Sharon Largé has raised four children, helped raise two stepchildren, worked so hard as a volunteer that she’s won service awards, held traditional office jobs and been married twice. As she nears her 70th birthday Saturday, she’s still busy. She’s working for a health-care system on the Eastside, catering for family gatherings and volunteering at a winery — a project she calls her “creative outlet.”
She’s been a devoted saver over the years, the proverbial mother who eats the chicken necks so her kids can have the drumsticks. But as she considers entering retirement she worries if she’s saved enough.
She didn’t expect to enter retirement single. In 2008, she ended a 16-year relationship. And as a result, she worries about whether she’s sufficiently prepared.
“I see so many women my age who aren’t confident about making choices for themselves,” she says. “I saw that I wasn’t very confident.”
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To double-check how she’s doing and make changes before she leaps, Largé completed an online survey to participate in a free financial assessment from a member of the Puget Sound Chapter of the Financial Planning Association. She was paired with Maureen Jones, a certified financial planner with Seattle-based Lakeview Financial Group.
“What many people need help with is what I call ‘retirement income planning,’ ” Jones says. “They need help figuring out how to manage what they’ve amassed, and how to use it as income.”
Largé has accrued about $580,000 in retirement savings — composed of about $103,000 in cash, IRAs worth $270,000, and 401(a) and 403(b) retirement accounts through employers that are worth about $207,000.
Jones praised Largé for working until age 70, delaying Social Security withdrawals so she can maximize her future benefit, and the fact that she’s debt-free.
The adviser also approved of Largé’s longstanding savings habit and praised her for renting — a lifestyle choice some older adults delay to their financial and medical detriment.
Because Largé is renting a former co-worker’s town house in the Issaquah area for $800 a month — far less than her former $1,300 rent, yet walkable to shops and services — she’s living well but thriftily.
She continues to work in a job she expects to keep through late June, if not longer, depending on whether her company can extend her employment.
She’s also collecting Social Security through her former spouse — a benefit available to people married for at least a decade, regardless of whether they remain married. Doing this does not impact the spouse’s (or ex-spouse’s) benefit amount.
When Largé turns 70, she will have to begin drawing on her own Social Security, which will pay her $23,900 annually.
And during the fourth quarter of 2014, when she will be 70½, she’ll be required to begin drawing minimum distributions from her retirement accounts — whether she wants to or not.
She knows she has to take the distributions or face steep penalties, but she’s hesitant: Has she saved enough to begin spending her savings?
Largé, for all her good financial habits, did have room for improvement, Jones says. She hasn’t monitored her investments regularly, has sometimes been too conservative in her investment choices and at other times too risky.
“She needs to put her money to work in a more diversified way so it beats inflation,” Jones notes.
Largé’s portfolio is currently 19 percent stocks and 81 percent cash and bonds — a typical mix for a person nearing retirement age. Jones, however, suggests that she shift her investment mix from its somewhat conservative approach to a moderate-risk portfolio.
She’ll need to reassign some investments, and in doing so sell some of her domestic large-cap stocks and reduce by 33 percent her investments in natural-resources stocks.
She’ll need to redistribute some of her cash into income-producing investments, add to her international-equities holdings, add to her intermediate government/corporate assets, and add to her global bond investments.
In addition, she very much needs to invest in long-term health-care insurance.
“The adviser told me four out of five women my age need to draw on long-term health-care insurance,” Largé said. They’re researching options that would run her about $200 to $300 per month — options Jones characterized as smaller policies that could help contribute a portion of future health-care needs, which Largé should otherwise be able to fund independently.
Jones has calculated that Largé needs about $44,000 per year during retirement — assuming she makes some portfolio shifts and invests in long-term health-care insurance to help with potential medical expenses. With about $24,000 coming from Social Security, Largé has a cushion from which to draw the rest.
Fortunately, Jones forecasts that with a few changes Largé will have enough money until 2041 — when she’d be 95.
The news is good for Largé, who wasn’t sure how her retirement would pencil out. All her children, not knowing her financial situation, have invited her to live with them if she wants or feels the need to do that.
But that’s not a necessity, not at all.
“I have options,” Largé says. “It’s such a gift.”
Jane Hodges is a freelance writer who lives in Seattle.