Even people in their 60's can make financial changes to combat housing insecurity

Can a Couple in their 60’s Make Changes to Overcome Housing Insecurity, Or is it Too Late?

Can older adults improve their financial situation and overcome housing insecurity? Or does there come a time when it’s just too late?

Meet Nancy. At age 68, she and her husband, Steve, 66, have one big financial concern: where will they live in eight years, and how will they afford it?


Housing Insecurity at a Late Age

Nancy and Steve live in Cambridge, Massachusetts, where real estate values – and rents – have flown out of reach for many people. Between 2007 and 2017, home prices in the city-center areas of Boston, Cambridge, and Somerville rose between 60 and 89 percent.  

The average one-bedroom apartment in the city currently rents for $2,744/month, and two-bedrooms go for an average of $3,435.

Cambridge, with its world-class universities and thriving bio-tech industry, tends to hold its value even when the economy takes a dive. During the “Great Recession,” Cambridge property values actually increased. 

So when Nancy and Steve have to move in eight years, they worry that they won’t be able to afford to live in the community they’ve called home for over three decades. 

Can they overcome their housing insecurity?

Cambridge, MA typical street
Typical Neighborhood in Cambridge, MA (Photo by Sandra Sierra on Unsplash)

Why Do They Have to Move in Eight Years?

For many years, Nancy and Steve rented an apartment in a three-family home, where they raised their son and avoided the double-digit rent increases many of their neighbors experienced. Their landlord charged them a below market rate in exchange for the security of having reliable tenants who helped him take care of the property. 

If a pipe broke, for example, Nancy or Steve would call the plumber, pay for the fix, then give the receipt to the landlord for reimbursement. 

This all changed about a year ago when the landlord sold the house to a developer, who gave the tenants notice that they would have to leave within a month. 

Stressed by the need to move out of their beloved home on such short notice, in a community with sky-rocketing rents, Nancy worried about the health consequences the constant, heavy anxiety of their situation could cause – especially since Steve had suffered a heart attack a few years back. 

Effectively homeless, they faced housing insecurity. They couldn’t afford anything in Cambridge and didn’t want to move away. 

Luckily, when the community where Nancy works as a music teacher got wind of her predicament, the parents of one of her students offered their home for free for a couple of months while they traveled out of the country.

This temporary respite proved life-saving. While in their temporary home, a friend offered Nancy and Steve an apartment in her two-family house. She charges them below-market rent, knowing they will garden and otherwise maintain the home.

Only one problem. She plans to sell in eight years.

Stress reduction: breathe

Nancy’s Money History

As a young woman, Nancy devoted herself to a career in music. “I just had faith in the fact that I would do what I loved,” she says.

It worked because she pieced together jobs that provided enough money to live on. 


Besides performing and teaching voice lessons, she waited on tables and then opened a cleaning business, servicing three small start-ups three times a week each, at $25/hour, which seemed like a lot of money at the time.

“I never saved anything, and went without health insurance for a long time. But my independence was worth a lot to me.”

After a serious car accident, Nancy received a settlement of $90,000. She used it pay off her student loans (Steve didn’t have any), take a trip to Europe to visit family, and to pay medical bills, including acupuncture and other alternative healing methods. A lot of it went towards purchasing a health insurance plan.

At age 36, Nancy married Steve, also a musician, who was finishing his master’s degree and painting houses on the side to pay the bills. Once their son came along, Steve reluctantly stopped pursuing music full-time and became a high school math teacher. 

For the first time, they had employer-provided health insurance, and felt secure.

Nancy continued to pursue her independent lifestyle, “making good money” working as a contractor teaching voice classes. She eventually went to work for a music academy that offered free lessons for her son.

Nancy and Steven put their son through private school, with occasional $10,000 gifts from his parents. They also took out a loan to help put him through college.

They never saved enough money for a down payment on a home, so missed out on the run-away appreciation on property values their city has experienced over the last 20 years.

When her father died a few years ago, Nancy received a $50,000 inheritance. She used it to pay down one of the loans she took to cover her son’s education, and she and Steve each bought a $15,000 annuity.


The “Artist-Doesn’t-Think-About-Money” Mindset

As an artist, Nancy always viewed money as a secondary consideration. 

She knew she needed it for the basics – rent, food, clothing – as well as other expenditures important to her as a mother, including private school and college for her son.

She’s also quite entrepreneurial, starting her own cleaning business and music school, and hiring herself out as a private teacher to students of all ages, including one student who continued taking lessons until the age of 100!

Still, Nancy didn’t think much about money over the years. Steve pays the bills and handles their savings and investments. Nancy doesn’t know what all of those investments and savings accounts are, or how much money is in each one.

Like many artists, Nancy feels that a focus on money detracts from her creative pursuits. 


Current Financial Situation

Because Steve handles the finances, Nancy is unclear about exactly what they have.

