Four readers ask about how they should save for their golden years.

8 minute read

Especially if you have debt, saving for retirement can seem like both a lofty goal and a big problem. Chairman and CPA Howard Dvorkin has received many questions about retirement from people in very different predicaments. Below are four reader questions that address the relationship between debt and retirement.

Is saving for retirement overrated?

Question: My husband and I are lucky. Our son is living at home and just started trade school to become an HVAC technician, we both have jobs, our house is almost paid for, and we took your advice and cut up all but one of our credit cards. So what’s the problem, right?

Well, I want to start really saving for retirement. My husband says we get some money from our 401Ks at work, and that we’re only 39 and 42. He says there’s all this panic over retirement savings because the too-big-to-fail banks — run by both Republican and Democrat elites — want us to give them our money for 30 years. 

I’m not sure what to think. What do YOU think, Mr. Dvorkin?

— Karen in Arkansas

Howard Dvorkin CPA answers…

I’m not going to argue with your husband about politics. While I have my own views, my job is to help everyone get out of debt — regardless of what they believe.

That said, trust me when I say: You need to save for retirement starting right now.

Unlike the others I’ve answered, you’re a couple who has the income and lacks the debt that prevent so many others from saving for their golden years. Yet your husband believes saving your money will somehow benefit others more than yourselves.

It’s true that when you invest even in a savings account, the bank earns money just as you do. Otherwise, why would they offer you any interest at all? However, your husband makes a sideways point worth stressing: You should always study any fees that take chunks out of your returns. In fact, the SEC has a PDF worth reading called How Fees and Expenses Affect Your Investment Portfolio. Trust me, it’s not as boring as it sounds, and the three minutes it takes to read it can save you a lot of money.

So the bottom line, Karen: It’s never too early to start saving for retirement.

When should I start saving?

Question: I’m a 57-year-old divorcee with a grown daughter on her own. Somehow, she got through college with very little in student loans, which she’s already paying off. I’m proud of her, except for one thing: She refuses to save for retirement.

I realize it’s difficult to convince a 24-year-old to set aside even a dime that won’t be spent for more than 40 years. She tells me she simply has not even a dollar to invest in her future. Can you give some wisdom to open her eyes? 

— Audra in Georgia

Howard Dvorkin CPA answers…

To be blunt, I don’t believe most people when they say they can’t save anything. I’m not insensitive to the crushing poverty in this country, nor to the plight of single parents struggling to provide for their children.

However, many of the lamest excuses I hear are from those who are gainfully employed and decidedly middle class and above: “I can’t spare one dollar, Howard. Really, there’s no fat in my budget.”

Then they take a sip of their $6 gourmet coffee.

So here is how to save for retirement starting today — 10 ways your daughter (and everyone else) can save $10 a week. If she (and they) take that $40 a month and invest it in any retirement account, they’ll have a good head start on their golden years…

1. Drive less

Grab a friendly co-worker and share a ride to work. Or better yet, walk, bike, or take public transportation. If you’re running errands, go with a friend, or sit down and plan out exactly what you need and where to get it so you don’t make tons of pointless trips, which wastes gas and time.

2. Skip eating out

Skipping lunch just once a week will save you at least $10 in most parts of the country. Pack your lunch every day and save even more.

3. When you do eat out, order water

Appetizers, desserts, alcohol, and soda are all promoted by restaurants and servers to get customers to pay more on their overall bill.

4. Make your own cleaning products

Using household items that you find in your pantry to clean can save your wallet and the environment. White vinegar cleans most surfaces, and baking powder can be used to scour stains away.

5. Cut your utility bill

Turn your heat down in the winter and wear layers instead. Open your windows in the summer to catch the breeze. Get a low-flow showerhead so you use less water. Turn off your TV and lights when you aren’t home. Let your laundry air dry or use an outdoor clothesline instead of an electric dryer.

6. Reuse and recycle

Cloth napkins, cloth shopping bags, washcloths — you only have to buy these once, and you can reuse them instead of throwing them away as you would with plastic ware. Recycle your aluminum cans and plastic bottles, then turn them in at recycling centers, which pay you by weight.

7. Find creative ways to heat your home in the winter

If you bake something in the oven, open the oven door afterward to let the heat out into your home. Open the shades to let sunlight in. Close the doors of each room so the heat doesn’t escape. Bundle up under blankets and sweaters at night.

8. Cut down on your grocery bill

Don’t stop eating — that’s not healthy — but there are so many ways you can save at the grocery store. Don’t go shopping when you’re hungry (you’ll buy more) and buy generic brands where you can. Scan an online search engine like before you go. Buy in bulk from places like Costco and Sam’s Club, and shop at your local farmers market for fresh food.

9. Don’t buy what you can do yourself

This applies to everything from home repairs to makeup. You can get a French manicure, wax your eyebrows, and color your hair yourself (or with some help from a friend.) Fix your own leaks and do your own paint jobs around the house, with a little help from some online tutorials if you need it.

10. Change your spending philosophy

You know why credit cards work so well for the companies who issue them? Because people use them for impulse shopping and don’t stop to think about what they’re buying. Before making a purchase, stop and think about it for a few minutes. Do you really need this? How long will this last you? Can you survive without it for a while?

So let’s say you utilize one or all of these options. What should you do with all these savings?

You should start with opening a Roth IRA account. It’s easy, cheap, and you can open one online. The most crucial part of opening an IRA account is starting as early as possible, because compound interest will make your savings grow exponentially over the years. Compare these numbers…

A 25-year-old invests 10 percent of her $50,000 salary each year, and retires with almost exactly a million dollars at age 65. By contrast, a 35-year old making the same contribution but starting ten years later will retire with only half a million.

Hope that helps sway your daughter, Audra. Tell me what she says.

