Personal Finance Help For Seniors – Tips, Resources, And Examples To Prep For Retirement

Planning for retirement is stressful enough, not having your personal finances in order can make it that much harder of a transition in your life. The good news is, there are several programs and tools available to help you get your retirement finances in order. 

If you’re between the ages of 55 and 65, you should be planning to save money for retirement, reducing any debt (like credit card, student loans, bank loans, and anything else that isn’t a mortgage), and making sure your health insurance and life insurance plans are the right safety nets for your unique needs. You can seek the help of a financial advisor to help you with the details, or take care of all the details yourself and have them review your goals with you on an as-needed basis.

Younger people have more knowledge and resources these days to take action when it comes to saving and investing for retirement, early in their 20s and 30s. If you’re retiring soon, you might not have had the benefit of the internet to research all your options and secure your future. No worries, you can make a fresh cup of coffee, block out a few hours, and start thinking of your current situation and how you want to retire.

At the later stage of being employed or working for yourself, you’ll want to make sure your money is in order for you and your spouse for now. Later on in retirement, you can think about creating a Will to properly allocate your estate to your children or whoever you want to leave it to.

Let’s look at the first thing you should look at when sitting down to start reviewing your situation

What are you spending now, and what do you plan on spending in the ongoing future

Do your homework to plan for retirement, this way you know how much you have now and how much you need to retire comfortably

The first thing you’ll want to do is list out your current income & expenses on paper (or Google Sheets like I do). This information will show the money coming in and what’s going out. Here you’ll find ways to possibly reduce your household expenses, now or closer to your retirement, so that it can be low and predictable. Get out a single piece of paper or an empty Word document.

For now, and throughout the rest of this article, I will create a hypothetical scenario so it’s helpful for you. Let’s say you and your spouse are both 60, retiring in 5 years, and make a household income of $120,000.

On a monthly basis, you take home $10,000, and you notice you spend about $6,000 on things like your mortgage, credit card bills, utilities, car payments, phone services, and so on. Basically everything they need to live their life. This leaves $4,000 that you allocate towards saving and investing.

You have a very clear picture now of where all your money is going. I’m sure your exact situation might not be so clean, but this example will be helpful for you to see what we can do to retire with peace in mind.

Next, list out all your debt

Now, get out another piece of paper or Word document. Let’s list out all the debt you currently have.

For our hypothetical couple who takes in $120k a year, and spends $72k a year, we have the following made-up debt listed:

  • Mortgage $180k remaining
  • Car 1 $14k remaining
  • Car 2 $6k remaining
  • Credit cards $2k (paid off every month)
  • Hospital bill $8k remaining

In total, we have $208k of long term debt and $2k of that credit card debt that will be paid off very soon.

This debt helps us see what is owed so that when we calculate our assets, we don’t have a wrong understanding of our debt to asset ratio.

Now, list out all your assets

After the hypothetical couple listed out their recurring income & expenses and then their debt, it’s time to look at the assets part to get a big picture of the current situation.

Let’s get some more coffee, and use the same 2nd piece of paper or Word doc file to include the assets we currently have. Examples for the couple are below:

  • 401k for spouse 1 $90k
  • $401k for spouse 2 $110k
  • Savings account $80k
  • Traditional brokerage account $120k
  • Mortgage value $100k (House is worth $280k and has $180k left on it)

You can choose to not include your house since it’s not something fairly liquid that you can get money from if needed. I added it up here, because, from various conversations with others, some peers choose to add that in the assets column.

If your house isn’t paid for yet, you’ll want to plan for those continuing monthly mortgage payments into your retirement. 

Saving and investing now for retirement

Saving and investing for retirement

At this point, your money situation, whether positive or negative, is fairly clearly laid out. It might not be as meticulous as one done by a financial planner, but you’re getting a solid idea on how much you make, how much you owe, and how much you own.

Debt aside, our hypothetical couple has $400k in fairly liquid assets to use for their retirement lifestyle. We won’t include the mortgage, as it’s not that liquid, and ideally, they want to live where they’re paying the mortgage.

Right now, the $400k is neither good nor bad, because we still need to figure out how our couple wants to live after retirement, and what other supplemental income they might be receiving (like social security).

Our couple spends about $6,000 a month on all their bills and saves the other $4,000 monthly towards retirement.

At 60, putting away $4,000 a month until their retirement of 65 will definitely continue to help grow their nest egg. Let’s take a look at the expenses part.

I’m sure you have heard that “you should retire with at least $1,000,000 or more for a comfortable lifestyle”. While that’s probably true (if not more) for many Americans, it might not be true for this couple.

