Hi Judy, this is Mark.
I am also a professor and have been through the ringer. I am almost 56 and we were wiped out in the current financial crash. I teach medical administration but I have a BA in economics which is finally paying off. I have just now figured something out which will allow us to build our retirement.
What do you teach?
Hmm....so you're behind on your savings goals.
No one can magically create more cash than there is. If you need to increase your savings, it will take a combination of reducing expenses and generating more income to achieve this.
The potential for medical emergencies/disability to disrupt your retirement plans is very real, because you don't sound as if there's much margin for error. At the very least, do make sure DH is paid up for the 40 quarters needed to be eligible for Social Security, free Medicare Part A, and Part B. I've had friends who didn't think when they were younger that this was so critical, but are now very sorry they weren't more careful about ensuring their eligibility.
If either of your employers offers a 401k plan, sign up immediately for at least the full match, and increase your percentage with every raise. Then, if a 401k Roth is offered, put some money in that - $50/mo is better than nothing. But get any free pre-tax matching funds FIRST.
Should you get into financial trouble, here's something to know. Retirement accounts are generally protected from creditors in bankruptcy or under credit reduction plans, so NEVER use retirement funds to try to 'keep afloat'. I did that and it was the stupidest move I ever made. We were very fortunate it didn't permanently derail our retirement plans.
If you change employers, always consolidate old 401k's into a single IRA. Should you die unexpectedly, your surviving partner or heirs will thank you. It's a paperwork madhouse to do this after someone is deceased.
Get your wills and both healthcare/financial Power of Attorneys done right now. Do not procrastinate. It isn't that difficult - you can get free or very low-cost forms off the web by Googling, and it will give you a positive emotional boost to know you are starting to take control of your life.
This also means making sure all retirement accounts properly show the beneficiary you want. Retirement accounts are POD, or Payable On Death accounts, similar to life insurance. They are counted in the value of an estate for federal and state tax purposes, but they pass directly to the beneficiary listed. Keep updated on these - we have found that I kept 'falling off' as the designated beneficiary of DH's retirement account, every time they upgraded their computer systems!
Realistically, at your age you need to save between 10% and 15% of combined gross income to manage a comfortable retirement. It's almost impossible to start there, I know, so just do the best you can and bump up your savings percentage as you go along.
Best of luck to you going forward.
Don't know if this will work for you, but this is what I did. You have enough time to capitalize on your incomes until you turn 67 or more. The operating word here is save, save, save. Decide what you positively need each month to live, then add 10% for fun times. My goal was $3500 a month, and all my excess was added to my tiaa accounts. I too was in higher education (administration), divorced my ex in 1988, after my three children were on their own, and have been single ever since. I retired in 2006, bought a beautiful new two-story home, and have a couple annuities and social security. I have a $25,000 emergency fund and will be collecting my last annuity within a couple years if needed. I only use a debit card for purchases; thus, my only major bill is my house, with a mortgage that is less than I used to pay for rent. Fortunately, I have excellent health which I attribute to genes and a daily antioxidant smoothie for breakfast. :):)
I grew up in a poor family, but my folks always told me to 'get an education and save your money,' words I lived by. And, I am very proud of what I have accomplished, even through some very difficult times. And, the saying goes, If I can do it, so can you. Just make up your mind to do it. Good luck.
Two things other than those already mentioned here are pretty essential as well. 1. If you have any credit card debt pay if off ASAP and only charge what you can pay for every month. Payoff any revolving debt (auto etc ASAP.) 2. And then determine how much more a month you need to put down on principle so that your home loan is paid off at least by the time you plan to retire. Then as said in all the other post here, add to your tiaa-cref account or any other University retirement plan especially if they contribute a percentage of what you contribute.
It is amazing what retiring debt free can do for you. My wife and I have fairly small tiaa-cref 403(b)(but they are considerably above the average americans retirement savings) that we don't plan to draw down on until forced to currently at age 70 1/2. We retired in Nov 2008 at 62 and have completed significant home remodeling and averaging a week to two week trips to Europe and Asia approx. 4 to 6 times per year without any reduction in our after tax savings. All living expenses, travel, and remodeling has been covered by my state teachers retirement and our SSN monthly benefits which we drew upon as soon as possible.
As I look into the future I think the only thing that could possibly hurt our standard of retirement is if there is significant additional cost that must be borne by us for health issues. Both in insurance cost and out of pocket and copays.
Financial institutions just like casinos do not build big buildings because they lose money. Interest on debt is always higher than interest on savings and today that spread has widened to record territory. Become debt free and add to retirement savings as you can.
The healthcare "choice" fallacy perpetrated by the Republicans assumes that everyone can afford to purchase market rate health insurance. I doubt if the insurance industry will take a hit on the number of boomers who have or are about to begin Medicare coverage and prefer to buy private coverage instead. I would propose that everyone who can afford to buy market rate health coverage do just that and leave the Medicare system entirely, leaving more than enough resources to continue robust Medicare coverage for the rest of us. The other "choice", women's health, is what they want to control/bar/deny. Why don't they make up their minds? Either foster real choice for all or just stay the hell out of people's lives?
***When I was young I was a liberal. Now that I'm older, I'm even more liberal - because I've had a lifetime to read, listen, and PAY ATTENTION! Developing a good dose of empathy never hurt anyone, while becoming small-minded and self-satisfied to the detriment of others is just plain selfishness, and is indeed harmful to others.***
... I doubt if the insurance industry will take a hit on the number of boomers who have or are about to begin Medicare coverage and prefer to buy private coverage instead. I would propose that everyone who can afford to buy market rate health coverage do just that and leave the Medicare system entirely, leaving more than enough resources to continue robust Medicare coverage for the rest of us. ...
painter33 post also seems as if it's based on the misconception that Medicare has a single pool of money in reserve from which it pays claims.
NOT SO. Medicare, like SocSec, is a 'pay as you go' system, augmented by money from the federal government. The fewer people who pay in, the less money it receives to pay out. Covering a wider group of people is an advantage, not a disadvantage. And yes, Medicare has been shown to be much more efficient than private carriers.
So ironic that the Repubs hate Medicare and are trying their best to dismantle both it and healthcare reform, when it was Richard Nixon who first proposed universal coverage. Had we done it then, we could have avoided a lot of today's issues. It's an actuarial fact, if you have as wide a base to draw premiums from, the law of averages works in favor of lowering overall premiums. Narrow the base, the premiums go up to compensate for the higher risk of expensive claims.
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