Unclear to me if they are currently spending their SS income, or if they haven't started yet, or if they have saved any of their past SS incomes.A family member has very little retirement savings (less than $20k), owns an above-average home, not paid off yet, spouse has a small pension that just covers health insurance. She is 70 years old, and trying to get situated for retirement. The plan is to continue working for several years (I'm guessing 5+, but haven't asked), and save all of the social security payments safely for retirement.
Agree with the earlier posts, time to consider downsizing the home. This brings up the whole decluttering scenario and getting rid of stuff they have but don't use, but they may be emotionally attached to as either memories or emotional support blankets. Garage Sale time...
For her consulting business, don't be surprised if the consulting work drops off pretty dramatically as one ages, for lots of reasons.
If they have saved only $20k to date, they potentially have a spending problem. Unless they recognize they have to change (no credit cards, no car payments, get rid of cable TV, don't purchase spur of the moment Amazon items, etc.), retirement balances will quickly go to zero.
If they qualify, they should start using a Food Bank as a resource for low income couples.
For $20k, where-ever it currently is, place it in MM funds asap to get a respectable (currently) interest rate, possibly at Vanguard. No risk investment (other than fluctuating interest rates). The disadvantage of CDs for only $20k is that the money is pretty tied up, and not readily available for emergency costs, such as additional medical costs. It can be done, I just don't think they are currently worth tying up the money for long periods.
IF they REALLY want to invest some moneys, the Vanguard PAS is a good low cost starting point. However, investing involves risk, and possibly losing a good portion of their funds (I've lost considerable amounts several times, but eventually it recovered). With only $20k to invest, losing any % would be very unsettling.
Statistics: Posted by Colorado Guy — Mon Mar 11, 2024 6:20 pm — Replies 7 — Views 740