This guest post is by reader Mike in New Hampshire. Mike wrote an Ask the Readers article last year, looking for ideas to help his dad get set for retirement. He wrote to us recently and asked if he could update their story. We were only too glad to provide a forum for them.

It has been a little over a year since I wrote in looking for suggestions on how I could help my father retire. I want to thank everyone so much for the comments, ideas, and support – they came at a time when I really needed it. In the end the solutions came not from me but from the relationships he had formed and the sacrifices he had made over the years. Everyone loves a story with a happy ending, right? Let’s get to it.

I know the community gets annoyed when specifics are not available so I will try to be as detailed as possible on the financials. Last May when I wrote the initial piece my father was going to turn 65 in December and worked in a career that he could no longer stand with no retirement savings. He made about $45K per year, had a mortgage of around $400-500/month, and had about $20K in cash savings that was offset by nearly the same amount in credit card and home equity balances.

He also had about $12K in college loans that he continues to pay as part of a promise that if I did well, he would help with the costs. (Funny side note: a few people commented that I should just pay these off without telling him. He would have been insanely ticked that I messed with his second-favorite tax deduction!) At that point I was considering multiple options and was even entertaining the idea of finishing my basement so he could move in and utilize his house as an income property. He was miserable and I was getting there as I ran out of ideas to help the man who had given up so much for me.

And then…

Over the summer a couple of really important things happened. An old friend who runs an auto repair shop offered to give him a part-time job working in the office for about $300 per week net income. This was perfect for three reasons: the work was right in his wheelhouse without being stressful, it was only three days a week with plenty of flexibility, and, in addition to needing money, he needed something to do since drinking beer and watching TV is not a legitimate hobby.

Will his part-time job affect Social Security?

I went with him to his meeting at the Social Security Administration office and we learned that even working part time he could still get his full benefit (93 percent based on retiring at 65), which came to a little less than $1,850 per month. This part was actually very surprising in terms of how much he could earn and still be able to collect his full benefit – it was a LOT higher than we expected. Between the $1,850 from SS and the $1,200 from his part-time job, he suddenly had replaced his income while being able to work three days a week in a stress-free environment. Not a dream retirement on an island, but for someone who never really planned or saved, it’s a great deal.

Getting medical care via the VA

The only thing left to worry about was the elephant in the room: health benefits. My father had proudly served in the Army and was stationed in Germany for several years in the ’70s, but he had never set foot in an actual war zone. As a result, he was told repeatedly that he did not qualify for full VA health benefits. Through a friend he learned of a gentleman who specialized in representing veterans to help with getting their approval, free of charge. Not sure how he did it or why a veteran would even need someone to fight for this cause but, politics aside, my father eventually was approved for his full benefit.

I had heard some interesting stories about VA hospitals, but from my perspective he is getting better-quality care there than he was before. He came back from his initial physical asking me about a new word he learned – obesity! It’s not funny, but it was a little comical after years of his regular physician just prescribing pills and telling him to keep doing what he was doing, much to my dismay.

The happy beginning

He didn’t always make the right decisions and I have chosen a much different path for myself, but in the end it worked out OK. This was mainly due to him having pretty low expenses in the needs department and realizing that it was time to tame his wants/waste, utilizing the resources/network available to him, and not giving up or easily accepting no as an answer.

On the 4th of July I was able to drink a beer and watch some World Cup with my pops. The World Cup is a fairly rare occurrence as it comes around only once every four years. Even rarer than that, it was Dad’s first summer holiday off in nearly 40 years. He was happy, I was happy, and we even had some new things to talk about. The man who once said he would just work until he died has suddenly become a big fan of budgeting, paying off debt, and managing to build his savings.

This article is about Reader Stories, Retirement

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This article is by editor Ellen Cannon.

I’ve been single since I was divorced in my 30s, and I’ve been planning my retirement on the assumption that I will be single till the end of my days. I’m feeling comfortable financially with where I am in my plan. Yet when I was offered the opportunity to talk to Jacob Gold, a Certified Financial Planner and retirement coach with Voya Financial, about women and retirement, I said yes in a hurry.

On average, women outlive men by five or six years, so even if a woman is married now, chances are she will be living some of her retirement as a single. Gold is based in Scottsdale, Arizona, a popular retirement destination and he works with a lot of retirees. “More and more, a large segment of our practice is individuals who are single or newly widowed,” Gold says. “Often they have not discussed being single in retirement.”

