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Brian Lehrer: Brian Lehrer on WNYC. For this membership drive week in addition to the news and issue conversations we have every day, Matt mentioned this, we're doing a few special series, including one will continue right now with Washington Post personal finance columnist Michelle Singletary, who has a great series called Michelle Singletary's Money Milestones For Every Age, she goes decade-by-decade and we are going up the ladder with her.

We started with people in their 20s on Monday, and up and up. Today we'll call it Money Milestones for people roughly 50 to 65, let's say the years just before Social Security and Medicare kick in, or shortly before most people consider retirement. Michelle is also the author of books on personal finance, including her latest which came out last year called What To Do With Your Money When Crisis Hits: A Survival Guide. Michelle, we are aging quickly this week, a decade or so a day. I feel much older than I did on Monday morning. Welcome back.

Michelle Singletary: Again, it's been a great week.

Brian Lehrer: One of your columns is called "I'm in my mid-50s and don't have much saved. Can I afford to retire?" How should people begin to calculate how much is enough?

Michelle Singletary: Well, it's all very individual, but you want to look at all the retirement income that will be coming in, so your Social Security, if you're fortunate enough to have a pension, any savings, and then you do a retirement budget and if it's not all adding up, then you need to probably work a little longer to build it up. You look at all your expenses and lots of times people think, incorrectly, that when they retire, their expenses are going to be cut in half, but you got to still live, you got to pay for house, and got to pay for food.

They often find actually that retirees spend more when they retire initially because they want to travel, they want to do a bunch of things and so they actually end up spending almost as much as if they were still working.

You're looking at all of that and I all the time have people say, "I'm going to retire at 55. I'm going to retire at 60." I say, "Okay, so how's the money going?" They just look at me like, "What do you mean? I'm just going to retire." They haven't done the homework to make sure that they can't afford to retire.

Brian Lehrer: We can take some phone calls, by the way, I didn't give out the number yet for Michelle Singletary, as we've been doing every day. This time, if you are roughly 50 to 65 years old, 212-433 WNYC, 212-433-9692, or tweet a question @BrianLehrer. You have a related column called retirement is around the corner how to play catch up, what do you mean by catch up?

Michelle Singletary: Fortunately, if you have a workplace retirement account, you actually can put in more money if you haven't been saving as much as you want. For 2023, the provision allows you to put in an extra $7,500 up to $7,500, if you're 50 or older, and that's $1,000 bump from last year. It's a great way. Let's say you were in your 20s and 30s and 40s what we've been talking about all week, and life got in the way kids and other responsibilities, and you just couldn't do it, but now, the kids are out expenses are less so you've got some more money.

The law allows you to catch up to where you might have been had you been able to put money in your retirement before that. You just add it to what you're already putting in for your retirement account at work.

Brian Lehrer: Let's take a phone call from Dee in Queens who says she's in the age group. Hi, Dee, you're on WNYC. Thank you for calling in.

Dee: Hello, thank you so much. Yes, I'm 52 years old, I'm single with no kids self-supporting. I want to make a career change and I'm considering going back to school full-time because I'm interested in science, which I don't have a background in, I'm looking at an undergrad degree because I have a previous degree I could do it in two and a half years. I'm looking at the cheapest school Cuny it's about $17,000 for five semesters. I do still have some student loan debt $38,000 which with another year and a half of working for a nonprofit would be forgiven despite the Supreme Court.

I'm trying to figure out about what I could live off of if I were going to school full time and of course I'll apply for scholarships and grants me, maybe I'll have to work part time, but I'm wondering if I should dip into my savings. I know with a brokerage account, I would take a tax hit. I did see that there is a penalty waiver for withdrawing from IRAs for education expenses. I'm just wondering if Miss Singletary can give me some guidance on what I should consider.

Michelle Singletary: Dee, I'm going to ask you a question and I don't think we've identified you enough so I hope you can feel comfortable answering this question. How much do you have for retirement? How much you have saved so far?

Dee: 160,000.

Michelle Singletary: Okay, that's a good amount. I'm going to need to boost that up. I asked you that question to say, I don't think you're ready to pull that trigger yet. I would love for you to get rid of that undergraduate debt first, and free up your budget. Stick with it, get rid of that $38,000, and then look at your budget, so if you're not working, not using your retirement money, because you're not going to use that $160,000 at all, none of it. Could you go back to school, and pay cash without dipping into your retirement?

