope in achieving a better financial situation. 

I say “flexible” because if you’re willing to work a while longer and maybe take on some side gigs or learn a few new skills, you can bring in more income as well as let your Social Security benefits build up a bit more before you claim. 

“It would be great if she could continue to work until age 70 to maximize her Social Security benefits,” said Stephanie Trexler, chief executive officer and a certified financial planner at Golden Goose Wealth Planning. You mention your pay isn’t substantial now, and I’m sure the pandemic didn’t help, but there’s nothing wrong with following your passion of pet care and earning a little extra on the side. This could be by dog walking or pet sitting, or teaching obedience classes (especially since many people who adopted pups during the pandemic may need a little help training their furry loved ones when they go back to an office). You could even use an unrelated skill like sewing to make bandanas for puppies you then sell on Etsy or local craft shows, Trexler suggested. I’ll dive into this a bit further later on. 

First, let’s briefly discuss what needs to happen. There are two primary ways for you to improve your financial situation, said Cody Garrett, a certified financial planner: increasing your income and decreasing your expenses. You’ve gotten your debt under control, and once that is completely paid off, you will likely have more cash flow available to you. 

Another exercise is to look closely at where your money is going every month. If you’ve already curbed much of your discretionary spending, that’s fine, and if you still treat yourself to a few experiences or things you enjoy (take-out coffee, a dinner out or maybe a new shirt at your favorite store, for example), that’s perfectly OK. This exercise should not be about stripping yourself of what you enjoy, but instead ensuring you’re spending money on what you value and balancing present-day spending with saving for the future. 

Try to have at least three months’ worth of expenses saved to provide a cushion, said Leyla Morgillo,  a certified financial planner at Madison Financial Planning Group. Try to find a local office of aging to see if there are any assistance programs you qualify for as well, she suggested. Offices of Aging can point you in the right direction for help on health, employment, housing, food and meals and so on. A simple Google search of “office of aging” with the name of your state or county could provide you with these results. 

Now let’s talk about Social Security. Delaying Social Security is a surefire way to see more money in those monthly paychecks. The longer you wait, the higher the benefit paycheck — roughly 8% each year you delay up until age 70. 

If you need to claim Social Security as soon as possible — something many Americans must do — then that’s what you need to do. So many people ask themselves if and when they should begin receiving their Social Security benefits, and there are so many factors to consider, such as financial need, age, life expectancy and so on. The greatest question in your particular situation, however, may be this: “Can I meet my lifestyle expenses right now without Social Security?” 

If the answer is yes, consider holding off. It doesn’t have to be until age 70 (even waiting a year or two will gift you a slightly higher benefit). If the answer is yes, but only temporarily, try to at least wait until your Full Retirement Age, which would be around 66 years old (assuming you were born in 1955 or 1956). 

Before you claim, reach out to the Social Security Administration, which can calculate your benefits and provide possible alternatives. For example, check to see if you’re eligible to claim spousal benefits based on your ex-husband. These rules can seem overly complicated and confusing, but if you two were married for more than 10 years, you might be able to receive benefits based on his record, Garrett said. If so, and you applied for your own benefit, you’d get yours plus an additional amount if your ex-husband’s benefits are higher. 

If your ex-husband was born before Jan. 2, 1954 and has already reached his own Full Retirement Age, you could instead choose to receive just his benefit while still delaying your own, Garrett added. This is where the Social Security Administration can help you make sense of your options. 

Also see: Confused about Social Security — including spousal benefits, claiming strategies and how death and divorce affect your monthly income? 

Keep in mind, these are all very introductory steps for you to take, but they could help you improve your current situation. 

There’s just one more thing I’d like to add before I end this letter, and it has to do with what you said about your experience pursuing additional education. I’m sorry to hear what the educational counselor said to you, and you became discouraged. But just because that one person was negative doesn’t mean you have to give up your goals entirely to pursue an education or extra skill sets. 

If college classes are too expensive right now, there are other ways to pick up skills. YouTube is an excellent resource for learning. There are so many wonderful, free tutorials to pick up a few lessons. Take, for example, Trexler’s suggestion to sew puppy bandanas. If you didn’t know how to sew, you could likely figure it out after following a reputable, helpful guide on YouTube. 

There are also a plethora of websites that offer free classes. AARP curated a list of sites that offer free content from a wide range of sources, including top-notch universities. If you’re willing to work on these classes during your free time, that would open up a ton of opportunities to make some extra money — at your current job or in the form of a side hustle. 

“Do not be discouraged about not having a new skill set,” Garrett said. “Discover ways to translate your current strengths that made you a talented actor and a responsible dog sitter into a new job or career opportunities.” 

Have a question about your own retirement savings? Email us at [email protected]

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