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Help Me Retire: I’m 60, a school bus driver and bartender with $165,000 saved for retirement and a spender mentality – ‘is there any hope for me?’

Dear MarketWatch, 

I turned 60 in November. I’ll be the first to admit I spent my money as fast as I made it most of my life. I always felt like everything would just work out in the end. Somehow. 

I go through cycles of paying off debt (mostly credit card) then behaving for a while, then slowly accumulating more debt. My credit score is in the low to mid 700’s. I don’t own anything except a 15-year old car. I never bought a home because taxes scared me. I never married so it’s just me, no pension or spousal Social Security to look forward to. I rent a house from my brother who gives me the ‘family discount’ and for that I’m very grateful. My rent money only pays about 3/4 of his property tax.  

I was a career bartender from ages 21-51, lots of cash that I spent on a lot of vacations. I am not a saver and have always lived paycheck to paycheck. Fortunately my former boss started a 401(k) for us and I have around $150,000 in that. I now drive a school bus – which is technically part time although I get 30+ hours a week, plus I still bartend on the weekend. I started a 401(k) with the bus company about four years ago along with a Roth IRA. Between the two I have around $15,000 right now. I’m pretty sure I’m going to have to work until I drop, but is there any hope for me? 

I get to the point where my credit cards are paid down and I have money to put aside. I have a very small nest egg of around $1,000, nowhere near what I should have. I try to add to it but I am currently in the cycle of running my credit cards up again. Partly because being a paycheck to paycheck kind of gal, I got Covid and was off work for 10 days. Having three weeks off at Christmas did not help. I hurt my foot and then my knee, so I have missed a bit of work here and there. It’s one step forward and three steps back.

I see on here people with $1 million or more set aside for retirement and they’re concerned. I don’t live lavishly by any stretch. I’m glad I traveled when I did because I can’t do much now. I just want to be able to pay my bills, take care of my dog. I don’t need a lot. My brother, who I rent from, is six years older than me and has told me that he has no intention of selling the house so I don’t have to worry about moving. He also left it to me in his will, but hopefully that’s something I won’t have to think about for many years to come. Do you think I will ever be able to retire? I like my job very much, but realistically if my health goes south or I can’t pass the tests to keep driving then I am in a pickle.

See: I retired at 50, went back to work at 53, then a medical issue left me jobless: ‘There’s no such thing as a safe amount of money’

Dear reader, 

First of all, there’s always hope. You may not feel like you’re in an ideal situation, and you may wish you could have changed a few of your ways leading up to your 60s, but there’s still plenty of time for you. Aside from the fact that nobody ever really knows when they’ll retire – they may have all the plans in the world laid out, but sometimes, the unexpected happens – you have many years ahead and you seem dedicated now to turning things around. That drive makes a huge difference. 

I’d like to start with your spending habits. You are clearly aware that you’re more of a spender than saver, and you can even highlight a few recent examples of where things went wrong, like during the time you were off from work around the holidays. Look carefully at what you’re spending on. If they’re necessities, that’s one thing. You need groceries, toilet paper, light bulbs, so on. But if they’re impulse buys, such as after perusing Amazon’s latest deals or your favorite clothing store online, you should try to course correct now. We’re all guilty of an impulse buy here and there, but if you are aware that you just naturally gravitate towards that kind of behavior, you’ll have an easier time curbing it. 

There are plenty of tips out there to try and slow a spending habit. If you get a lot of promotional emails in your inbox boasting of the biggest discounts and once-in-a-lifetime opportunities, unsubscribe from those emails ASAP. If you need clothes, or some sort of gadget, you can search for it when you need it and look for the best coupons. If you tend to spend money you don’t have for items you don’t actually need – or even necessarily want – prevent it from happening. (Again, I think we’ve all been there before!) 