Brian Lehrer: Meaning if she waits one year, because since-- I gather, since she's in a nonprofit sector, her student loan will actually disappear in a year if I understood the question right.

Michelle Singletary: That's right. Is Dee still there? Dee you still there?

Dee: Yes, I'm still here. If I'm not working, I've got to have some savings to dip into.

Michelle Singletary: That's right.

Dee: Is that what you're saying?

Michelle Singletary: That's what I'm saying. Do you have savings outside of that retirement money that could carry you for the time it would take you to get this degree?

Dee: Well, just the brokerage account, which is part of that amount I mentioned to you.

Michelle Singletary: Then the answer is no. Right?

Dee: Okay.

Michelle Singletary: Listen, no 52, I know I'm older to you so I get it, you're like, "Time is short." Don't pull the trigger on something that's going to actually put you behind. If you have to carry debt to do the graduate school, and you still got that $38,000 and all that kind of stuff, any job that you're going to get all that extra income that you're going to get, even though it might be in a different area where you're interested in, it's going to go to service that debt and you're not going to actually put yourself ahead.

Take some time, take a pause, get rid of that student loan debt, through the public service loan forgiveness program, save up enough so that you can pay for the degree along with whatever scholarships you get, and maybe just take a small part-time job to bridge the gap then go back to school. Then you are actually putting yourself ahead, what you're suggesting is going to put you behind.

Brian Lehrer: All right. That's the pure financial advice. Can we pause for a second and just give Dee some love and some props for wanting to make a full-fledged career change at age 52 and go for a full-time new degree.

Michelle Singletary: Listen, I welcome that you want to do a little change but I'm playing mama right now and I got a short amount of time with you Dee on this program so I'm going to be the tough love Michelle, and you don't do it. Don't do it. Make sure you're prepared first.

Brian Lehrer: Dee good luck, you got me interested in your story so call back sometime and let us know how it goes as you make the transition when you do. Okay?

Dee: All right. Thank you so much.

Michelle Singletary: You are welcome.

Brian Lehrer: Thank you. Funny enough, our next call is also named Dee up in Rochester. Dee you're on WNYC with Michelle Singletary. Hi there.

Dee: Hi, how are you? I'm actually in Yonkers.

Brian Lehrer: Sorry about that.

[crosstalk]

Dee: That's fine.

Brian Lehrer: It's Dee day, everyone named Dee is calling.

Dee: My question is this, I am 58 with eight-year-old twins and I am disabled and now trying to figure out more about what retirement looks like because I think what happens is a lot of people forget that when you are disabled, you still go through retirement. Unfortunately, I was in financial services for so many years and never thought about the fact that we don't think about disability and retirement and preparing for that in the same place. I am also now trying to figure out how do I shore up my retirement, especially with young twins.

Michelle Singletary: Are you on disability insurance or are you still able to work?

Dee: I'm on disability insurance.

Michelle Singletary: Okay, so paying probably what like 70% or 80% of what you earned.

Dee: Exactly. I thankfully had really great advice when I started out working and listened to it on taking private disability insurance as well as I am now supplemented with social security disability insurance.

Michelle Singletary: Right. That's why I asked you that question, not just for you, for those who are listening, she did the right thing by getting disability insurance because you never know and you're more likely to need that insurance than your life insurance. Dee, what I will say to you is in terms of-- you'll have enough for your full retirement once you get past 65. Really the question is the boy or the twins, I don't know if they were boys yet, I didn't know if you told me what they were, but the twins. It sounds like you're concerned like how do I send them to college or that's probably the question you want to ask or you thought you were asking. Right?

Dee: Actually, the college part I'm good with. It is trying to maintain the retirement income because one of the things that I found out after the fact is whatever your retirement income was going to be, it gets decreased because you're now on social security disability. You still have to make up that shortfall along the way. Plus, of course, the fact that you are now retired and you're not able to work for whatever it is, all of that so that disability insurance money disappears at a certain time.

