Disclaimer: This post is on behalf of my mother who doesn't have reddit and would not know how to use it.
For context, my mother is single and an immigrant (we're in the US). We've always been poor and frankly financially illiterate, so when it comes to saving for something like retirement, no one knows what we're doing. Only recently have I started to get an understanding of what it takes to retire even somewhat comfortably, and I'm truly terrified for my mother.
She grew up in a culture where the concept of "retirement" wasn't really a thing. If anything, your kids were your retirement plan. I am of course willing to help, but I will be starting medical school next fall and it will be at least a decade until I am making enough money to support anyone else. I have a sister who will likely be making money sooner, but of course she has her own life plans. For obvious reasons, we want our mother to have some sort of financial cushion during her retirement that isn't just a chunk of our income.
But there's nothing. No 401k, no IRA, nothing. To make matters worse, she recently was the victim of a scam and lost the little savings she did have. This was really the wake up call for me when I realized that my mother unfortunately just does not have the knowledge and intuition to make good financial decisions.
Unfortunately, I'm not sure that I do either. I have no idea where to start. I'm trying to read through post on this subreddit but a lot of the advice seems targeted to younger people who still have time. My mom is theoretically 10 years out from retirement. She will almost certainly have to retire later but she is a nurse and I'm not sure if she will be able to meet the physical demands for very long.
Edit: If it's relevant, current income is about 100k but it feels like she's working paycheck to paycheck. This is especially true after the scam. I feel like soon I'll have to do an audit of all her finances to see where the money is going. She's also taking care of my elderly grandmother.
So with all that said TLDR: What would you do if you were 55 years old and had no retirement savings? Where should she start?
55 years old with no retirement savings, what now?
byu/CrispAnge inpersonalfinance
Posted by CrispAnge
44 Comments
Have you asked her about her retirement plans? You can talk to her about your concerns, but you won’t be able to make her save/invest money if she doesn’t want to.
This honestly is mostly a question for yourself and sister as to what sacrifices you’re willing to make. Your mother can and should take immediate action to reduce expenses and maximize savings. If that means moving in with roommates or moving in with her children (which is not your burden to bear, but you can) to cut spending as much as possible. All discretionary spending ends. In 10 years, she can potentially save a solid amount if she dedicates herself to it, but realistically isn’t enough time to actually save for a full retirement at 65.
That’s where the sacrifices come in to play. First of all, it’s not your responsibility to take care of her financially during retirement, even if that’s the cultural expectation. But in all likelihood for her to live comfortably in retirement, she’s going to need money and support from you and/or your sister to stop working. That may mean living with you or receiving a stipend from you once you’re through med school and residency.
In short, if she wants to support her own retirement, she needs to save as much as humanly possible and continue to work for as long as she can at this point, but it’s likely not going to be enough unless she’s able to push OT, become a travel nurse and find more lucrative job opportunities while simultaneously cutting spending
It’s not entirely too late for her to save SOMETHING but it’s too late for her to have a comfortable retirement. She needs to save whatever she can in a Roth IRA or 401k, but I think YOU need to hear this…unless you want your mom to be destitute, I’d start making plans to provide her with a place to live. Fix up the basement, build a guest room/mother in law, look into an ADA. I don’t think there is any chance she can remain independent after retirement in any housing that isn’t total shit. Sorry.
>[You] will be starting medical school next fall
If you want to be realistic this is the retirement plan. If you’re going to be a doctor or surgeon, you should have the means to support your mother and realistically that is her primary option.
But until that day comes, tell her to max out her 401k including all catchup contributions, lower her expenses, and invest any remaining income in lower risk assets given her age. At 100k income this should be possible. There isn’t any other trick to it than to save and invest her money.
I would arrange a meeting between her and a hourly, fee-only fiduciary such as a Certified Financial Planner.
>My mom is theoretically 10 years out from retirement
Retirement is a number, not an age. She’s going to be working much later than 65.
