Help Me Retire: I’m a 57-year-old nurse with no retirement savings and I want to retire within seven years. What can I do?

My expenses are about $3,500 per month, including a $1,600 mortgage payment and $400 car payment. I have $5,000 in credit card debt.

Thanks again for your help

M

See: I’m 52, won’t live past 80 and have $1.6 million. ‘I am tired of both the rat race and workplace politics.’ Should I retire?

Dear M,

You are right — this year alone has shown us how difficult — and essential —- a nurse’s job is. I understand how stressful it must be to work in this field, and on top of that be planning a retirement with little savings.

You are not alone in having nothing saved for retirement. Many Americans are nowhere near prepared for this stage of their lives. The good news for you is that you still have time, a job and the ability to work, and you’re being proactive about it now. So you’re already moving in the right direction!

Now for the not-so-good news. You may have to readjust your expectations, for what retirement looks like, how much you’ll have saved for it and potentially when it starts, financial advisers. This depends on numerous factors, of course, such as if your current living expenses will change, by how much, and if you have any additional resources you can tap. But assuming you want to maintain somewhat of the same lifestyle, and you have no other sources of income in retirement, you will have to shift gears just a bit.

I’m not sure how you arrived at the $400,000 estimation. For simplicity’s sake, say you worked full time for the next seven years and saved exactly half of your gross income ($40,000) — that would be $3,333 a month compounded monthly and you’d need a nearly 10% rate of return, which is much more aggressive than the average. Many advisers try to stay conservative in their estimates — some use a 5-7% rate of return, for example. So assuming you saved that much every month for seven years and earned a 5% rate of return, you’d have somewhere closer to $334,000.

But even this calculation has flaws. You wouldn’t have enough for your current expenses, as $3,500 a month amounts to $42,000 a year and we need to account for taxes. “Saving half of that money she is making and living on $40,000, that is probably not realistic,” said Rodney Loesch, a financial adviser at LifeGoals Strategies Group.

All hope is NOT lost, though. Please remember that. “She’s still young (50s are the new 40s) and can catch up if she’s financially disciplined enough to do so,” said Rose Swanger, principal of Advise Financial.

Before we get into how to build a plan, it’s important to remind yourself often “to be kind to yourself,” said Jude Boudreaux, senior financial planner at The Planning Center. “It’s hard when you are looking for a goal you want to accomplish and feel it will be really difficult to get there,” he said. Becoming too stressed about achieving that goal may take you farther away from it, as you might overspend, for example. Perhaps instead of trying to save half of your salary immediately, create smaller more manageable goals, such as $1,000 a month, he said.

First, advisers said, cut down your monthly expenses as much as you possibly can while being safe about it. For some people, this could be as simple as unsubscribing from various television packages or canceling monthly magazine subscriptions. For others, this might be downsizing a home (easier said than done, especially if you own your home), getting rid of a car payment (again, easier said than done if you need your car) and cutting other big-ticket expenses.

“In her case, her savings need to do a lot of the work that investments would have done for someone younger,” he said. You may be surprised at how much you don’t actually need to spend, and reducing these expenses will help you transition into retirement. This exercise is even useful if you intend to cut down costs when you retire, as you’ll already be familiar with your “new” cost of living.

“The sooner she does it, the better off she will be both monetarily in terms of her portfolio, but also psychologically, after she already made the transition,” said Joshua Mungavin, principal at Evensky & Katz / Foldes Financial Wealth Management.

If you’ve already trimmed your budget, the next step is to look at the length of your remaining working years. I know you said your plan is to work full time for another five years and then part time for two more years, but you may have to work longer to amass a sustainable amount of money in retirement, Loesch said. Again, easier said than done and certainly if a job is taxing like yours, but while you have the ability and agility to work, try to capitalize on that time and strength. Unfortunately, not everyone has the opportunity to do so, due to a disability or a layoff, Mungavin said.

