For Bill Tuck and Linda Weller, the reasons for moving to Seattle were twofold.  They craved a greener place than Riverside in Southern California, both monetarily and literally. And they say Seattle has delivered on both counts.

Linda is a medical assistant at a Seattle-based primary clinic operator and Bill is a parts manager for a big plumbing company. They each make about $50,000 a year with overtime and before taxes, which places them above the median household income of $93,500 in Seattle, according to the U.S. Census Bureau. Their apartment south of the Fremont Bridge costs $1,300 a month — a great deal for the Queen Anne neighborhood.

So why, at 52 and 53 years old, do Bill and Linda have almost nothing saved for retirement — and at the end of each month a zero balance in checking and savings? It’s because of something that followed them from California: debt.

“I’m going to be 54 in March,” Linda says. “I’m working so hard and I don’t have a lot to show for it. It’s because of poor decisions that I made starting in my 20s.”

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Linda owes $7,000 in medical bills and Bill owes $10,000 in medical bills. Linda, an X-ray technician, pays $400 a month toward $17,000 in school loans. Bill owes $4,000 in back taxes in California and his wages are being garnished $387 a month. Linda pays $160 a month for a storage unit in California and has a combined balance of $700 on two credit cards.

Bill has no credit cards. Linda has an ATM card and wishes she didn’t.


“I’m like an alcoholic with my ATM,” Linda admits. “Swipe, swipe, swipe!”

“I’ve been irresponsible about money,” Bill says.

The couple has lots of company. Household debt increased to $13.86 trillion in the second quarter of 2019 — a total that is $1.2 trillion higher than during the depths of the 2008 recession, according to the Federal Reserve Bank of New York.

Linda and Bill have been together 11 years. They are both divorced, with two grown daughters each. Linda gives one daughter $300 a month to help pay for a postgraduate program.

After settling in Seattle three years ago, the couple promised to turn over a new leaf with their finances. And they were saving money, but those dollars evaporated when their dog needed emergency surgery.

They were feeling pretty low when they applied for The Seattle Times Money Makeover. The Times and the Financial Planning Association of Puget Sound put the couple in touch with Jayson Owens, a certified financial planner with Bright Road Wealth Management in Tacoma, who volunteered his time to set up a plan.

The B-word

The most important goal, the planner said, was to start saving money. But before Bill and Linda can do that, they have to figure out where it’s going.


“My overall impression is that this is a case of needing budgeting work,” Owens says.

While many people look at the word “budget” and think “bummer,” Owens describes it as a blueprint that helps people realize their goals. He recommended a detailed zero-sum budget for Bill and Linda because it gives every dollar a job.

There’s a popular app that uses a budgeting method called “You Need a Budget” (YNAB), and Owens urged Linda and Bill to sign up for a two-month free trial. He suggested watching the video on the YNAB website with a cup of coffee on a weekend morning — and setting their account up as they watch.

“We will do it,” Linda says. “It is time!”

Stuff it away

Because Linda and Bill are in their 50s, Owens says they “need to start stuffing money away as fast as they can.” The first thing they need is a $7,500 emergency fund.

According to a report by the Federal Reserve, nearly half of Americans couldn’t cover an unexpected $400 expense without borrowing the money or selling something. There are millions of people who are in the same boat as Bill and Linda — a boat without life jackets.

Owens suggested the same strategy for Bill and Linda that he uses: Keep emergency fund cash out of your grasp so you can’t spend it.


“That’s what I do when money is looking at me. It’s asking me to buy a new bicycle,” Owens says with a laugh. “Hey, I’m a planner but I’m human!”

The way to get an emergency fund jump-started, he says, is to set up an automatic transfer into a high-interest savings account. The target for this money is not, Owens points out, Bill and Linda’s regular checking or savings.

Open a high-interest savings account for new deposits in an online bank that is paying around 2% interest, Owens advises.

Even as the couple works on the emergency fund, the planner told them to begin saving for retirement. Bill and Linda both had 401(k) retirement plans in California — and both of them cracked their nest eggs wide open when times got tough. Now they are starting over.

“We could write a book about all the mistakes we’ve made,” Linda says. She’s determined to share the planner’s advice with her children so their financial playbook looks a lot different.

Vowing to get it right this time, Linda is putting 6% of her salary away and getting a 3% match from her employers. She has $3,000 in her 401(k).


Bill doesn’t get a match at his work, but Owens urged him to put a healthy percentage of his salary in a 401(k) anyway.

What Bill does have is a pension. When he retires, he expects to collect about $550 a month from a defined-benefit pension provided by the International Brotherhood of Teamsters. He earned the benefit in California while working as a trucking-company dispatcher.

“I would have gotten $1,100 a month but through a divorce settlement my ex-wife got half of my pension,” Bill says, adding that he’s grateful to have a pension because he knows they are becoming rare.

Only 18% of private-industry employees were offered a traditional pension plan in 2018, according to Bureau of Labor Statistics data.

In addition to the pension and 401(k) accounts, Owens instructed Bill and Linda to each set up a traditional IRA, starting with direct deposits of $100 a month and slowly increasing that amount to $7,000 each per year as their debts are paid off.

“If you can find a way to reprioritize your expenses to pay an additional $400 a month towards your debt, you can be debt free in 29 months,” Owens counseled the couple. “Given your income, all it will take is a clear awareness and tracking of your spending to find that $400.”


Be risk tolerant

Because this couple is late to saving for retirement, their planner believes they need to take on more investment risk than a typical investor in their 50s. He recommended a portfolio that holds 80% in stocks and 20% in bonds.

He says they can accomplish that allocation in one step by setting up traditional IRAs in a broadly diversified low-cost fund like Vanguard LifeStrategy Growth Fund, which is a fund of index funds. They should also take a fairly aggressive position in their 401ks, Owens says.

The reward for all this discipline: Owens calculates that when Bill and Linda are 67 years old they will have more than $280,000 in retirement funds.

Now that they have a plan, Linda feels “relieved” and Bill says he feels “scared” — especially about putting his money into a stock-heavy portfolio.

“It’s hard for me, letting go of control, allowing my money to go in different directions,” Bill says. “I’m comfortable in my old ways. But my comfort is uncomfortable, so now I have to change.”

To make your savings work a little harder, look online

Financial planner Jayson Owens says that if your savings are sitting in a brick-and-mortar bank, you are missing out. He recommends that investors store at least some of their savings in online banks, many of which pay around 2% in interest — but still offer no fees, low minimum balances and FDIC safety.


According to a recent Bankrate survey only about 14 percent of Americans are taking advantage of high-interest savings. The most common reason people gave is that they are comfortable with their current bank and want to have access to a local branch.

“Basically, all brick and mortar savings rates are abysmal,” Owens says, a stat confirmed by the largest banks like Wells Fargo, which offer as little as 0.01% on standard savings accounts. Owens points out that rates at online accounts are falling since the Fed recently lowered interest rates. “But they are still twenty times brick-and-mortar bank rates,” he says.

It’s possible to earn a bit more with some CDs but Owens doesn’t think it makes sense to tie money up right now, especially for an emergency fund which by definition should be liquid.

Accounts that Owens says consistently have the highest savings rates are CIT Bank Savings Builder, CapitalOne 360 Performance Savings, Barclay’s Online Savings and Ally Bank Online Savings.