Basic planning is the same

So, what differences are there in retirement planning for a single versus a couple?

“When someone is married, they have a level of comfort and security – you have someone to rely on,” he explains. “When you’re single, you have some uncertainty. The need for long term care is definitely elevated when one is single. You don’t want to be a burden on family and friends. We see a lot of single individuals purchase long-term-care policies, something that will take the edge off their financial situation and give them more security.”

As for a single needing to save more or less than a couple, Gold says you still need to do a retirement needs analysis. “Everyone needs to determine their desired income in retirement and then back that into an equation. It’s all mathematical,” he says. “The withdrawal rate is the same for a couple as it is for a single – usually 5 percent. The question is always ‘How much money do you want to come into the household every year?’”

More than money

I’ve been focused on saving for retirement and I am a sucker for every retirement calculator out there. How much money do I need? What’s my number? But when I asked Gold if there was anything special single women — or women who may be married now but may be widows in the future – needed to do to be ready for retirement, his answer surprised me. It wasn’t about money.

“A client once told me, ‘In order for someone to be happy in life, they have to love someone, look forward to something, and they have to be doing something,’” Gold relates. When he is working on a financial plan for clients, he says, he makes sure this aspect is part of the discussion. “Individuals need to have a good support group – neighbors, friends, animals. They also need a support group for economic issues, financial discussions. People get overwhelmed with noise, conflicting information. A support system is quite important in finances.”

For singles, he says, “a support group is necessary to have people to bounce ideas off, to get opinions in a non-intrusive environment. If someone doesn’t have that support system, people are reactive” to the fluctuations of the stock market and the economy.

Investing in a support group

This idea of a support group made me think of women’s investment clubs, which were the rage in the go-go ’90s. “The Beardstown Ladies’ Common-Sense Investment Guide” was a best-seller because the group consisted of 16 investing novices who had success investing in stocks. They claimed an annual return of 20 percent on their portfolio, and were the darlings of the media, especially at a time when people were quitting their jobs to become day traders. Well, after all the hype, reporters actually looked at their books, and their ROI was much lower – less than 10 percent annually, or what anyone could have earned in an S&P 500 Index fund during that time.

So I asked Gold what he thinks of investment clubs for women. “I think they’re fantastic. Any environment that helps them learn about finance, talk about economics, the financial world, is a good thing.”

He says that many of his clients want something with “sizzle” so he encourages them to open a low-cost brokerage account, invest a small amount, and play with it. “They learn from experience, they get wounded, but they learn to appreciate the conservative, balanced approach to investing. People fear what they don’t understand, so learning about investing makes it less intimidating.” Whether you go it alone or learn about investing with a group, it is important to overcome the fear of investing.

So, readers, are you thinking about retirement as a single? Are you making a plan to be single even if you’re half of a couple now? Men, do you ever talk to your partner about the prospect of being single in retirement? Do you have a support group?

For me, developing a stronger support group is my next step in retirement planning.

This article is by staff writer Holly Johnson.

Your car breaks down on the side of the road … again. It’s rush hour and it won’t start. You have to have it towed and you’re not happy about it. At all.

So what do you do?

You head to the local dealership in a fury, ready to replace it with something far more reliable, but also affordable. But the dealership has a few tricks up their sleeve and, according to Paul (the salesman helping you), it must be your lucky day. Amazingly, your car died at the most opportune time in history.

“Amazing deals are on the table for today only, folks, and we are in the midst of a complete liquidation,” says Paul. “Prices are being slashed left and right, and you need to act fast.”

“This is the sale of the century!!!”

So you bite, and before you know it you’re standing in front of a shiny, new sedan covered with stickers exclaiming things like “0 PERCENT INTEREST” and “$2,500 CASH BACK.”

You slide into the plastic-covered seat and breathe in that indescribable new car smell. You play with the knobs and the radio, and you notice how little squares of plastic have been methodically placed to shelter the dashboard from the germs and fingerprints of anyone who dare touch this car. The flawless upholstery is still largely untouched, never having been exposed to the rain, the sludge of winter, or your toddler’s leaky sippy cup. You like it.

“Pick your payment and I’ll make it work,” says Paul.

And the rest is history.

