Where to put money if starting saving at age 65?

[scfr]

Right now I'd focus on building up the EF and making sure she has the best Medicare coverage for her situation.
As far as where to keep the EF, while my guess is that you won't go for any right now, keep no-penalty CDs on your radar to keep an eye on as rates change.

[LivingAlmostLarge]

High yield savings MM accounts. Maybe look at gettting some sort of assistance like rent or SNAP. Also is it likely she will qualify once she stops working?

[Petunia 100]

Yes, I think it would upset her to lose any amount of the only money she has saved. But she'd be overjoyed at it gaining more than the piddly high yield savings rate too, obviously. I was even thinking of maybe doing some bank churning with her 6 month emergency fund, that at least is guaranteed and would pay way more interest than a savings account if we moved it every 6 months or so. There's always some bank offering bonuses to start new accounts. But I think it would feel overly complicated to her.

My mom does account opening bonuses with her savings and CDs. (Brick and mortar banks only, she will not dip her toe into online banking).

[HundredK]

My apologies if my assumption was sexist. Just wanted to be sure she is getting every dollar she is entitled to.

Oh no, I didn't take it that way at all! It's a great question, always want to make sure the SS is being maximized.

[disneysteve]

She is collecting her own SS benefits - my dad never really worked much and didn't qualify for SS and mom has always been the breadwinner

My apologies if my assumption was sexist. Just wanted to be sure she is getting every dollar she is entitled to.

[HundredK]

She is collecting her own SS benefits - my dad never really worked much and didn't qualify for SS and mom has always been the breadwinner believe it or not. I did check unclaimed property while my dad was still alive and found something, but every time I gave them the paperwork to send in (you can't do it online in their state) my dad would throw it away and not mail it. I have no idea why except that he was mentally ill or thought he was trying to hide something. So that's a great idea, now that he's gone, I can just have mom do it.

[disneysteve]

This is a shot in the dark but have her also do a search at the unclaimed property site for her state. Make sure there aren't any accounts floating around that she didn't know about. Search in her name and your father's name.

[disneysteve]

Yep, it is highly concerning. But I also remind myself that she is in a far better place now with my dad gone because he isn't there to continue screwing things up. She's now in a MUCH BETTER place than she was before he died. So some of these things, like what she'll do if she loses her job, we'll just have to plan to deal with as it happens and try to have an emergency fund in place to cover any gaps. That's another reason I hesitate to put anything in the market - her finances are precarious. Maybe a 12 month EF before investing is the right way to think (though I fear that level won't be reached).

In that case, I'd agree with avoiding the market for the foreseeable future. She needs to build her EF best she can with what she has to work with. She essentially needs to be preparing herself for when she is no longer able to work.

Has she made sure she's getting the max SS she is eligible for? Is she collecting her own benefit or her survivor benefit from your father?

[HundredK]

The fact that at 65 she needs the job to live is highly concerning. What happens if they trim her hours, or the business shuts down, or she develops a health issue that prevents her from working, or her landlord decides to finally raise the rent?

Yep, it is highly concerning. But I also remind myself that she is in a far better place now with my dad gone because he isn't there to continue screwing things up. She's now in a MUCH BETTER place than she was before he died. So some of these things, like what she'll do if she loses her job, we'll just have to plan to deal with as it happens and try to have an emergency fund in place to cover any gaps. That's another reason I hesitate to put anything in the market - her finances are precarious. Maybe a 12 month EF before investing is the right way to think (though I fear that level won't be reached).

[HundredK]

You'll never go wrong over-saving, especially in this setting. The fact that at 65 she needs the job to live is highly concerning. What happens if they trim her hours, or the business shuts down, or she develops a health issue that prevents her from working, or her landlord decides to finally raise the rent?

Are you sure that she doesn't qualify for any assistance right now? Just by virtue of her age, there are various discounts she can get on utilities and other services. Then she may be eligible for other things based on her low income. My mom gets a break on her electric bill, her phone bill, and a few other things. She also lives in subsidized housing which is a great thing. Maybe you can at least explore that option for her and see what it might save her.