As best she can, she will need to grow her financial acumen: first to try to get *something* saved, but also to become better equipped to combat scams. I think you’ll agree it’s concerning she’s already been scammed at the relatively young age of 55.
Where to start? By sitting down with her and making up a monthly budget. See how much she has coming in, how much is going out to cover expenses, and how much is left over.
A 401k is going to be advantageous, if available to her. A Roth IRA is good as well. If no 401k available, then a taxable brokerage.
Retirement is a number not an age. I think she needs to get in her mindset that she has more than 10 years of working. She needs to start spending like a retiree now, but still working to get the paycheck.
At 100k income, if she can’t save a lot now, she is going to have a bigger problem later
It’s frankly shocking that someone with a six figure income, especially an immigrant, doesn’t understand the concept of saving money. Even if she didn’t understand investing in retirement, most immigrants are scrupulously careful about saving money, so where did her money go for all these years? The good news is with that income,as long as her expenses aren’t insane, she should easily be able to save enough over the next ten years to fund retirement plus don’t forget, she’ll have social security. She can immediately start catching up by putting tax deferred money in her company’s 401k or in an IRA, and the contributions can be substantial at her age. She should meet with a representative from a reputable company like Fidelity to get an account going if one isn’t offered through her company.
Assuming she’s willing to let you help… figure out her expenses/income and make a budget with her.
If she’s a nurse I would hope she’s capable of saving *something*.
Her work probably has a 401k…start contributing at least enough to get the employer match.
Open a Roth IRA and start contributing there too if possible.
Is she eligible for social security? Get her an account on the social security site and it’ll say what her expected benefits are.
Hopefully she can hang on for another 10 years and then with her savings/social security she can maybe get into low income senior housing and you won’t have to help a ton.
But once you start making dr money you could look at getting a house with an in-law suite or guest house on the property to further reduce her expenses.
It’s what you said, work until you can’t. Rely on kids. Have you looked at if she qualifies for Social Security later through herself or spousal or survivor?
If she can put money into an IRA, start that.
Does she have a budget? Do you know how she spends her money? Does she own her home, rent, have a mortgage? Start by writing down her spending and tracking all of her assets and debts. If she does not have an account set up on the Social Security website, you should start that so you can log in and see what her contributions have been – presumably she’s been paying into SS through her career, along with employer contributions.
She should plan to start taking Social Security payments later, at 67 or beyond, which will increase the monthly payments. If she owns a home, start planning how to downsize into something that she can live in long-term, like a 1 br or studio condo.
You and your sister also need to sit down and do some financial planning. Figure out what your limits are and your timeline for contributions. Do not burn your own financial future to maintain your mom, but do determine what you can both realistically pay for and when.
These are just some intro thoughts. I’m sure others will have better feedback. Good luck!
A few thoughts… does your mom work a job that offers a 401k? She should look into it and see if there’s a company match. The match is pretty much free money so she should max that out if she can. For 2025, the standard 401(k) employee contribution limit is $23,500 for those under age 50, with an additional $7,500 allowed for those aged 50 and over (standard catch-up). I think she should contribute as much as she can.
It’s hard to know how expensive it will be to live years from now, but sit down and try to calculate how much money your mom will need each month to survive. For example, if she needs $6000/month and she retired at 67yo.. maybe her social security will be $2000/month, so then you’re left with a $4,000 gap. If she can save up 300k in her 401k by 67 she could probably safely pull $12,000/year or $1,000/month, which leaves $3,000/month she still needs.. I say all of this to just be realistic and sit down, write down the numbers and come up with a plan. Yes, she will probably need to work longer than she would like, but don’t just give up.. she has many years left to get herself in a healthier financial situation assuming she is committed to trying to make things better.
Retirement in the US is largely a financial status, so your mom should plan on continuing to work for the forseable future and likely well into “normal” retirement ages.
Given what you have said I would figure out a few things.