The high cost of a low monthly payment

This kind of scenario happens every day of the year and all over the country. It happened to me when I was 22 years old. At the time, I had a job making something like $8 an hour but had just gotten my residential real estate license. I headed to the dealership, convinced that I needed a newer car to drive around all of the clients I would surely have. (Feel free to laugh.) Soon I was talking to a shark of a salesman — a nice guy — who used buzz words like “elegant,” “sophisticated,” and “successful” to describe how I could look in something new. And I bought it all hook, line, and sinker.

Even though I went to the dealership with something much more modest in mind, I pulled out of there with a brand new Mitsubishi Galant, a $24,000 loan, and a monthly payment somewhere close to $500. Even worse, I quickly found out that I was a terrible saleswoman and never sold a thing.

But I still had that payment.

Car payments: ‘Til death do us part

And I’m not the only one. A recent study from Experian shows that Americans continue to spend lavishly on new cars, despite the fact that wages have mostly stagnated and the median household income continues to hover at around $51,000 per year. A few of the key findings from Experian’s report:

  • The average car loan for a new vehicle climbed to $27,430 in Q4 of 2013, up from $26,691 the year before.
  • The average monthly payment for a new car loan rose to $471/month.

According to Experian, new car leases are also on the rise accounting for 28.4 percent of all new vehicles financed in Q4 2013 and with an average payment of $420 per month.

“Leasing continues to grow in popularity among car shoppers, especially those hoping to stay within a strict monthly budget,” Melinda Zabritski, senior director of automotive credit for Experian Automotive, said in a press release. “Our analysis this quarter showed that the average monthly lease payment was $51 lower than the average loan payment, which can make a big difference to consumers trying to stretch their dollar.”

But what if…

The new car industry probably loves hearing that new car loans continue to rise. But the family budget? Not so much. At nearly $500 per month, that payment is as much as some families spend on groceries or even a small mortgage.

But what if you chose to do things differently and forgo a new vehicle every five years? What if you drove something older and cheaper and paid it off? Or paid cash to begin with?

What could you do with an extra $471 per month? What would that mean to your bottom line? A few ideas:

  • You could pay down debt. No matter where you are in your financial journey, freeing up an additional $471 monthly could make a world of difference.
  • You could save it. Pocketing the average car payment for five years would mean adding another $28,260 to your savings.
  • You could invest it. Investing $471 each month into an account earning 4 percent would yield $31.837.57 after five years. Invest that amount for ten years and you could be sitting on $70,572.85.

And that’s not all. Imagine having an extra $471 each month to help your kids pay for college, or using it to beef up your dream vacation fund. You could even set it aside and use it to pay for your next car with cash. After all, whatever you’re driving won’t last forever.

And obviously, the choice isn’t just between buying a new car and keeping your old one. Some people drive considerably more than most people and need something reliable. Others want the “new car warranty” that protects them from out-of-pocket repairs and the worst-case scenario of getting stuck with a lemon. Fortunately, the average car loan can easily be cut in half on even a new car, simply by choosing an inexpensive model. even offers a list of the cheapest 2014 models that start at considerably less than the average car loan, including three that cost around half:

  • 2014 Chevrolet Spark — $12,995
  • 2014 Mitsubishi Mirage — $13,790
  • 2014 Nissan Versa — $13,800

You can even shop around for a reliable used car. Remember, the experts say that a new car loses 20 percent of its value within a year and up to 60 percent of its value within five years. If you have to replace your car, consider buying a used model with low mileage and a warranty.

Break up with your car payment … for good

The new car smell, the way your friends ooohhhh and ahhhhh as you pull into your driveway, the sense of pride you feel when you pick your kids up at school, all of that is an illusion – a fantasy -- perpetuated by an industry that desperately wants you to see your new car as a symbol of your status and a sign of success.

We’re paying dearly for the privilege and giving up far more than what we get in return. Next time you are in the market for reliable transportation, don’t forget to run the numbers. Calculate the real cost of a new car and ask yourself, “Is it worth what I’m giving up?”

Chances are, the answer will be no.

This article is by staff writer Kristin Wong.

I’ll admit it. I’m a sucker for money psychology studies. And it’s not just because I write about money. On a sheer curiosity level, they’re fascinating.

But they also serve as a great reminder that money is more about mind than it is about math.

It’s interesting to see exactly how our brains work when it comes to habits like spending and saving. And not only is it interesting, it can be helpful too. Understanding how we’re wired helps us have a better understanding of our own individual money habits. This is why articles on sneaky marketing tactics are so popular — they’re helpful! It helps to know how our subconscious is manipulated to spend more so we can consciously do something about it.