Michelle Singletary: That's true. Then mostly on social security. That is right. [crosstalk] Big expense in your budget is going to be probably housing. Where are you in that situation? Are you close to paying it off? Are you renting? Are you living with someone? That's where you're going to probably have to do the most work to see if you can cut that down.

Dee: Okay. Right now I own so I think what I'm hearing you say is that when we get to be closer to that age, I need to downsize to make sure that everything is covered by the budget that I have.

Michelle Singletary: Perhaps. That's right. If you've got enough equity, you can downsize to something or bring in some renters. I keep saying boys, but the twins, I don't know why say boys, but if once the twins go off the college, you might have more room and you can keep the home and then rent out some of the rooms or downsize. I know there are a lot of people listening, well, isn't there another option? Housing is going to be the biggest part of your budget and if you can reduce that, you might be able to make it work with the income that you will be reduced to once you get into your 60s.

Brian Lehrer: Dee, I hope that's helpful. Thank you so much for your call. Good luck with the twins and everything else that you were talking about. If you're just joining us, we have a few more minutes with Washington Post personal finance columnist Michelle Singletary, her Money Milestones For Every Age series we're going up the ladder with her age-wise all this week. Today we're in the 50 to 65 age group and Jane in Manhattan looks like has a very provocative question that's going to make a lot of ears perk up. I think. Jane, you're on WNYC. Hello. Jane, you're there. Hi.

Jane: Hello.

Brian Lehrer: Hi there. We got you.

Jane: Just wondering if all your wealth is in your spouse's account, what should we be doing if we're in our late 50s and yes.

Michelle Singletary: When you say all your wealth, you mean the retirement money, right?

Jane: Yes.

Michelle Singletary: Are you worried about breaking up or them passing away or what are you worried about Jane?

Jane: Like all of it. Suddenly it's like, this could happen. That could happen.

Michelle Singletary: There are some protections. Are you at stay-at-home spouse or?

Jane: Yes.

Michelle Singletary: You know you can save for your own retirement. Retirement is individual even though you're married. We think of when we're coupled up that everything is in one pot, but you actually save for retirement in your own name. I think you are right that you should and because-- I don't know is your spouse working, so your spouse can open up a spouse or IRA in your name. If all the money's going towards his account or hers, whatever your situation is, so then you can now make sure that you've got retirement money in your name.

I think that that's a discussion that you should definitely have with a financial planner. How do I have retirement money in my name? There are protections for you if you get a divorce. Of course, you get access up to half of that money or there are other things that you can negotiate. Even though it's all in your spouse's name, it's part of your money as well, but I know you don't want to have to feel to figure it out, right? I would definitely have you guys look into a spousal IRA so that you can start saving in your name as well.

Brian Lehrer: Jane, I hope that's helpful. Thank you very much. You also have a column called Your 59 and a Half and Can Tap Your Retirement Fine Without Penalty. Should You? I'll bite. Should you?

Michelle Singletary: [laughs] Probably not unless you're about to retire. You want to let that money stay there and if you already heard, there's a thing with people looking at the retirement account money as maybe helping with some other areas, maybe education or buying a home. Leave that money where it is because its purposes is to help supplement you in retirement. The other calls we heard, you never know what's going to happen. You might come disabled, you might decide you can't work anymore physically. You might not be technically disabled, but you just don't have it to work anymore.

I need you to leave that money alone until you are ready to retire and tap it. Oftentimes when we're in our 50s and late 50s, that's our highest earning years. Hopefully, you're trying to max out what you're putting into your retirement accounts and once you are in that period where you have the freedom to max out, max it out, let that money stay, let compound interest and all that do.

It's wonderful thing and adding up because I tell you, you never know how much you're going to need in retirement and you want to make sure that money stays put. Don't get it unless you are about to be retired and you need it.

Brian Lehrer: One more call. Steven in Jackson Heights, you're on WNYC with Michelle Singletary. Hi Steven.

Steven: Hi Brian. Big fan, longtime listener. Thanks for taking my call. I have a two-prong question. Long-term care insurance and annuities. I'm wondering just what your general take is on those things, if they're a good idea, and if so when one should be looking at buying them and if you have any specific recommendations.

