Hi Mustachians!
I know you're all super-smart and will help me with my impending dilemma.
I wrote out a whole case-study this morning and it somehow got lost in the ether, so here's the Cliffnotes version:
I'm a 51-year-old mom of a 12-year-old still at home, and three grown kids who have all flown the coop. I've been waitressing my whole life. That was fine and dandy while I was homeschooling and raising my kids, because my husband was the main breadwinner, and my job was just part-time.
Then he died suddenly, four years ago. We had some life insurance, but not enough. I paid off all of our consumer debt and my car loan, but it wasn't enough to pay off my mortgage.
Now, four years later, I still have 12,000 in emergency savings, 7500 in a Roth IRA I opened last year, and his 401K of about 106,000 (still just sitting there because I don't know what to do with it).
My problem is this, in a nutshell: My main source of income is Social Security survivor's benefits, and it's ending soon. In just over three years, when my son turns 16, my half will end, and then 2 years after that, his half will end.
Here are the numbers:
SS: 2880 per month
Waitressing: anywhere between 1000 and 1600.
I have dialed down my expenses a lot (cutting out cable, switching to cheaper car insurance, slashing the food budget, soon switching cell plans to Republic, etc.) and I have finally gotten the outgo lower than the income. Last month I saved $500, this month I'm on track to save even more.
But when that SS ends, I'm screwed. Obviously, I can't live on 1600 a month. I would move, but my house is already tiny (900 sq. ft.) and my monthly mortgage is actually lower than rents in my area. Plus I owe about 10K more than my house is worth. The entire neighborhood has plummeted in value. I refi'd from a 30-year to a 15-year at a lower rate (and didn't take a dime out) but it still won't be paid off before the SS income stops.
People, I'm scared. This keeps me up nights. All I've ever done is waitress. I have no college, although I do have a "health coaching" certificate from an online school that cost me 5 grand. (I know! I've already face-punched myself repeatedly for that one.)
I know it was naive, but I really, really thought I would have a significant other sharing my life and contributing to my household by now. But I'm not even dating anyone, lol. Prince Charming is clearly not coming. I have to save my own ass, and I'm not sure how to do it.
There's also a Catch-22. If I do somehow snag a "real" job doing something vague and officey (medical receptionist maybe?) I will also lose my half of the SS if I make more than 14,000 a year. So it seems like it's better financially if I just keep the status quo going for the next three years, with the SS plus the part-time waitressing. Because that adds up to more per year than I could possibly make doing any other entry-level whatever, without a degree. I mean, my income is currently about 1000 a week, take home. What on earth could I do that could match that??
What do you all think? Am I as trapped as I feel like I am? Is there something I'm missing, or not considering? Is there something I should spend the next three years doing, to prepare for my financial Armegeddon? I can't touch that 401K without huge penalties, right? Besides, that's the beginning of my mustache! I don't want to raid it. I've thought of renting out my spare room for some extra income, but it's the size of a postage stamp and they wouldn't have their own bathroom. Who in their right mind would pay me for that?
Thanks in advance for what I know will be great advice. Oh, and all you young guys with stay-at-home spouses, if you're still working, make sure you have enough life insurance! My husband was only 42 and dropped dead of a heart attack.