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

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I turned 60 in November. I’ll be the first to admit that I spent my money as fast as I earned it most of my life. I always had the impression that everything would work out eventually. Sort of.

I go through cycles of paying off debt (mostly credit cards), then I behave for a while, then slowly accumulate more debt. My credit score is in the low to mid 700s. I own nothing but a 15 year old car. I never bought a house because taxes scared me. I never married, so that’s just me, no spousal pension or social security to look forward to. I rent a house from my brother who offers me the “family discount” and for that I am very grateful to him. My rent money only pays about 3/4 of his property tax.

I was a career bartender from 21 to 51, lots of money I spent on many vacations. I am not a saver and have always lived paycheck to paycheck. Luckily my old boss started a 401(k) for us and I have about $150,000 in it. I now drive a school bus – which is technically part time although I receive more than 30 hours a week, in addition I am always a bartender on weekends. I started a 401(k) with the bus company about four years ago with a Roth IRA. Between the two, I have about $15,000 right now. I’m pretty sure I’ll have to work until I drop, but is there any hope for me?

I’m getting to the point where my credit cards are paid off and I have money to put away. I have a very small nest egg of about $1,000, far from what I should have. I’m trying to add to it but I’m currently in the cycle of reviving my credit cards. Partly because being a paycheck to paycheck girl, I had Covid and was off work for 10 days. Having three weeks off at Christmas didn’t help. I injured my foot and then my knee, so I missed a bit of work here and there. It’s one step forward and three steps back.

I see people here with a million dollars or more put aside for retirement and they are worried. I don’t live lavishly. 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’m renting from, is six years older than me and told me he has no intention of selling the house, so I don’t have to worry about moving. He left it to me in his will as well, but I hope that’s something I won’t have to think about for many years. Do you think I will ever be able to retire? I like my job very much, but in reality, if my health deteriorates or if I can’t pass the tests to continue driving, I’m in trouble.

To see: I retired at 50, went back to work at 53, then a medical problem left me jobless: “There is no certain amount of money”

Dear reader,

First of all, there is always hope. You may not feel like you are in an ideal situation and you may wish you had changed a few of your habits until your 60s, but there is still plenty of time for you. Apart from the fact that no one ever really knows when they’ll retire – they might have all the plans in the world in place, but sometimes the unexpected happens – you have many years ahead of you and you now seem determined to change things. This player makes a huge difference.

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

There are plenty of tips for trying to slow down a spending habit. If you receive many promotional emails in your inbox offering the biggest discounts and unique opportunities, unsubscribe from these emails as soon as possible. If you need clothes or some kind of gadget, you can search for it when you need it and search for the best coupons. If you tend to spend money you don’t have on items you don’t actually need — or even necessarily want — prevent that from happening. (Again, I think we’ve all been there before!)

Next, analyze your expenses. Given what you told me, I would suggest you get statements going back to December for your credit or debit cards, since you mentioned you had this problem around Christmas. Look at each item in the line – the particular store and amount, and ask yourself if you can remember what you spent, if it was really worth it, or maybe you can cut back. As you do this exercise, you may find that you’re paying for things you don’t actually need, like a magazine or streaming service subscription, or you may find that you’ve spent so much money for things that don’t interest you. that you are unable to devote money to what is really important to you, including your retirement savings. If after that you see that you have even more money to play with than you thought, create another savings fund, like one for travel. Depriving yourself of the things you love won’t make you a better saver.

Read the MarketWatch column “Retirement Hacks” for practical advice for your own retirement savings journey

So these are some retrospective tasks to understand where you came from and why you find yourself in this predicament. Now let’s look ahead.

You need to know how much money is coming in and how much money is going out. Count all of your income, and if it’s fluctuating due to bartending, be on the safe side and pick an average over a steady or slow day (not one of your best or busiest days). Next, write down all the expenses you actually have to incur: rent, groceries, utilities, medication, etc. See what you have left, and before you try to spend it on fun things, set aside a significant portion of your retirement savings. You can store it in your IRA or in an investment account. If you have a lot more surplus than expected, you can ask your company to increase your 401(k) contribution, which can be an added bonus for you because that money would then not show up on your salary (thereby reducing the urge to spend it on something frivolous).

Another bonus? If your income is low and you then find yourself having a bunch of good days at your job as a bartender, have a plan for spending that extra money you didn’t intend to receive. Maybe put half towards retirement, a quarter towards another savings goal and the rest towards your next month’s bills for example. You can divide this however you wish, of course.

Also, you said your credit card balance was starting to increase again – stop what you’re doing and see if you can take a break from billing. Do you have groceries in the back of your cupboard that are still good but you just haven’t touched? Instead of going out to dinner with friends, can you plan to spend time at home with each person bringing something delicious to share? Of course, the necessities you can’t avoid – if you need your meds, or you have important medical appointments, or you just don’t have any food at home, then do what you have to do, but if you can extend the time between now and the next time you charge your credit card for something discretionary, even if it’s only for a week, you’ll feel more empowered.

Also see: I’m 66, single with no family and afraid of becoming unfit without someone to manage my affairs – who do I talk to?

You can’t do much about how much you’ve saved over the past 40 years, but you can keep control of that nest egg by making sure it’s invested appropriately. You need that money to last as long as possible, which means it takes some risk to generate returns and capital to protect against major downturns. I suggest working with a financial professional, even if only for a few hours, to do a financial checkup. They will be able to assess how invested you are and what you can do to grow that money.

Also, you’re too young to qualify for Social Security now, but if you want a little more light at the end of the tunnel, create an online account at the Social Security Administration website so you can view an estimate of your benefits to various claimants. age. You might want to claim as soon as possible to get extra cash flow, which would be 62, or you might want to afford to hold out a bit longer while you work, in which case you’ll see how much you get later. If you can, try to plan when you’ll claim Social Security and how you’ll spend that income — if you can rely mostly on your benefits and just a little extra money, you can get less out of your retirement. assets, allowing more of your retirement savings to continue to grow.

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

For now, do everything in your power to “behave” as you say. Changing habits can be very difficult and it takes weeks or more to see a significant difference, but you seem very capable of doing it. During the pandemic, many households have changed the way they spend money, and those changes appear to be persisting, a survey found.

Keep thinking about what every dollar can do. When you want to splurge on something, or see extra money after paying your bills, consider every dollar a chance to increase your retirement savings, which will give you the ability to live comfortably in your old age, possibly leaving your job before you “give up” and worrying less about paying your bills in the future. Good luck!

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

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