I was impressed when April Dykman wrote about Keith Chen last year. He’s the behavioral economist who studies the link between language and savings rates. Basically, Chen’s findings were enough for him to assert:

If you speak a language that doesn’t distinguish strongly between the present and the future, you save a lot more because the future feels closer. If you speak a language that separates present and future events, the future feels more distant, which makes it harder to do things to care for your future self like save money, exercise, and eat better.”

Obviously, this isn’t to say we should all change the languages we speak to get rid of our concept of the future. We’ve talked about linking our present and future selves before, and it does help to be aware that our language can be yet another barrier in doing this. But it doesn’t stop there. I’ve come across quite a few seemingly “weird” ways our financial habits are affected. Here are three more that I came across recently.

Disorganization leads to impulse spending

Here’s one advantage to being a neat freak, I guess.

Researchers from the University of British Columbia and the Cheung Kong Graduate School of Business found that a disorganized environment can lead to impulse spending. According to the Chicago Tribune:

“…in experiments the authors found that people in a cluttered room were more likely to pay higher prices for products, such as a TV or movie tickets, compared with people in an organized room, according to the study, ‘Environmental Disorder Leads to Self-Regulatory Failure.’ Researchers predicted that if a person was responsible for his or her own messy environment — rather than ones created by researchers in the experiments — the effect would be even more depleting to their self-control.”

The idea is that organization makes you feel more in control. And when you have more self-control, you’re less likely to give in to impulsive shopping decisions. You wouldn’t typically think cleanliness and spending affect each other, but your environment can have a subtle impact on your feelings of self-control.

We’re more likely to spend dirty money

A study from a couple of years ago found that our spending is also affected by, simply, the way our money looks.

Researchers from the University of Guelph found that we’re more likely to spend dirty, crumpled up bills and hold onto our new bills — except in social situations. When we’re trying to impress someone, we usually reach for those new, good-looking bills. According to the University:

“In five different studies, the researchers gave subjects new or old bills and asked them to shop and spend. In all the studies, people spent more and took more chances with older worn money…’Basically, the physical appearance of money matters more than traditionally thought,’ said Theodore Noseworthy, a professor in Guelph’s Department of Marketing and Consumer Studies…”

They go on about how we tend to think of money as symbolic rather than a product itself. But this study shows that we do see some intrinsic value in money, in and of itself. And this is weird, because a dirty $10 bill will buy you the same amount as a clean $10 bill. We know that, and, somehow, we still value the clean bill.

We can use this knowledge to our advantage when it comes to paying with cash. You might try to only keep new, crisp bills in your pocket, for example. It might seem impractical and silly, but if these studies are any indication, human behavior often is impractical and silly.

We’re less likely to spend larger bills

Similarly, we’re less likely to spend larger bills. Researchers Priya Raghubir and Joydeep Srivastava conducted a series of studies that found when people had larger bills, they were less likely to spend it than people with smaller bills or coins.

But there was an interesting twist: When the subjects did decide to spend money, those who made purchases with large bills spent more, overall, than those with small bills.

It’s actually been coined “denomination effect.” In their paper, the researchers conclude:

“The results suggest that the denomination effect occurs because large denominations are psychologically less fungible than smaller ones, allowing them to be used as a strategic device to control and regulate spending.”

In an article for Psychology Today, researcher and author Art Markman explains that this happens because of how we associate different values of currency. Simply put, small bills remind us of small purchases — like buying a cup of coffee; large bills are associated with large purchases. Our brains make these associations, and the associations affect our spending.

Markman suggests a pretty simple way to use this information to your advantage:

“If you are the sort of person who tends to blow through a lot of money making lots of small purchases, then you should probably avoid carrying lots of small bills with you…If you are the sort of person who tends to make large purchases on impulse (that is, you are penny wise and pound foolish), then you may want to avoid carrying around large bills… Instead, you should probably carry around a small amount of money in small bills to keep yourself from over-reaching.”

A lot of this seems ridiculous, right? Our brains should think practically and logically. We should understand that five $20 bills are the same as one $100 bill.

But again, money is more about mind than it is about math. This is why, as silly as it might seem, the envelope method works. It’s why the debt snowball method works.

Often, our brains aren’t practical. They’re weird. Rather than try to deny that fact, it might make more sense to understand it. These studies are always debatable, but a little awareness about human nature can help you work with your habits and develop better ones.

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