272. What to Do If You’re 35+ and Feel Financially Behind with Jean Chatzky

What It Covers

Financial journalist Jean Chatzky discusses strategies for women in their forties and fifties who feel financially behind. She shares her experience of starting over at 40 after divorce, job loss, and parent death, covering retirement savings benchmarks, HSA investing strategies, and navigating caregiving responsibilities while protecting retirement goals.

Key Questions Answered

• •Retirement savings hierarchy: Grab employer 401k match first for guaranteed returns, then tackle high-interest debt, max out remaining retirement accounts, utilize HSAs and 529s, and finally invest in discretionary brokerage accounts. This prioritization ensures tax-advantaged growth while eliminating costly debt that undermines wealth building over decades of compound growth.
• •Fidelity retirement benchmarks: Save 15% consistently to reach these targets: one times annual income by age 30, three times by 40, six times by 50, eight times by 60, and ten times by retirement. These benchmarks enable replacing 85% of pre-retirement income for a 30-year retirement, though exceeding 15% savings accelerates progress for late starters.
• •HSA triple tax advantage: Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are untaxed. The strategy involves investing HSA funds while paying current medical expenses from checking, saving all receipts indefinitely to justify future tax-free withdrawals against decades of accumulated medical bills, including Medicare premiums in retirement.
• •Late-start retirement math: Working an additional three to six months at career end equals adding 1% to retirement savings for 30 years, due to higher late-career income. This makes delaying Social Security claiming especially critical for women with longer lifespans, maximizing both personal and survivor benefits rather than claiming early with permanently reduced payments.
• •Caregiving financial boundaries: Adult children caring for aging parents spend an average of $7,000 annually in unreimbursed expenses, equivalent to a full Roth IRA contribution. Prevent this by having advance conversations with parents about their retirement funding, coordinating sibling contributions of time or money, and avoiding the default where caregiving responsibilities and costs fall disproportionately on one child.