Real Answers for Life’s Money Challenges
I have been working since the age of 14.
I am now 45 with two (almost) adults, living at home still and attending college.
I have been a single mom for the past 10 years and my kids sole provider.
Once you finally get your finances in order, you want to keep them that way. Here areseveral moves to make now.
For a good portion of my life, I was low-income.
Its only been in about the last 10 years that I havent felt like I was drowning financially.
Its scary and starting to weigh on me pretty heavily.
Is there hope for retirement?
I feel like I need advice and a little hope.
-K.
Dear K.,
Youve raised two kids in Southern California on a $45,000 salary.
Id say youve earned your blackbelt in frugality.
You know youre behind on retirement savings.
But given your circumstances, having $55,000 saved is still a pretty big accomplishment.
Saving and (sorry to say it) investing are essential toretirement planning.
But lifestyle is an oft-forgotten part of the equation.
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Now lets talk about the saving and investing component.
You dont need to start picking your own stocks or make a risky bet on cryptocurrency to invest.
In fact, youre already investing since you have a 401(k).
A target-date fund is a good option for investing retirement money.
No Interest Til Almost 2027?
Then your money is gradually reinvested into less-risky assets as you get closer to retirement.
The overwhelming majority of 401(k) plans offer target-date funds.
Theyre also an option if you open anindividual retirement account (IRA).
You may not have a lot of extra money to invest right now.
Make it your goal to put any future pay raises you get into your 401(k).
Since your kids are older, this may be a good time to take on aside gig.
But you have five years to prepare.
You dont need to figure out where youll be five years from now today.
If you need an extra dose of hope, look at what youve accomplished in the past 10 years.
Youve gone from feeling like youre drowning financially to keeping your head well above water.
With hard work and continued penny pinching, you might get to a point where retirement is in sight.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder.
Send your tricky money questions to[email protected].
(Can you sense my millennial sarcasm there?)
You know which ones were talking about: rent, utilities, cell phone bill, insurance, groceries…