Yeah, I've checked with all of her utility companies, looked at welfare, etc. I've checked with everything except subsidized housing (which as I mentioned will be a huge struggle so I have to approach carefully). She lives in one of those states that thinks people should be self reliant and not ask for handouts, so the income limits for nearly everything are very very low. She doesn't even qualify for the food bank - a friend of hers who volunteers there brings her secret boxes of food though, lol. If she didn't have a job, she would be eligible for some of those things.

[disneysteve]

Ok, that's what I did, and I like the idea of using the extra to cover other unknowns. Thanks! I won't change my calc.

You'll never go wrong over-saving, especially in this setting. The fact that at 65 she needs the job to live is highly concerning. What happens if they trim her hours, or the business shuts down, or she develops a health issue that prevents her from working, or her landlord decides to finally raise the rent?

Are you sure that she doesn't qualify for any assistance right now? Just by virtue of her age, there are various discounts she can get on utilities and other services. Then she may be eligible for other things based on her low income. My mom gets a break on her electric bill, her phone bill, and a few other things. She also lives in subsidized housing which is a great thing. Maybe you can at least explore that option for her and see what it might save her.

[HundredK]

Include all of her total monthly expenses. Regardless of what her income is, because there are emergencies and expenses that come up well beyond simply income interruptions. Sure, if only $700 per month are required above social security, then an EF is an easy $5,000. But then what happens if her car dies, and then she has a medical event, and then she is told that she needs to move out? This is not an impossible or even uncommon scenario in the slightest. She needs a full 6 to 12+ month EF including all monthly living expenses.

Ok, that's what I did, and I like the idea of using the extra to cover other unknowns. Thanks! I won't change my calc.

[kork13]

Hmm, another question, with her EF calculation, should I just go ahead and assume she will be getting SS for the remainder of her life and deduct that from the amount needed for each month of EF? Seems like a fairly safe bet to do that? My current calculation, I didn't include SS at all in her EF needs.

Include all of her total monthly expenses. Regardless of what her income is, because there are emergencies and expenses that come up well beyond simply income interruptions. Sure, if only $700 per month are required above social security, then an EF is an easy $5,000. But then what happens if her car dies, and then she has a medical event, and then she is told that she needs to move out? This is not an impossible or even uncommon scenario in the slightest. She needs a full 6 to 12+ month EF including all monthly living expenses.

[HundredK]

1. I think EVERYONE needs to have some money in the market to offset inflation. At 65, she may live another 25-35 years assuming she's in good health. I think 30% in stocks is a good number but if she's super conservative or risk averse, less is fine too. As I said, an 20/80 fund or ETF would be good.

2. Can she cover all of her expenses on her SS check or does she depend on that job income? If she needs the job income to live, what happens if the job goes away or she becomes unable to work for some reason?

Agreed about inflation, that is definitely a valid concern. Her SS check does not cover all of her expenses, and she needs the job to live. There's no specific contingency plan at this point (she is in an emotionally wobbly place and there's a limit to what I can bring up), but my feeling is that if she can't work anymore or loses her job, we will have to make quick drastic changes, utilize the emergency fund, and see if she can qualify for any assistance without a job - she currently does not qualify for any assistance with the job. I'm also planning to look into subsidized housing for her, but I know it's going to be a full-on battle to get her to so much as consider moving, and the place she lives right now is nice, safe, and very reasonably priced (landlord hasn't raised their rent in 15 years).

Hmm, another question, with her EF calculation, should I just go ahead and assume she will be getting SS for the remainder of her life and deduct that from the amount needed for each month of EF? Seems like a fairly safe bet to do that? My current calculation, I didn't include SS at all in her EF needs.

[disneysteve]

I'd personally suggest a very healthy EF/cash account (eventually getting to 12 months of expenses would not be excessive)

I agree. At 65 and living nearly paycheck to paycheck, a solid EF is critical. I do want to know where the job income fits in, though. Is it required to cover expenses or not? If it's required, she has much bigger problems.