Then analyze your spending. Given what you’ve told me, I’d suggest you get statements from as far back as December for your credit or debit cards, since you mentioned you had that problem around Christmas. Look at every single line item – the store and the amount especially, and ask yourself if you remember what you spent on, if it was really worth it, or if you can maybe cut back. While doing this exercise, you may find you’re paying for stuff you actually have no use for, like a magazine or streaming service subscription, or you may find that you’ve been spending so much money on things you don’t care about that you’re not able to put money toward the stuff you actually care about, including your retirement savings. If after this, you see you have even more money you can play with than you thought, set up another savings fund, such as one for travel. Depriving yourself of things you enjoy will not make you a better saver.  

Check out MarketWatch’s column “Retirement Hacks” for actionable pieces of advice for your own retirement savings journey 

So those are a few backward-looking tasks to understand where you’re coming from and why you’re in this predicament. Now let’s look ahead. 

You need to get a handle on how much money comes in, and how much money goes out. Count up all of your income, and if it’s variable because of the bartender job, be conservative and pick an average on a regular or slow day (not one of your best or busiest days). Then write down all the things you actually have to spend on – rent, groceries, utilities, medicine, and so on. See what you have left over and before you go trying to spend it on fun things, earmark a significant portion for your retirement savings. You can stash it in your IRA or in an investment account. If you have a lot more excess than you expected, you can ask your company to increase your 401(k) contribution, which may be an extra bonus for you as that money would then not show up in your paycheck (thereby reducing an urge to spend it on something frivolous). 

Another bonus? If you’re low-balling your income, and then find yourself with a bunch of good days at your bartender job, have a plan for how you’ll spend that extra money you didn’t intend to receive. Maybe put half toward retirement, a quarter towards another savings goal and the rest toward your next month’s bills for example. You can break that up however you want, of course. 

Also, you said your credit card balance is starting to tick in an upward trend again – stop what you’re doing and see if you can take a break from charging things. Do you have some groceries in the back of your cabinet that are still good but you just haven’t touched? Instead of going out for dinner with friends, can you plan to hang out at home with each person bringing something delicious to share? Of course, the necessities you can’t avoid – if you need your medication, or you have important doctor appointments or you have just no food in the house, then do what you have to do, but if you can stretch out the time between now and when you next charge something discretionary on your credit card – even if it’s just for a week – you’ll feel empowered. 

Also see: I’m 66, single with no family, and am afraid of becoming incapacitated with no one to handle my affairs – who should I turn to?

There’s not much you can do about how much you’ve saved over the last 40 years, but you can keep on top of that nest egg by making sure it is invested appropriately. You need that money to last you as long as it possibly can, which means it needs some risk to earn returns, and some fixed assets to protect from major downturns. I suggest working with a financial professional, even if it’s only for a few hours, to do a financial check-up. They’ll be able to assess how you’re invested and what you can do to keep that money growing. 

Also, you’re too young to claim Social Security now, but if you want a little more light at the end of the tunnel, make an online account with the Social Security Administration’s website so you can see an estimate of your benefits at various claiming ages. You might want to claim as early as you can to get extra cash flow, which would be 62, or you might find you can afford to hold out a little longer while you’re working, in which case, you’d see how much you’d get later. If you can, try to plan out when you’d claim Social Security and how you’d spend that income – if you’re able to rely mostly on your benefit and just a little extra cash, you can draw down less from your retirement assets, which will give more of your retirement savings an opportunity to continue to grow. 

Remember, there’s no right answer for when to claim – it is completely based on personal preference. But it is important to weigh all of your options, and a financial professional could help with that. 

As for right now, do everything in your power to “behave” as you said. Changing habits can be very hard, and it takes weeks or more to see any meaningful difference, but you seem very capable of making it happen. During the pandemic, many households altered the way they spent money, and those changes seem to be sticking, one survey found

Keep thinking about what each dollar can do. When you want to splurge on something, or you’re seeing extra cash after paying your bills, look at each dollar as a chance to increase your retirement savings, which will give you the ability to live comfortably in your old age, maybe eventually leave your job before you “drop” and worry less about paying your bills in the future. Good luck! 

Readers: Do you have suggestions for this reader? Add them in the comments below.

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

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