I'm 61, Retired, and Struggling to Save My $6,150 Monthly Check

Understanding Your Financial Situation

You are a 61-year-old retired, divorced mother of a 24-year-old daughter who is currently navigating her own financial journey. Your daughter has a college degree and is working full-time at $20 an hour. She is also contributing $300 per month to a retirement fund, which you match one-to-one. Additionally, she has $5,500 in savings from working during college. She drives your 2016 car, which is paid off, and you assist your sister with $300 to $500 monthly due to her rare genetic disease.

On your end, your home is paid off, and you have $500,000 in a 403(b) account. You also have a $24,000 loan on a 2025 car with a 4.24% interest rate over 60 months. Each month, you receive a taxable $1,600 retirement check that covers your $1,065 health insurance premium, which ends at age 65. In addition, you receive a non-taxable disability check for $4,300 per month, and your brother pays you $250. However, you admit that you often spend your money without a clear plan and are seeking guidance.

The Importance of a Budget

Before diving into more complex financial planning, the first step should be to create a budget. A budget can help you track your expenses and identify areas where you might be overspending. According to Bill Haydon, a financial adviser at Wells Fargo Advisors Financial Network, a budget can help smooth out your spending and allow you to see where your money is going. This includes identifying hidden costs such as subscriptions or gym memberships that may be draining your resources.

There are several budgeting tools available, including apps like Empower, Monarch Money, and Mint by Intuit, which can help streamline your expenses. These tools can provide insights into your spending habits and offer suggestions for improvement.

Working with a Financial Professional

If you decide to seek professional help, there are several types of financial professionals who can assist you. A certified financial planner (CFP) could be an excellent choice, as they are trained to create comprehensive financial plans that align with your goals. They can help you manage your retirement funds, plan for rising healthcare costs, and ensure that you can support your daughter and sister without compromising your own financial security.

Financial coaches may also be useful, especially if you need help with tactical spending decisions. However, it’s important to note that financial coaches typically aren’t fiduciaries and may not have the expertise to handle more complex planning needs.

Choosing the Right Financial Planner

When looking for a financial planner, consider the following:

• Fee-only planners: These professionals charge based on their time rather than a percentage of your assets. They are often more transparent and focused on your best interests.
• Fiduciary responsibility: Ensure that the planner you choose acts as a fiduciary, meaning they are legally required to prioritize your interests above all else.
• Comprehensive planning: Look for someone who offers a full range of services, including investment advice, retirement planning, and estate planning.

It’s also worth considering whether you want a planner who offers pro bono services or works with lower-income clients. Many CFPs are willing to work with individuals who have unique financial situations, especially those with substantial assets like your $500,000 in a 403(b) account.

Additional Considerations

As you approach Medicare eligibility, it’s essential to understand your Social Security benefits and how they interact with your disability payments. You may want to review your award letter to determine the best claiming strategy. Additionally, if your daughter continues to face health challenges, you may want to explore setting up a special needs trust to ensure her long-term care.

Finally, don’t hesitate to reach out to family and friends for recommendations or conduct online research to find affordable financial planning options that suit your needs and style. With the right guidance, you can create a financial plan that supports both your current situation and your future goals.