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Retirement without savings is unsustainable

Struggling with her situation, Joan said she had tracked her spending to try to find some wiggle room. "I wrote down every penny I spent this past month," she said.

Sadly, after fixed expenses, she is left with "$100 to $200 a month to eat [and] put gas in the car." That doesn't go far during this period of record-high inflation, doesn't leave room for cuts, and leaves her vulnerable to relying on debt to pay irregular expenses. In recent months she had to pay almost $3,000 for car repairs and $700 to the dentist, both of which led to a higher card balance. "You have no cushion," commented host Jade Warshaw.

Outside of asking her daughter and ex husband for help, which she found embarrassing, her choices appear extremely limited. Host George Kamel pointed out selling her car would likely not make a dent in her debt.

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What's a broke 86-year-old to do?

With some financial problems, there are no simple solutions.

Kamel suggested rehoming her pet dog to reduce expenses.

Of course, Joan does have her home, which she said is worth around $195,000 to $250,000. Selling it would provide extra cash -- enough to cover her credit card debt. Unfortunately, she'd still need someplace to live.

Kamel initially recognized the downsides of downsizing, warning that, "you have a fixed expense with this paid for house. If you sold it to pay off your credit card debt, that leaves you with an expense that's ongoing and increasing." Warshaw said this option "doesn't really make sense because of the cost of living today."

By the end of the call, however, the hosts seemed to decide that selling the home was the only way out. "I would definitely look at downgrading in house and going to an apartment you pay cash for, getting rid of the credit card debt," Kamel said.

Of course, that's easier said than done as there are moving costs and realtor fees to consider, not to mention the logistical challenges of relocating at nearly 90.

While downsizing might have helped her earlier in retirement by shoring up her finances, a move now might do more harm than good.

There were some important solutions the hosts overlooked, though — including exploring the possibility of benefits, like Supplemental Security Income available to seniors 65 and over with serious financial need, as well as Supplemental Nutrition Assistance Program (SNAP) benefits. USA.gov's benefit finder or the National Council of Aging's BenefitsCheckUp can shed light on resources available to help a struggling senior.

Reaching out to creditors to explain that she's struggling could prompt the card companies to help her find a solution since they know they might otherwise not get paid at all. Struggling seniors are "judgement proof" which means debt collectors cannot go after their exempt fixed incomes like Social Security.


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Christy Bieber Freelance Writer

Christy Bieber a freelance contributor to Moneywise, who has been writing professionally since 2008. She writes about everything related to money management and has been published by NY Post, Fox Business, USA Today, Forbes Advisor, Credible, Credit Karma, and more. She has a JD from UCLA School of Law and a BA in English Media and Communications from the University of Rochester.


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