-1-Get her on a budget, she needs to be saving each month, first an emergency fund, then into retirement accounts etc. Not a lot of excuses for 1 person to be living paycheck to paycheck making $100k. If this is really true her expenses are likely too high for her situation.
-2-See if she has any tax advantaged retirement accounts through work. Help her start an IRA. The best time to start investing was yesterday; the next best time is today.
-3-Figure out if she will be getting any social security benefits
-4-She may want to start thinking about retiring in a cheaper location, maybe in the US, maybe outside of it.
Start today. Also, does she own a home? Pay it off before retirement as a mortgage is usually your biggest expenses. If she can pay it off (or buy something and work to pay it off), that would help with the short fall. Also, she may need to live with you if that’s not an option. Suze Orman gave me a lot of ideas (and hope) after having to start over after the recession. She has a LOT of free content out there, including a weekly podcast currently.
Does she have a 401K option at work? If so, does her company do any matching? In other words, if she has one, and her company does a 3% match, it means that if she puts in 3% of her salary, the company will deposit the same amount. Your mom would have 3% of her paychecks automatically deposited to the 401K. Let’s say that’s $2,500, and her company would would also match that and deposit the same amount of money, up to the $2,500 a year, in the same 401K. The company is basically giving you $2,500. If this is an option for her, have her contribute the maximum that her company matches. So if they match 3%, have her do 3%. If they match up to 4%, then have her do 4%. Do this first, if that’s an option. She can reach out to her HR department at work for help on this.
If a 401K is not an option she has, or if her company doesn’t do any matching for her 401K, open up a ROTH IRA for her. Use a low-fee broker, like Vanguard or Charles Schwab. You can do all of that online. It’s kind of just like opening a bank account. Set up an auto transfer from her regular bank to transfer a certain amount of money into it each month. She can contribute a maximum of $8000 per year.
But you need to decide how to invest the money in the 401K or IRA account, otherwise it just sits there, earning nothing. This is the part that gets confusing. Because you don’t have a lot of investment knowledge, I would suggest doing a Target Date Fund. Basically, you select the year (about) when you plan to retire and access the funds, i.e. a Target Date. For her, it would be about 10 years from now. So you would choose a 2035 Target Date Fund. The bots will automatically choose investments for you based upon that. Basically, it chooses more conservative funds the closer you get to retirement. The websites for the 401K or IRA will walk you through how to do that when you set up the account.
I’m not sure what type of nurse she is, but I know a lot of nurses who have moved to non-bedside positions. Trying to move into one of those roles would eliminate the physical demands. I know one person who does some medical review work for an insurance company and another who became a school nurse. But there are a lot of options.
Is she in a union? a lot of nurses are. if she is she may have a pension based on years of service. it sounds like she would get social security. under the right circumstances that combination can be fine, especially if she is willing and physically capable of working another 10-15 years. Nurses can also pivot to less physically taxing work that pays well.
I think it’s important for both of you to know it’s not hopeless. She needs a lot to go right, but retirement isn’t impossible. But it’s going to take a significant amount of inwards looking on her part to make it work.
Theoretically if she puts away 20% of her income straight into retirement, if she works until she’s 70 (which again things have to work right for her to be physically healthy enough to work that long) at 70, she could’ve saved 700k at 8% returns plus she’ll have delayed her social security benefit as long as possible. She should also commit 5% to emergency savings. And unfortunately because of the short time frame market volatility will play a big factor what she ends up with as she doesn’t have the years to absorb market fluctuations.
If she can do that, she’ll have learned to live off of 75k a year, probably be safe pulling 5% off her retirement which would be 35k a year plus social security which will really close the gap with the delayed benefit. That sounds easier said then done, it’s asking her to reduce her expenses by 25%
What’s important is figuring out her budget, trying to find the opportunities to put into savings and attacking it. Doing something is better than nothing.
The other thing that isn’t personal finance related is trying to ask her to live a healthy lifestyle to give her the best chance at being able to work that long and not be forced into retirement earlier then she’s ready. Some of that is down to genetics and what she’s done to this point but a lot of it is how she is from here on.
