Q&A with a Reader
We’re looking for some advice on how it’s possible to retire at 55, with
3 children in college (Sophomore getting second degree, and 2 Freshman), and one a sophomore in high school. Two boys and two girls.
We’re looking at retiring, but we’re not as interested in traveling as
much since our children range from 15 to 24 years of age.
I find the complexity and uncertainty of figuring retirement out
daunting with College costs, medical insurance cost, possible wedding
cost, etc. But now I’m forced to evaluate it because I’ve been laid
off at 55. Any advice on how to figure this out? I use Quicken and
everything is in there. I was going to try to use Quicken to work on it.
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My wife is currently working part time and trying to get it up to full
time to get some insurance benefits.
We have a significant savings built up, but need some direction. Can you
Thanks for taking the time to write with your questions. We appreciate it.
We are sorry about your being laid off your job. Another way to look at this is that it is a terrific opportunity. This situation didn’t just happen to you, it happened to your whole family unit. Consequently, it’s a strong moment for Team Family.
Get your children involved – it’s a wonderful chance to teach them about money, and planning for their future. It may be too late for the ones already in college to apply for scholarships, but maybe not. Working part time while going to college is also very common and is done by many students. For the one still in high school, you could have him/her work towards achieving a scholarship and have them realize that they will need to pay for some of their own college expenses. This is not a hardship, it’s Life.
The same goes for the wedding expenses – Get them involved. Say you can budget “X” for the wedding (or towards the down payment of their home) and if they want something more, it will need to come from them. Be reasonable about that amount and don’t place too much stress on yourself over it.
The point is, while it might be disappointing for them in terms of what they had expected, it does teach that life is full of change, and that they are better off in their futures by developing self-reliance to achieve their dreams.
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Let your children know how important it is for them to give you their support of working together and that it will make the Family stronger in the long run.
In terms of health care, have you looked into Obamacare plans? With a single income now, you might qualify for subsidies. I don’t believe the eligibility for plans have anything to do with your net worth, but rather your managed gross income. You might be able to qualify for a policy next year, since you probably made too much money this year to be eligible.
If you have all of your figures in Quicken, you should be able to figure out your average cost per day and your annual yearly spending. The categories of highest spending in any household is housing, transportation, taxes and food. If you make changes in any of those categories you will be able to “find” extra money.
I would suggest that you find both the figures for your cost per day and your annual spending. These figures are ones that you have the power to manage.
At some point you might consider downsizing your home, or moving to an area where cost of living is cheaper. While that might seem drastic to you right at the moment, there are many options open to you. Take a look at our Relocation Page for ideas.
If moving or downsizing your home doesn’t appeal, could you rent out a room to a student or a vacationer to your town? AirBnB is one way people have used rooms in their homes or casitas or the like to make a bit of extra money. If your town is close to a hospital, a sporting arena, or has tourist attractions, sign up for AirBnB and get some extra cash flowing into your home.
While I understand that most families in the U.S. have several cars, you might consider other modes of transportation that are cheaper, doing carpooling or paring down the number of cars you are financing and utilizing. Perhaps your older children can pay for their own car insurance and gas. The cost of car ownership might surprise you. Take a look at our Transport Page for more information.
If you have been tracking your expenses in the food category, you can reduce your total costs by eating out less, and taking advantage of rolling grocery sales using these times to stock up on food in your freezer. Have a cooking day once a week or twice a month where you make lasagna, cooked roasts, blanched vegetables, tuna noodle casserole, etc. and then portion out meals to put in the freezer. That way delicious food is always available and the temptation to go out or call for carry out is lessened.
While you have been laid off your job, you still have talents and abilities. How can you utilize them to your benefit? You might try putting together some kind of courses based on your talents and interests and sell them on Udemy. Len Smith has done this and makes quite a bit of money in this fashion.
Do you want to look for part time or full time work? Take a look at our Retirement Jobs Page.
You could write a blog about your experiences, your hopes and fears, what you face getting your family involved and tell your journey. Add videos. Monetize your blog.
These are only a few ideas and once you get in the mindset of finding solutions, utilizing your options, managing your cost per day, then your vistas will open up. You have lots of opportunities.
Taking action is very energizing, and I hope that some of these suggestions are useful to you. This could be an opening for you to create a satisfying transition to retirement.
Feel free to write and let us know how you are doing, or if you have further questions.
We wish you the very best during this time, and hope that you make the most of it.
Akaisha and Billy