Can This Single Mom Afford to Retire at 55? Suze Orman Weighs In | How Am I Doing?

Hi Suze, I'm 43 years old, divorced, and have a six year old daughter I work for the Department of Public Safety and will have a mandatory retirement at 55 I'm definitely still going to work However, my goal is to be a good role model for her and hope that I'm saving enough for both of our futures Her college and my retirement Suze, how am I doing? Lori, how are you Lori? i'm doing great Suze I love your show Thank you so much So, Lori, before I go into the numbers and before I even ask you to give yourself a grade Lori, you've come a long way, haven't you? Yes, I have Are you shocked at how well and how you're doing all on your own? Like if you could go back in time to the time that you know, we're no longer with your husband Did you ever think in just a few short years you would be in this position, financially speaking? No, I've just been really determined I mean, I try to really cut a lot of costs I work side jobs, I do massage therapy on the side I sell chocolate covered pretzels I mean, I really try hard to get ahead So this is a perfect, perfect eve before Mother's Day because happy mommy's day to you Because you are a single mother who has so done it on her own I can't even tell you So, Lori let's take a look at your numbers and then I will ask you how you would grade yourself Lori, your take home income is $6,244 per month With everything that you have going on, your expenses are just $3,795 Great, great so far Retirement, you do have $270,000 in retirement plans You have $22,000 in emergency funds You have, in terms of investments, $164,000 Your current home value is 212,000 You have no debt except mortgage debt, and you only owe $83,000 on this home So total assets are approximately $668,000 Total debt is about $82,000 Lori what grade would you give yourself? Suze I would give myself a B-plus And why is it that you would not give yourself an A? What are you doing as you look at this, that you don't think you're doing well enough? Suze, it's just the way the stock market is right now I just don't feel like I'm getting a return on my investment I try so hard And it's just not there All right, so let me tell you the grade that I would give you I also would give you a B-plus, but not because of what the stock market is doing But I'll tell you about that in a second Let me tell you what you are doing Absolutely great what you're doing in terms of saving money for your future, continuing to put money into your pension plans, continuing to save in investments is so wonderful, because why by the time You are 55 years of age where mandatory retirement is going to be forced upon you, you're going to have about $1 million in those accounts At the same time, you are paying your house down so that in nine years from now, that house payment will be paid off so that house payment counts for a big chunk of your expenses Once the house payment is gone, your expenses, if you just stay like you are right now, will be about $2,000 a month So you have all this money that you can save and that you can do all these things to make sure that you retire, especially since you're going to be working according to what you said after the age of 55 Now, here is your way to an A you currently have a will, but you do not have a living revocable trust You need have a six year old daughter Next, you currently have about $25,000 in a 529 plan, and you are putting $300 a month towards that A little shy, because I think you're probably counting on higher returns in the market than you should be I would increase that $300 to 400 - $450 per month to guarantee that she'll have about $110,000 later on in life when she does go to college Just those few things Also, remember this if you're going to need to live off the money that happens to be in your retirement account at work, there is a law that says once you are 55 years of age or older, and then you leave service where you're working, you can access any of the money in your employer's retirement plan without any penalty whatsoever Be careful, because if you take that money and do an IRA rollover with it, you cannot access it any way you want until you are 59. 5 years of age

But overall speaking, are you kidding me? You are doing great, but now you know your way to an A