What is she spending the 100K on annually? That’s the most important missing detail. If there is no debt, she should be able to sock away a ton of her income. 10 years is still plenty of time if she is smart about it, but it will take sacrifice and commitment.
I read this and assumed she was working for low wages. Making ~$100k with nothing saved though? What has she been doing with all the money she makes? Does she at least own her house?
I make $100k/ year and have very little retirement $ as well. I will be relying on social security and part time work. I will have about $300k in equity on my house but that’s it. My three kids know I will need their help because the reason I have nothing is because i paid almost $1 million for their college educations.
What about social security? What is her estimated benefit?
Have a spare room in your house available. Just like the Chinese culture has. When the time comes, set up ground rules and house responsibilities. Charge her rent for upkeep. No other option really unless you have homelessness for her on the table.
Sit down with her and create a budget. Find out exactly what is coming in and what is going out. I would also be a little concerned about her being scammed. You must make sure that doesn’t happen again. Find out about ALL debt. Is she a candidate for bankruptcy? Once all interest bearing debt is squared away then work on small emergency fund. As far as her savings for retirement see if her work offer 401k etc and find out why she’s not contributing. I’d they do have her contribute as much as she can. If they don’t then open a Schwab or vanguard account for her. Invest in VOO VIG SCHD. Just google “top ten best Schwab/Vanguard mutual funds”. Ten years is still enough time to appreciate some decent returns. There’s really not a secret weapon or answer here.
First stop the hemorrhaging
second save like it’s your fucking job and your future depends on it.
The thing I like about the self managed platforms like Schwab or Vanguard is you can invest increments as small as 10 or 20 bucks and once you start to see the money growing, it’s really rewarding…
You can go to the social security website and get an estimate of her benefits. Understand her monthly expenses. Then you can figure if social security will be enough to cover her expenses
Has she ever contributed to a 401k? If she has and she stopped, those contributions are still hers.
If her company offers 401k match, she needs to immediately contribute to a 401K because she’s essentially passing up extra money from the company.
You’re also likely her retirement plan too so you need to plan for her as an added expense.
> What would you do if you were 55 years old and had no retirement savings? Where should she start?
I’d figure out my expected income (social security) and expenses (rent, utilities, food, clothes, transportation etc). That’s a rough outline – taxes and healthcare make it more complex.
The gap between expected income and expenses needs to be handled by increasing income (with retirement savings, support from children etc) and reducing expenses.
If for example I expected to make 30k from social security but spend 50k, I’d have a gap of 20k. Assuming a 4% withdrawal rate, I’d need 500k invested to support that.
If I made 100k now and could reduce my spending to 50k, this might work out with only 10 years to save. If I could save only 10k per year and needed 90k in retirement (60k from 1.5M invested), I’d try to be VERY nice to my children.
I highly recommend starting with the free ebook “If you can”, and “The Bogleheads’ Guide to Retirement Planning” for more detail on most of the topics that you’ll run into. You should read it even if you go for professional advice so you’ll know what to ask about and how to evaluate the advice.
Your mother makes $100k with no savings at all?
Someone needs to do a thorough audit of her household budget, for starters.
>If it’s relevant, current income is about 100k but it feels like she’s working paycheck to paycheck. This is especially true after the scam. I feel like soon I’ll have to do an audit of all her finances to see where the money is going.
this is very relevant. she can’t save for retirement if she’s struggling to pay her bills. you need to have a serious conversation with her about finances.
help her create a budget.
– start with her paycheck, verify her deductions are correct.
– make a list of all her hard expenses (bills that have to be paid). see if you can get a better deal on phone plans, internet, whatever. cancel subscriptions she doesn’t use.
– if she has credit card debt or personal loans, find out what their interest rates and balances are. have her stop using these.
– make a list of her soft expenses (groceries, gas, prescriptions, copays, helping family, gifts, donations, etc).
