I’m So Sick of Hearing the Same Old Complaint From People About Their Savings. They Have No Idea!

Pay Dirt Photo illustration by Slate. Photo by Liubomyr Vorona/Getty Images Plus. Pay Dirt is Slate’s money advice column. Have a question? Send it to Kristin and Ilyce here. (It’s anonymous!) Dear Pay Dirt, I read your column all the time, and there are always people asking whether they’ve saved enough for retirement or for emergency funds. Then, they tell you the amounts saved, and I am flabbergasted because I am not even close to the amounts they’ve saved and are worried about! I am just over 50, and through a series of life circumstances, failure to advocate for myself during most of my employment history, and poor decision making, I only have $23,000 in retirement and next to nothing in savings. After living with my parents well into my 40s, I finally bought a house five years ago. I’ve now learned to advocate for myself, and I am finally making a decent salary. I am putting more in my retirement, paying more than the minimum on my debt (other than my mortgage, I hope to be debt-free in four years). But I am still not able to save a lot. To be honest, even though I make a decent amount, I still feel like I am living paycheck to paycheck. How do people save for the future when they have so many bills? Every year my mortgage has gone up because of property taxes and insurance, interest rates are trending up for my revolving debt, and while I try to estimate my income taxes, they always seem to be more than what I was expecting. For what it’s worth, I live alone and have two furry dependents, so only one income coming in where others may have two. And, yes, I know having furry dependents can be on the pricey side, but they are my lifeline and keep me happy and healthy. How can I increase my savings, without sacrificing paying off my debt? Or would it be better to pay off the debt and then save more? Right now, I’m contributing enough to my retirement to get the full employer match, and I plan to increase my contribution by 1 percent over the next few years until I’ve reached the max allowed. Is this a good strategy? I’m in good health, and the women in my family have worked well past retirement age, I hope to follow in their footsteps. —Late Bloomer Saver Dear Late Bloomer, You’re not alone! It’s far more common that people don’t have enough saved for retirement, and the fact that you’re working on it is great, even if it feels like you’re a little behind. People who seem to be saving effortlessly might have some advantages that others don’t: dual incomes, lower housing costs, an inheritance, or maybe just fewer financial setbacks in their past. Everyone’s starting line is different, and it sounds like you’re already on the right path: getting your employer match, paying down debt, and increasing your retirement savings. Those are great financial moves. As for whether to prioritize your savings or debt payoff, the answer depends on interest rates, cash flow, and how much breathing room you need. Your current strategy is solid for someone who is trying to rebuild after a late start. There’s also the problem of the comparison trap. You’ve made huge progress in a short amount of time, and that’s something to be proud of. The more you can pat yourself on the back for your progress instead of criticizing yourself for not doing more, the more motivated you’ll be to keep going. You’re on the right track, even if it doesn’t look like the one other people are on. Please keep questions short (<150 words), and don‘t submit the same question to multiple columns. We are unable to edit or remove questions after publication. Use pseudonyms to maintain anonymity. Your submission may be used in other Slate advice columns and may be edited for publication. Dear Pay Dirt, I have been fortunate that my wife and I are naturally frugal. This has led to a sizable net worth on fairly modest salaries (she is a teacher and I have switched between local government, state government, and consulting gigs). While about a quarter of our $2 million net worth is equity in our current house, the rest is in various retirement accounts, a large health savings account (HSA), some stock and bank accounts, and a rental property that was our first house when we married 20 years ago. My wife is retiring at 55 in a few years and should receive $3,600/month in full pension when she reaches 62. Her full (age 67) Social Security is scheduled to be $2,900 and mine $3,500. My pension from government service is fairly small, but probably enough to cover utilities. Given that we should be fairly well set once we reach full retirement age, what do we do for the next 10 years? Should we slow down our contributions to our retirement accounts and hold more in regular, taxable accounts and maybe quit working a few years before full retirement and live off that? Or maybe go ahead and start working part-time time or something to have a more relaxed semi/pre-retirement? Or should we continue as we have and try to get the $2 million to grow even more by retirement? It is maybe worth noting that we would likely not sell our current house unless we moved overseas (another option!), so that portion of our worth is only accessible via equity line in emergencies or short term. —My Biggest Fear Is Medical Bankruptcy Dear Biggest Fear, What you do for the next few years really depends on your risk tolerance, what you want to prioritize, and the early retirement balance that feels good for you. You already have stability, so the next 10 years are about figuring out how to live off of the nest egg you’ve built. This is the exact kind of thing you want to consult a financial planner about, especially if you’re worried about a catastrophic medical emergency that might wipe out your savings. A planner can walk you through the actual numbers: how much you should have accessible to buffer against a worst‑case scenario, how your HSA fits into the picture, and whether an early (semi) retirement might affect your safety net. They can also help you plan out the tax implications of changing up your contributions and look at how sustainable it is to live off of your dividends for a while. They can help you look at the tradeoffs between beefing up your $2 million versus using some of it to buy time and freedom now. I’m not a financial planner, so I can’t tell you whether it’s best to stop working or switch to part-time work or to keep maxing out your retirement accounts. My take is that if you’re able to trade future wealth for more time and freedom now, that’s a perfectly reasonable route to explore. But I’d let the professionals do the math and give you a clearer idea of your choices. —Kristin Classic Prudie My wife and I have been married for 25 years, and for 24.5 of those years I was unfaithful. She never knew about it; I even missed the birth of our first child because I was in Paris with one of my then-mistresses (I lied and said I was on a business trip). Well, six months ago, a shocking surprise changed everything. Never miss new Slate Advice columns Get the latest from Prudie and our columnists in your inbox each weekday, plus special bonus letters on Saturdays. Advice Personal Finance Real Estate