I’m Almost 70 and I Have Nothing Saved for Retirement. My Next Move Could Make or Break Me.
Slate · L · trust 38/100
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I’m 67, and was a single parent most of my adult life, living paycheck-to-paycheck while juggling multiple jobs. I went to college late in life, and I now have a Master’s degree and hold a senior leadership position in my primary job. Now I’m making more money than I’ve ever made.
I still have a side hustle and recently started receiving survivor benefits from Social Security. For the first time in my life, I’m making $200,000 per year (from both jobs plus the survivor benefits ) and have good credit. I hope I’m able to work until I’m 72. I’ll have $4,750 each month in Social Security when I retire and nothing else. I’m waiting until age 70 to claim Social Security so I can get the maximum benefit. My plan is to either then buy an inexpensive condo (under $400,000) and come close to paying it off in four years by making extra principal only payments or keep my current rental ($3,000 per month) and just put as much savings away as possible.
Having a secure place to live once I’m on a fixed income is super important to me, but is it too risky to sink every penny I make in the next few years into a condo?
In a way, you’re trying to balance two big goals at once. You want housing security, but you also want financial stability down the road. Plus, you have a student loan, so maybe that’s three big goals. So the question is, how do those goals fit together?
Let’s look at what your financial life would look like if you buy a house or condo and aim to pay it off in four years. If you stretch your budget and put every penny toward the mortgage, the benefit is clear: You’d eventually own the house outright, with no mortgage payment down the road. That means when your own benefits kick in, which you say are $4,750 month, your money will go further. On the other hand, a home that’s paid off gives you housing security, but it doesn’t give you any liquidity.
The problem is, this plan only works if everything goes perfectly for the next four years. That doesn’t leave much room for anything to go wrong. Plus, if you’re scrimping and saving to put every last dollar toward the mortgage, you won’t have room to save for emergencies, unexpected medical expenses, or anything else that might come up. And don’t forget about HOA fees, property taxes, and maintenance. That leaves you stretched very thin, and I worry it could put you in a precarious financial position, especially down the road with nothing saved and a big student loan. Yes, you’ll have your own Social Security income to help, but it’s important to have some kind of buffer to protect you if something comes up. Put simply, buying a home isn’t automatically the financially safer choice.
One alternative is to continue renting, which I know doesn’t sound appealing right now if the goal is the stability of owning your own home. But renting does give you flexibility. If your kids decide to move or you want to live somewhere else, you’re not locked into one place. And while renting doesn’t build equity, it also means you don’t have to worry about property taxes, HOA fees, maintenance, or repairs—which can free up money to save in the short term. Of course, that depends on the cost of renting—which in your case is high—but a calculator like this one can help you crunch the numbers.
You could also just split the difference and take on a mortgage that you pay off sooner than a standard 15–30 year time frame, but not as aggressively as a four year one (10–15 years, maybe?). That way, you still own your home, but you’re also saving something in the process.
You should absolutely talk to a Certified Financial Planner who can walk through the details of each scenario and show you versions of what each plan would look like. Your $200,000 student loan should be a part of the conversation, too, whether that means exploring income‑driven repayment, understanding how the payments fit into your cash flow, or making sure an aggressive mortgage payoff doesn’t leave you unable to manage the loan at all.
Depending on where you live, there may even be property tax exemptions or other programs for older homeowners that are worth considering. A certified planner can run detailed projections on all of this to give you a clearer idea of what you’ll be working with. But overall, I’d be cautious about putting too much pressure on yourself—and your finances—on a super condensed payoff schedule when you’re already tackling a big student loan and trying to prepare your income for retirement.
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My spouse and I have three-to-four months’ expenses saved in an emergency savings account, and I continue to top it off with small amounts from each paycheck, complementing other regular saving, retirement account, and investment deposits. But I’m becoming increasingly confused about when we would ever use the funds. We rent, so we don’t need to worry about a new roof or appliance. We live car-free in a city, so we don’t have replacing the transmission hanging over our heads. We’re fortunate to have excellent health insurance that limits out-of-pocket exposure. When my spouse was in between jobs, we were able to make do with my salary plus unemployment, with our regular savings available for anything extra that came up. I feel like I should be able to articulate some sort of rubric of when it is OK to use the emergency savings, and I’m concerned that without that I won’t recognize the situation that we’re saving it for and then not take advantage of it when we ought to. How do I know when it’s time?
That’s kind of the thing about emergencies. Sometimes you can see them coming, but many other times they’re totally unpredictable. Even with great health insurance, a random medical emergency can turn into a huge financial burden. Which is why this fund exists in the first place—so that no emergency, big or small, predictable or not,…
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