– see what money, if any, is left over? how can she re-prioritize her spending? where can she realistically squeeze in funds for savings?
As far as savings. It’s best to focus on 1) paying down high interest debt, 2) saving cash emergency fund 3) retirement savings in 401k, IRA.
You can play around with online retirement calculators to see what her savings could be in 5, 10, 15 years. So she can start planning accordingly.
Her income is 100k and disappearing. That’s the first thing to look at.
Pull two months of bank statements, and sit down together and tally up where everything is going. What are her *necessary* expenses, her *wants*, and her *gifts to others*. Sometimes just looking at where all the money is going is enough to kickstart things and get better spending habits.
Ultimately, though, she may just have to keep working until she literally can’t. A lot of seniors are in that boat.
How long has your mom worked in the US? If she’s getting a paycheck social security taxes should be taken out. Create an account on ssa.gov to see what her social security benefits will be. And she still has time to work and max out her retirement accounts.
If you are going to be a doctor I urge you to become financially literate. It’s not hard. The key is consistent saving, pay yourself first and leave below your means. Good luck to you!
I’m an immigrant myself and completely understand. My dad lives with me and has no savings, 401K or anything. I support him fully. This is true for other immigrant families as well. I know many receive small amount of social security, food stamps, Medicare, etc.
The first thing I would do is make an account on SSA.gov and see what kind of social security she can expect.
Then go through the usual personal finance steps which can be found in the sidebar.
Good income but with no retirement planned out, she’ll be working until she dies or she will spend her final years in grinding poverty.
I’m in the opposite boat, Mt mom is an immigrant but studied a lot. She has millions in stocks, parents own the home now, and pension for life along with everything else.
And she doesn’t fall for scams like that even though she’s mid 70s now.
But we have a lifetime of different mindset, education, and behaviors than your family, so it’s ingrained in us. It might be a lot harder to impart anything at this late age for you all, but if you start, its about budgeting and routine investing.
Well if you make money in a decade, she’ll be 65 and ready to retire with your help.
Does her employer offer a 401k with a match? If so, have her start saving in it, enough to get the full match.
For the next 12 years, she needs to max out retirement savings (this is when you and your sister help will be most useful!). 401k + RothIRA for 12 years. (VT + BND – bogglehead investing). That should get her to 500k+ saved.
At 67 she can take the max Social security payments and live off that + the $1.5k per month from the 500k. Since she is making 100k annually, he SS payment should be around $2k. That would put her in the $3.5k net per month retirement boat.
Her situation isn’t hopeless, but it is dire.
Her plan should be to take care of her health because she will not be able to retire. Or if she has been working legally, she’ll have to budget for social security.
Both of you need to get financially educated. See a few only certified financial planner to get started. Honestly, your mother needs to keep working until she physically can’t anymore.
Retirement planning requires actual numbers . Sounds like you will have to help her get started.
The first thing to do is understand exactly how much it costs her to live. The way I did this for myself was to review 3 months of my checking account statements.
If she has any debt, set up a plan to pay that all off.
If there is a retirement plan (401k) available at our job, she should be contributing (at least up to the amount the employer matches)
Secondly, she should open and contribute to a Roth IRA every year (she can contribute $8,000 in 2025)
Go on the social security site with her and review what her payments would be when she takes social security at 65, 67, or 70.
When all that is done you will have a better idea of how much she needs to live, how much income she’ll have, and how much she can save between now and then. (Use an investment calculator to predict how her savings will grow)
Looking at my relatives. There is a notion of victim mentality. This means someone will take care of me. I have relatives that live this way. All I need to say, if your mother would move in with you or your sister, could she help make your lives easier around the house. Take up cooking, cleaning, laundry, baby sit and be helpful. It does not have to be lose situation.
All of the advice people are giving you is coming from people who have never been poor and don’t have poor parents. There are tons of people out there, at least one-third of retired Americans, who live with no retirement savings because they never made enough money to save anything. Your mother appears to be one of those people even though her income seems to be substantial. I’m guessing a lot of her money has gone to helping family.
