Today, we hear from Betty, a 60-year-old widow who lives in Arkansas and just lost her husband to cancer. While she and her husband had a comfortable life until his cancer diagnosis, she now needs to adjust for the loss of his salary, paying for outstanding medical bills, and considering what her new version of retirement will look like.
Annual Salary/Income: $(Still TBD after spouses death)
Monthly Roth IRA Contribution: $0
Monthly Savings Contribution: $200
Monthly Employer-sponsored Retirement Plan Contribution: $0
Housing costs: $0 Home is paid off.
Groceries and home supplies: $150
Dining out: $100
Health, dental, and vision insurance: $250
Auto, homeowner, and umbrella liability insurance: $250
Life insurance premium: $150
Lawn service: $50
Cell phone: $68
Gym membership: $0
Clothing, misc.: $150
Credit card debt payments: $0
How difficult is it for you to put money away for retirement? Have you had to give up anything?
I was fortunate to only work part-time when the kids were growing up and to quit when Bob got sick so I could care for him. Bob received a pension from the first job he worked, we contributed to an employer-sponsored retirement account later in his career, and we have two rental properties we purchased as an investment. We were always very frugal when raising our kids. Vacations were either camping or visiting relatives. I wouldn’t say we had to give up anything, but we never drove new cars or had brand-new clothes.
If you had to put away more money for your retirement, what would you cut out of your budget?
Right now, I have to sort out Bob’s remaining medical bills to understand where I am financially. I will likely sell off my rental properties, but I look forward to my financial planner's counsel on that decision.
What are your retirement goals? What age do you want to retire? What do you want to do in retirement?
Before Bob passed, we planned to retire when we were 67, sell our rental properties, and purchase a motorhome to tour around the United States. Now that he’s gone, I don’t want to do that alone. Right now, I think I will move closer to my daughter, who lives in Chicago, so I can be closer to my grandbabies.
What does “health” mean to you?
Since Bob’s illness, health means being able to do all the daily things we typically take for granted. I count my blessings every day for waking up and being able to take care of myself. To keep fit, I walk with some friends after dinner each night.
Are there luxuries that you always need to include in your budget? House cleaner? Grocery shopper?
I love to spoil my kids and grandbabies, so I need to have a good gift budget. I don’t ever want to give that up.
Do you have a financial planner? If so, explain why your planner is valuable.
Bob and I have used a financial planner for years. He helped us figure out the best way to purchase our rental properties without incurring tremendous tax implications. Now that my retirement vision has changed, I look forward to meeting with our financial planner again to help figure out the best way to set things up to eventually move to the Chicago area.
In addition to saving for retirement, what are some of the big picture items you want to invest in?
Well, now that I’m alone, I need to be sure I have enough for my long term care. I don’t want to burden my children with my care, but I know based on seeing our parents and friends that even though I’m very healthy now, my body and mind will eventually require me to get some support to live independently, or there may come a time when I’m no longer able to live alone.
What intimidates you in planning for retirement?
Bob and I always made our retirement planning decisions together. It’s intimidating to move forward alone. I’m so grateful for the guidance of our trusted financial planner, who I am confident will help me make the best decisions considering my current situation.
When Betty lost her husband to cancer, her retirement vision changed. They were always frugal and had made some sound retirement investments in the past. Now Betty needs to understand her current financial situation without Bob’s salary and adjust her plan for retirement to reflect her needs as a widow. Her trusted financial planner will be an essential partner in figuring out Betty’s next steps.
Neither Transamerica nor its agents or representatives may provide tax, investment, or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors and financial professional regarding their particular situation and the concepts presented herein.
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