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Question for the Money Doctors

Question submitted on May 4, 2012.

Question

I am widowed since 2006. I get annuity from my husband''s retirement. I own my little mobile home and auto (paid off).I need to know how much, percentage, I should be saving monthly of approximately $1000 I have left after the bills are paid(lot rent, utilities, food,medical copays, etc) and what type of an account I should put it in. I''m only 51, am disabled but don''t collect disability and I have some medical problems which need surgery. I have excellent health insurance. What would you recommend?
Thank you

Answer

The answer to your question depends on a number of factors.  Does your annuity continue until your death and is it your primary source of income? Do you have an emergency fund established?  If not, you may want to set aside three months of living expenses in a liquid investment such as a savings account at a local credit union.  That fund could help to cover unexpected expenses such as medical bills and vehicle repairs.  After establishing your emergency fund, you could start working on your retirement savings by projecting how much income you will need in retirement and assessing how much income you will have coming in monthly in the form of the annuity, Social Security, etc.  Then you could use an online retirement calculator such as the Retirement Planner tool found at the AICPA's 360 degrees of Financial Literacy website (http://www.360financialliteracy.org/index.php/Topics/Retirement-Planning/Retirement-Planning-Basics/Retirement-Planner) to estimate a monthly savings figure.


For additional information visit http://www.360financialliteracy.org/