Your mother will have to live on Social Security and look at any possible assistance she can get to reduce the costs of her life. Your mom is likely at least 12 years out from retirement since full retirement age is 67. If she can, she should wait until she is 70 to retire for max retirement benefits. As a start, she should register online with the Social Security administration and see what her benefits look like at each retirement age. Since she is a nurse, there is also the possibility that she can work part-time after taking her SS benefits as well and augment her benefits with less physically demanding hours at least.
The second thing you can do is call your local Area Agency on Aging and talk to them about your mother’s situation. They can explain to you what possible options may be available for your mother for low-income housing/rent, reduced property taxes if she owns a house, supplemented internet, phone, and utility bills, etc. It’s not a pretty picture, but there is help out there if she retires in relative poverty.
The most important thing to do and this may take some time is for your mother and you to sit down and make a budget for her. Write down every expense she has and all of her income. Help her map out where the money is going with her high salary and see why she is living paycheck to paycheck. Even if she does start to save now (and the easiest thing to start with is to put the maximum amount into an IRA each year until she is 70 to reduce her income tax and start to accrue interest -it is just a type of savings account), she likely won’t have much socked away but it’ll be better than nothing and it will reduce her taxes and give her a little more money in the present.
Most of the investment-based advice is for people who have the time to place their savings in higher risk and higher yield areas, but your mother needs to put her money where it is going to be stable and accessible since she’s so close to retiring. People who are talking about her saving half of her income when she is living paycheck to paycheck now have unrealistic expectations of someone who clearly either has a spending problem or lots of obligations.
When the time comes for her to actually retire, and if her income looks very short of her needs, it will be time to go to the local social services office and have a sit down with someone who can map out the path ahead. You are not her retirement plan.
You need to budget and help her save. At 50 the irs lets you contribute up to 30K of your salary to 410k for “catch up” purposes.
That’s $300K contributions over the next 10 years, plus social security benefits that she would draw at 65. She could reasonably have $5k – $8k a month for a retirement “salary”.
But you need start that now.
How’s your mother contributed to Social Security? Will she receive Social Security? I’m aware of Social Security is hardly enough to live off of but determining where you live and what you’re living expenses will look like can be a huge help. If it’s possible to get on section 8, or in an income driven housing compare environment, where wwno only pays 30% of whatever their income is.
Your mom is probably young enough to pick up some side jobs such as housework, dog sitting babysitting that’s sort of stuff and save that money . There’s definitely an opportunity to go to the budget and know where this income is going, and where some of these expenses can be cut that can be turned into savings. In theory still has a good 10 to 20 years to save. Possibly contribute to a Roth IRA or an S and P would usually have a good yield of return a higher savings at four or 5% can be helpful. Most banks have what’s called a Ramsey bundle named after Dave Ramsey and just asking for it you’ll get 3% on your checking and combine savings. These little bits add up. And it’s always about saving your small amount of money. Should get a larger amount of money overtime. And there is some time.
People always think if they don’t have a few extra dollars to save at one time then they don’t have enough to save and they don’t save or they just calculate the $25 a month savings of $300 a year over 10 years and come up with 3000 but if you’re doing that with a high interest rate, you’re coming up with a lot more a real a lot more
Best of luck
She needs a budget and to check her social security estimates.
If she’s starting from $0 at 55, it’s likely retirement won’t be an option for her unless she can live off social security or family supports her.
A few things:
She’s 55, she hopefully has lots of time to work ahead of her. She should not plan to retire at 65, and assume it will be in her 70’s unless health prevents her sooner.
If she’s making 100k, but has no savings, she is living above her means. She needs to drastically downsize, that means maybe moving in with a roommate, no more discretionary spending. She should be aiming to put at least 30% of her income into retirement, though even that won’t get her close to being able to retirement.
I would ask to look at her budget, because in most places 100k is a lot for one person to live on, especially if nothing is going to retirement.
Does she own a car or home?