Continuing to work has its benefits, though. For starters, you still get employee benefits this way, such as if your employer offers health insurance and you’re not yet old enough for Medicare coverage (which, as I’m sure you know, can get expensive). You also get to accumulate more money in investment accounts. If your employer offers a retirement plan, and especially if it has a contribution match, take advantage of that for as long as you can.

If you really want or need to get out of your current job though, there are alternatives. You have incredibly useful and necessary skills as a Registered Nurse, and you can use that knowledge and skill set to apply to other jobs, even if it’s part-time or gig work. “I understand nursing is challenging and may not be feasible,” said Marguerita Cheng, chief executive officer of Blue Ocean Global Wealth. “Perhaps turn your hobby into an alternative source of income in retirement.”

If you want to stay in the nursing field, some employment options include administrative work in physician offices, consulting or research roles for medical facilities, patient educators for pharmaceutical companies and even teacher jobs at private or public educational institutions, according to Nightingale College.

Working longer also means your Social Security benefits will continue to grow. The longer you wait to claim Social Security, the more money you will get. Comparatively, if you were to claim before your Full Retirement Age, you’d see a reduction in your benefit. If you are 57 now, your FRA is likely around 67 years old. You can check your FRA as well as your expected benefits at various ages and your employment history on the Social Security Administration’s site.

Speaking of Social Security — think carefully before you decide to claim it, especially if you choose to leave the workforce in your early 60s and intend to have that money offset your savings deficit. And of course, if you can afford to wait. Beneficiaries don’t always realize that when they begin to claim Social Security benefits at 62, which is the earliest a retiree can do so, or anytime before their FRA, they’re going to get a permanent reduction in their benefits. By creating an account with the Social Security Administration, and checking what your estimated benefit will be, you can also get a picture as to how much that money will really help you live comfortably in retirement.

Also, if you planned to take Social Security while working part time, a portion of your benefits will be withheld. In 2020, the base earnings threshold for people who claim Social Security before the year they reach their FRA is $18,240 — for every two dollars you earn above that level, $1 is deducted. You do eventually get that money back in the form of benefit payments after you reach Full Retirement Age, but who wants to willingly go through that stress if they don’t have to? Try to avoid it if you can. Here is more information on that rule.

Also see: I’m 63, a widow and lost my job because of COVID. I don’t have much in savings and feel lost. What can I do?

Here are some other suggestions advisers had:

• Look into the APR on your credit card debt. If it’s high (some could be 20% or more, prioritize paying that down alongside ramping up retirement savings). If it’s much less, such as 3% or 5%, keep tackling the debt repayment but it can be much lower on the priority list, Mungavin said.

• As for the types of investments you use, look toward target-date funds, which allocate a portfolio to an expected retirement date, Cheng said. “I don’t want her to allocate her dollars in an aggressive manner, because that can backfire for someone who is not comfortable investing,” she said.

• If an employer-sponsored retirement account is not available to you, fund an individual retirement account. Here’s more on that.

• Because you own a home, you may also be able to tap into the equity within it one day through a reverse mortgage. This can be a complicated process and it’s important to vet the professional you work with. Here’s more information on that.

• Find a financial planner, who can walk through the specifics of your situation and help you make financial adjustments where needed. You don’t need to work with them regularly — some advisers help clients create a financial plan they can follow on their own. There are also advisers who do pro bono work, meaning they don’t charge and consider the time volunteering, Loesch said. You could reach out to the local chapters of financial planner organizations, such as the Financial Planning Association or NAPFA, to see if that is an option for you. “At this point, to create a workable plan, she really needs a detailed retirement projection (done by a fiduciary professional, not a calculator on the internet) to determine how much she needs to save and how those savings should be invested, in order to set her up for success,” said Gretchen Behnke, founder and financial planner at Pearl Financial Planning.

And meanwhile, just keep putting in the work and try to stay positive.

“By facing her situation and preparing to change her behavior, she has already made an essential first step,” said Carol Fabbri, founder and executive director of Fair Advisors Institute. “So many people are in this situation and prefer to hide their concern instead of facing it.”

Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com