Michelle Singletary: I don't do recommendations, but they can give all kinds of trouble. Long-term care, so long-term care insurance will take care of the expenses for when you can't do daily activities of life like feeding yourself, taking medication, going to the bathroom, and things like that. Medicare does not cover long-term care expenses, Medicaid does, but most people don't. Medicaid is if you don't have a lot of money. As you reach your 50s towards the end of your 50s or 60s, it is the time to look at that because you could potentially be carrying an insurance for 20 or 30 years until you need it.

When you get into your late 70s or 80s, it is a time period in which people need long-term care insurance. It's very expensive and you got to keep it going. If you cannot afford the payments continuously during that period of time, it may not be right for you. If you are fairly healthy, this is the time to start looking at it to supplement, to help take care of you. That's one thing. Then just you've got to look for good policies. The policies are all kind of funky right now. It's difficult to find a good one but you want to find one, it has an inflation rider so that it keeps pace with inflation, and just make sure you understand the policy.

Then annuities, I'm not a big fan. I think they work for some people. I'd like to keep my insurance because annuities are an insurance product. I like to keep my insurance separate and my investments separate. I invest for my retirement and we had term life insurance. My husband and I, we no longer need it because our kids are grown and they all are on their way. They have no college debt. Two of them are working. My son who is on the autism spectrum, he's still getting himself situated. He's in his mid-20s, he's living with us. Everything's fine. We've got things set up for him.

We no longer need life insurance. Life insurance is income replacement. Since they are okay and we have enough in our retirement accounts that if something happens to us, they're going to be just fine. I don't need that part of an annuity in terms of the life insurance and we've got enough to put us in, when we're not going to be put in the ground, we're going to be cremated. I would say if you're going to do it, please, please read everything and understand the fees are very high. They work for some but not most.

Brian Lehrer: Steven, thank you for a call on things that are on a lot of people's minds in the age group for sure. Michelle, let's finish up for today with one follow-up question because I want to linger on that long-term care insurance question for just a second. I think this might be one of the really important pieces of advice that you give in your column for people in their 50s, I guess in particular because I think a lot of people get into their 50s and they're still not thinking about long-term care insurance still. Pretty healthy, active, everything. They're thinking, "Oh, maybe when I'm 85," but when you get to 70, let's say, can you afford long-term care insurance or would then the premium be prohibitive for a lot of people?

Michelle Singletary: Yes, by the time you get to your 70s, if you even qualify, it's going to be very very expensive. The period in which you want to look at it is in your 50s and early 60s. If you're fairly healthy maybe mid to late 60s, but yes. Once you get 70 or older, it's so expensive because you're closer to needing it. Insurance is price-based on-- They really don't want you to use it. If you're closer to using it, of course, the premiums are going to be higher.

There's a window in which it makes sense. If you know that you don't have a lot of money and you really just can't keep these policies up, then there's really no point in starting down that road. If you're going to exhaust all of your money fairly quickly, then you'll qualify for Medicaid and it does cover long-term care. If you are in that window where you can self-insure, you are a great saver. You got boatloads of money, you don't have a mortgage, you can pay for long-term care. You've got a plan in place, you might not need it.

That is the latter. That's my husband and I. We decided to self-insure. The money that we would pay for the policy we've been putting aside. If we don't need it, it's our money. If we need it, it's there. That middle ground is people who don't maybe have as much. They have enough that they don't want to have to spend $3,000 or $4,000 or even $5,000 a month. That is the group in which you should look at long-term care insurance. Maybe you don't have a million or two in your retirement, but you don't want to exhaust all that money. That is the group that should look at long-term care insurance.

Brian Lehrer: Maybe Medicare, not just Medicaid, should fund more long-term care. That is for a policy discussion, not our personal finance conversation with Michelle Singletary Washington Post personal finance columnist whose Money Milestones For Every Age has been so informative for people all week since we started on Monday for people in their 20s. We'll do the final one tomorrow at this time for listeners 65 and up. Michelle, this has been great. Thank you again and talk to you tomorrow.

Michelle Singletary: Oh, wonderful. Look forward to it, and not looking forward to it, because it'll be the end of it.

[laughter]

Brian Lehrer: Thank you, thank you. All right. Brian Lehrer on WNYC. Much more to come.

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