Financial Advice for a Retired Teacher

“I’m 68 and retired, getting $4,500 a month from Social Security and my pension. I also have $400,000 in a brokerage account, $300,000 in inherited property, and $100,000 in a state retirement account. As a single mother, I managed to save despite limited time for a savings plan, but now I live in a very expensive state. I’m thinking of working part-time for an extra $2,000 a month, but I wonder if there’s more I could do to ease my monthly financial burdens. Who can help me?”

It sounds like you’ve been saving diligently and, thankfully, have a decent fixed income. Financial professionals suggest that connecting with a financial planner could be beneficial for you. You might explore resources like the CFP Board or NAPFA for options. There’s also a free tool that can help you find a financial advisor.

According to Jeffrey Stauffer, a certified financial planner, your situation is a decent starting point but doesn’t cover everything needed for a comprehensive retirement plan. There are factors such as budgeting based on your desired lifestyle, health considerations, existing debts, and other assets that should be assessed.

Jeremy Keel, a certified planner, insists that understanding how much income you need and for how long is crucial. He explains that with careful planning around different types of taxes on investment accounts, you could potentially minimize your lifetime tax burden.

A practical first step could be to evaluate your monthly expenses. Instead of painstakingly creating a budget from scratch, consider reviewing your bank and credit statements over the past year to see your actual spending patterns.

Trevor Houston from ClearPath Wealth Strategies notes that, while $4,500 a month and $800,000 in savings look good on paper, managing those finances can feel stressful, especially in a costly state. He suggests mapping out essential expenses and checking how much of that is already covered by your Social Security and pension. From there, maybe think about ways to fill in any income gaps.

Using your remaining assets wisely could also help you maintain a balanced portfolio, which can safeguard against inflation while allowing for growth during retirement, according to Houston.

There are inventive ways to generate additional income too. For instance, if you have a spare room, consider renting it. If that’s not possible, maybe think about renting out your garage or even space for storage. Ryan Barone, CEO of RentReady, suggests that in pricey areas, the demand for rental spaces can be high. Managing your rentals through an app could streamline the process and let you keep a part-time job if you’d like.

Considering a Financial Advisor?

Engaging with a financial planner on an hourly or project basis might be a smart move. This could allow you to implement strategies for maximizing your savings without a long-term commitment, usually costing between $200 to $500 per hour. This option provides insights without the pressure of ongoing costs.

Finding an advisor who specializes in your specific circumstances is also essential. It’s typically recommended to find a full-service financial advisor who can create a comprehensive plan tailored to you. Stauffer mentions the different types of advisors, from commission-based to fee-only to hybrid models, emphasizing the importance of finding one that fits your needs.

Keel suggests looking into the National Association of Personal Financial Advisors or the Garrett Planning Network to find an advisor focused on educating clients, giving them confidence in their financial decisions. If an advisor pitches a quick-fix solution, that’s a red flag. Instead, the right advisor should ask you questions to understand your needs.

Working with a planner can also help you avoid pitfalls, according to Houston. Their guidance might just help you get the most out of the hard work you’ve put into building your finances.

If you’re experiencing issues with your current financial planner or are searching for a new one, reach out with your questions or concerns.

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