Is your debt getting in the way of saving for retirement? We can help.

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Is it too late to start saving for retirement?

Question: My husband and I both turned 50 last month, and while we were happy with all the well wishes and even a surprise party for us both, we’re actually panicked about retirement. With our older daughter graduated from nursing school, I want to start urgently saving. My husband is a good man, but he’s already defeated.

He keeps saying, “Why bother? We’re so far behind, we might as well enjoy our lives right now. We’ll just have to keep working.” I love him, but I want to kill him. How do I convince him it’s never too late to starting saving for retirement?

— Samantha in Arkansas

Howard Dvorkin CPA answers…

Almost every week, I’m asked by one spouse to tell the other, “You’re wrong!” And almost every week, the answer is more nuanced than that. One spouse may be more right, but seldom is one totally right and the other is totally wrong.

In this case, your husband is totally wrong — completely and 100 percent, with not even a shadow of a doubt.

Your timing is impeccable, Samantha, because just last month, I read a report on this very topic. Wells Fargo questioned more than 1,000 Americans of all ages and found those between the ages of 55 and 59 have saved three times as much as those 60 or older.

Why? Because regular savings add up, and so does the interest on those savings. Obviously, the earlier you start saving, the more you’ll have at retirement.

“This study shows what a tremendous difference a few years can make when it comes to retirement savings,” says Wells Fargo’s  Joe Ready. “The fact that people in their late 50s have three times the savings of those age 60 or older shows that starting early and saving consistently are key to retirement saving.”

Your husband isn’t alone in believing he’ll just work longer and save later. The poll shows one-third of working Americans between the ages of 55 and 59 “plan to save for retirement later in order to make up for not saving enough now.” I seriously doubt they will, and I’m not the only one.

“People who think working longer – perhaps into their 70s or later – is a retirement plan should realize they may not be able to work longer,” Ready says. “Unforeseen circumstances crop up, and this is really important for people to recognize.”

So you’re right, Samantha, but that’s cold comfort unless there’s a solution to your dilemma. You didn’t mention if you’re carrying any debt now – from credit card debt to student loan debt for your daughter – but the first step to saving for retirement is to retire those debts.

Peruse and even use our interactive calculators, but if you want to talk to a certified credit counselor and get answers right away, call us at  for a free debt analysis.

Will I be able to retire after two decades out of work?

Question: My youngest starts college this fall, and I’ve just recently started working again. (My husband and I scrimped and saved so I could stay at home and raise two boys.)

You might think hubbie and I would be celebrating our new-found freedom, but instead, I’m worried about our retirement. While he has a decent 401(k), I was out of the workforce for two decades. Now that I’m working again, I’m trying to build up my own 401(k). But my balances are so small, I don’t know how I’m ever going to catch up. 

Any advice, Howard?

— Cynthia in Oregon

Howard Dvorkin CPA answers…

I got your email only a few days before I read a sad report from the TransAmerica Center for Retirement Studies. You’ve probably never heard of the place, but they do amazing research.

What they found just this month…

  • Only 12 percent of women are “very confident” they’ll “fully retire with a comfortable lifestyle.”
  • A whopping 56 percent of women plan to retire after age 65 — or not at all.
  • 81 percent of women are concerned that “Social Security won’t be there for them when they are ready to retire.”

The scariest numbers of them all: “Women estimate that they will need to have saved $1 million  in order to feel financially secure in retirement.”

So now that I’ve terrified you, let’s talk about your more pleasant options. For starters, you and I spoke after I received your email, and there’s some good news: You have precious little credit card debt. You and your husband are carrying a balance of $1,700. So the first step is to pay that off.

How does that affect your retirement? Well, the interest on that $1,700 is going to a credit card company instead of you.

Second, both of your sons are in college but fortunately, you (and they) made the smart choice of attending a local community college for their first two years — something I suggested to another reader years ago.

Third, you had long ago purchased a 529 Plan for your sons’ education. So simply put, you don’t have to choose between your children’s education and your own retirement. I hope all the younger couples reading this take note.

What you need to do from now on

With these wise fiscal decisions behind you, let’s look ahead…

1. Consider downsizing. Once your youngest son is out of the house, can you move into a smaller house? The difference between selling a big house and moving into a small one can be directly invested for your retirement. Plus, you’ll save on everything from insurance to heating and cooling costs.

2. Go high tech. You sound like a responsible couple, but I’ve counseled older couples who still budget with paper and pen. Try a free online budgeting tool, which allows you to experiment with moving money around and seeing how the savings add up.

3. Join AARP. I have no connection to the organization, but I recommend it simply because it focuses on retirement issues I don’t have the space to explore here. Check out what’s available for free online, and consider joining if you think you’ll avail yourself of the AARP discount programs, which can total more than the annual membership fee.

Bottom line, Cynthia: Retirement is a scary financial situation for many Americans, but you’re positioned better than most. Keep doing what you’re doing.

Get rid of your debt and feel better about saving for retirement.

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About the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

I’m a certified public accountant who has authored two books on getting out of debt, Credit Hell and Power Up, and I am one of the personal finance experts for I have focused my professional endeavors in the consumer finance, technology, media and real estate industries creating not only, but also Financial Apps and Start Fresh Today, among others. My personal finance advice has been included in countless articles, and has appeared in the New York Times, the Washington Post, Forbes and Entrepreneur as well as virtually every national and local newspaper in the country. Everyone should have a reason for living that’s bigger than themselves, and besides my family, mine is this: Teaching Americans how to live happily within their means. To me, money is not the root of all evil. Poor money management is. Money cannot buy happiness, but going into debt always buys misery. That’s why I launched I’m glad you’re here.


Howard Dvorkin, CPA

CPA and Chairman

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