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SMART MONEY, A COLUMN BY BRUCE WILLIAMS

Future looks bleak for this 55-year-old

Monday, October 1, 2012 - 12:01 am

Q.: I am 55 years old and single, and I am feeling the pinch of not having planned for my retirement until now. I clear $295 a week and have a monthly expense of $350 for my car payment. I don’t own a house, so I have no real estate to fall back on, although I don’t have any rent expense, either. My credit card bills are around $1,800 from medical expenses and emergency things. My other monthly expenses run about $250.

I am thinking about getting a zero-interest credit card and combining my credit card bills to get my monthly payment down to $100. I would also like to start investing in a 401(k), but having more money taken out of my monthly income is hard. My health may take a toll if I add a part-time job. Any suggestions? – J.B., via email

A.: You have made an understatement when you say you haven’t planned well. Having a car payment in excess of a week’s pay is absolutely unforgivable. You couldn’t afford that car, and you still can’t. You should consider replacing it with a far less expensive vehicle.

I don’t know where the money would come from to invest in a 401(k). It would certainly be opportune if you could find some extra income. Under ordinary circumstances, I would immediately suggest a part-time job, but at the same time, you should not jeopardize your health.

You mentioned that you have no rent expense at this time. What happens if that all changes? How will you be able to afford rent?

Given your current situation, if your income doesn’t improve, I don’t see you being able to retire for the next 15 years or more. Getting the zero-interest credit card is not the answer, and paying the minimum, or close to it, is also not an answer.

I wish there was something more cheerful that I could pass on to you, but the reality is that Social Security will not provide enough for you to live on, and you have no savings. Good luck.