Define It, Please

So what does it mean to “secure your retirement?” That means that you are on track for your age to reach certain benchmarks before you are unable or unwilling to continue working for a paycheck.

These benchmarks are reached by careful management of all of the money that flows into your life.

Key Benchmarks

Contingency Fund. No matter your age, you need six times your monthly income set aside in a safe and secure account to be there in case you experience a financial emergency. This is your goal and one you need to be working on each and every payday. Notice that the operative word is “you.” In case YOU experience an emergency—not your adult children, your parents or your disabled brother-in-law. You must be ready to deal with your own financial emergencies.

No unsecured debt. As long as you are carrying any unsecured debt (credit cards, student loans or other loans you can get with your signature alone), you are not in a position to give financial help to others. Getting out of debt is part of getting your own “mask” secure before assisting others.

Retirement accounts. If your employer offers a 401k program, you need to be participating with a deposit into your account each payday. In 2013 you are able to contribute $17,500 ($22,500 if you are 50 or over) each year. If your employer has a matching program, at the very least you need to be contributing enough to get that match. Not doing that is to leave free money on the table.

Personal savings. Beyond your Contingency Fund and retirement accounts you need to be saving regularly from every paycheck. Ideally, you should be saving 10 percent. That money should go first to build your Contingency Fund, then to your unsecured debts. Once debt-free, you do not stop saving. Now you can build your personal savings and personal investments—both of which are necessary to “secure your retirement.”

No mortgage. As you look at your timeline, you must be on a payment schedule to have your mortgage completely paid off before you retire. Only you can decide what the timeline looks like. Unless you are on track with that payoff schedule, your “mask is not securely in place” to allow you to assist others.

Looking back at Joann’s letter and measuring what we know against these benchmarks, it’s clear to see that her mother was not in a secure position to offer financial help to her children, grandchildren and great grandchildren. She did not have her “mask securely in place.” But she attempted to do so anyway and in so doing, she lost her ability to help herself.

Now she needs assistance right along with all those she tried to assist. And it is possible that her attempts have backfired in another way. Those she has attempted to assist have become co-dependent with her. Her attempts may have hindered them from becoming self-sufficient and independent.

My best advice to Joann is to separate her assistance into “financial” and “information.”


Joann and her husband are simply not in a position to offer financial help until they have secured their own futures and retirements. Unless she and her husband are now independently wealthy (meaning that they are on track with the benchmarks listed above and her Social Security check each month can be considered excess funds available to help others), they simply do not have the means to contribute financially to these family members.


Joann indicates that she has already begun researching options for her mother. There is a lot of information out there that she can gather that will be of great help to her mother should she lose the home through foreclosure (likely, given the circumstances Joann describes). What does her state offer in terms of help for low-income seniors?