Let’s say our couple wants to live at their current house, hoping to pay it off sometime in retirement and live there always. They did the homework on their expenses, and can predictably say that it will go down to $4,000 a month, down from the current $6,000 a month expenses.

If the $4,000 was accurate, currently they would be able to live on their savings during retirement for about 8 years and 3 months. This isn’t ideal as stated by the U.S. Government Accountability Office, who said that about half of American households age 55+ have little to no retirement savings.

At 8 years and 3 months, you can live comfortably for some time, but think about it. You’d usually plan to retire around 65 or 67 these days, and the typical life expectancy is around 75 for men and 80 for women (but we know plenty of people living a lot longer).

Aim to save for at least 12 years of retirement, allowing a balance of your savings and investments to sustain your needs.

If you’ve worked as a U.S. citizen for many years, you and your spouse will have a nice monthly social security check to help supplement your needs. This is why, even though you’d want much more than 12 years of savings, you can plan for some support from the government via monthly social security checks.

Where to put your money to get more money

The first thing you’d want to do, if you haven’t done so already, is to open an investment account based on your investing goals. If you’re employed, you probably already have a 401k. If that’s the case, you can look into a Roth IRA or a Traditional IRA (the first is pre-taxed, and the latter is post-taxed).

Here are the three-best type of investment accounts for seniors:

  • 401k- 401k plans are offered through your employer and give you the ability to make pre-tax contributions to an account that grows your contributions tax-free until the time you withdraw them at retirement. 
  • Traditional IRA- Traditional IRA allows you to gain tax break while saving for retirement by allowing you to contribute pre-tax dollars into your account as long as the funds come from a job. These funds are held and can grow tax-free until you withdraw them. 
  • Roth IRA– Roth IRAs give you the ability to invest and grow your money tax-free while also being able to withdraw without penalty. You can take out the principal amount you invested without penalty. If you want to take out the extra growth in your investment account too, you’ll be hit with a penalty. 

What exactly should you buy?

To keep that part simple too, the easiest and usually most stress-free options are to either buy target-date funds or low-cost index funds.

Depending on where you open your account (like TD Ameritrade or Fidelity), you can buy one of their target-date funds that based on the year you plan to retire.

Say you plan on retiring in 2028, you can buy a “2028 target date mutual fund” which buys stocks and bonds proportionate to the amount of risk you’d want to take if you’re retiring in 2028.

This fund could possibly be 60% stocks and 40% bonds, to lower your risk and keep more of your money for your upcoming retirement. If you planned on retiring in 2034, you might have a riskier balance of stocks and bonds, to allow for more growth.

Making sure you can retire comfortably

Being proactive about your current personal finances will help you with your upcoming retirement

I saw a Forbes article that mentioned that you should have at least 70% of your pre-retirement income to live on once fully retired. An example of this would be someone who made $50,000 a year before retirement, only living on $35,000 once they fully retire. The total amount of money you need to save for retirement will depend on the lifestyle you lived before retirement. 

Here is a detailed breakdown of how much you should spend on your monthly necessities once retired: 

  • Transportation- 17.1%
  • Housing- 32.4%
  • Healthcare- 12.2% 
  • Food- 12.9% 

Once you reach the ages between 55-65 and up, several costs outweigh the importance of some listed above. One of those costs is healthcare; after the age of 65, healthcare will substantially outweigh transportation costs. Keep in mind, the breakdown above are average numbers. Your specific lifestyle factors can either increase or decrease these “recommended” percentages. 

If you’re having trouble coming up with a solid financial plan to follow, consider meeting with a professional financial adviser who can assist you. They’ll be able to help you find any weak areas in your retirement plan so you can optimize your budget. Remember, unless you plan on starting a business or re-joining the workforce, you’ll need to make your retirement money last as long as possible. 

Alternatively, if you are thinking about starting a business during retirement, there are several ways to do so without feeling like it’s full-time work. Take the time to develop a hobby or specific set of interests, doing so will allow you to come up with creative ways to make money while in retirement. If you have a small set of technical skills, you can easily make homemade crafts and sell them online. 

For those retiring aged 55-65, you should use a monthly finance planer to help create a budget that will help you stay on track with your spending. 

Additional retirement resources

Here are some more links to resources if you want to do some more reading & simulation work.


Retiring can be stressful, especially if you feel like you’ll never be able to retire comfortably. I’ve seen it myself when I hear from friends or family about someone who’s trying to retire because of age or health, but will see struggle ahead.

To me, what’s worse is retiring without any idea of where you stand. Take the time to do the homework I laid out in the article, and get an accurate “map” of where you currently stand, so you know what you have to do to get to where you want to be.

Was this article helpful?

Leave a Comment