Here’s what she knows about their assets:

  • Life Insurance: She and Steve each have a whole life policy of $100,000, which she believes would be helpful to the remaining spouse if one of them dies, to pay for funeral expenses and eliminate debt. 
  • Annuity: She has a $15,000 annuity, but is unclear about the details.
  • Emergency Fund: She and Steve have approximately $2,000 in this fund.
  • Savings Account: Nancy puts aside money for taxes and life insurance premiums each month.
  • Social Security: She started taking SS at age 66, and receives approximately $1,300 per month.
  • Private Health Insurance: They have a policy through Steve’s pension, (in addition to Medicare), but Nancy is not sure how long that will last.
  • Pension: Steve took a lower payment from his pension so that if he predeceases Nancy, she will continue to receive money. She’s not sure how much, but thinks she would get about $40,000/year.
  • Investments: They may have some investment accounts that Steve handles, but Nancy doesn’t know what they are or for how much.

Her current debts include:

  • Parent’s Loan for Child’s Education: $12,000 to still pay down on the loan she took to pay for her son’s college education.
  • Credit Card Debt: $15,000, taken to fix their old car and pay for dental work.

In a recent storm, a branch came down and totaled their car. They put $7,000 down on a 2016 Hundai with 26,000 miles on it, and now pay $110/month on the remaining amount of approximately $2,000.

Nancy and Steve both still work – Steve at Whole Foods full time, and Nancy works six days a week, teaching 21 music classes. At age 68, though, she’s starting to feel tired in the afternoons in a way she never did before.


Actions to Improve Financial Situation and Overcome Housing Insecurity

Nancy and Steve may not have home equity or huge savings, but they are not in desperate financial shape, and there are steps they can take to better their situation.

They’re both still working and bringing in income, and Steve gets a pension from his years as a teacher – more than enough to live nicely on in retirement, if the $40,000/year Nancy thinks they get is correct (as long as they don’t have to pay astronomical rent). They also have a few investments.

What can they do to feel secure that in eight years they’ll be able to afford a place to live?

1. First, Nancy really must get a handle on their family finances. 

The artist-as-allergic-to-money mindset may be ingrained in our culture, but it harms rather than helps the artist. 

We often think, “Either I’m an artist or I’m good with money – but I can’t be both. Paying attention to money detracts from my creative life.”

That’s a false and unhelpful mindset. Nancy can be both, and to feel secure financially, she must, even in her late 60’s.

Maybe especially in her late 60’s. 


Artist vs. Money mindset doesn't work

What happens if Steve passes away? She will be left not only with grief, but with the pain of having to learn about every account, to hunt down every password, to search out the paperwork and learn about each investment.

Never mind having to face housing insecurity alone.

So much better to get a handle on their financial life now! She should sit down with Steve, thank him for taking care of the finances all these years, and let him know that, at a minimum, she needs a list of every account and investment, the password for each, and how much is in each one.


2. Consider Starting a Side Hustle that is Less Physically Demanding Than Teaching Music

Nancy travels to various places to teach classes, and it’s more of a physical pursuit than one might think. Using the voice is a whole-body experience.

As she gets older, she will still want to bring in some income, but perhaps she can do this in a way that demands less of her physically. 

Seeing Nancy’s home and garden, I could tell right away that she has a great eye for design. Maybe she could consult with people wanting to design a garden, or help people decorate on a budget. 


Gardening skills can lead to lucrative side hustle
Photo by Matt Montgomery on Unsplash

Ideas for profitable side hustles abound; she would just have to put in some time and effort starting one up. With a history of entrepreneurship, this shouldn’t be too hard!

3. Focus on Decreasing Expenses and Paying off Debt

Nancy and Steve should pay down the $15,000 in credit card debt as soon as possible. Any extra money should go toward getting rid of the high-interest burden of that debt. 

Perhaps they could even sell the new-ish Hyundai they just bought and buy an older, higher mileage car for cash, perhaps for not more than $5,000. A Honda Civic that’s 10 years old and has over 100,000 miles on it, if well maintained, should last for many more years.

They should also look at other ways to save money, and put all of the savings towards debt reduction. This might include getting rid of some subscriptions, buying only used clothes for a year or two, and/or only cooking at home instead of occasionally buying out.


4. Investing for the Future – Even in Their Late 60’s!

Nancy and Steve have eight years before they have to move. It’s not enough time to make millions through investing, but they can still improve their circumstances, at least a little.

First, they should look at every investment and ask themselves how much they’re paying in fees. Even 1% can take out a big chunk of future earnings. Yes, the impact of high fees increases the longer you have to invest, but even with an eight year timeline, they make a difference.

Then they should consider moving some of their investments to low-cost target funds, which will protect their assets given their relatively short timeline and provide a balanced asset allocation.

Once they set up a target fund, they should set up autopay to invest even a small amount every month.

With Steve’s pension, and assuming they’ve paid down debt and they’re still healthy enough to work, they may not need to touch these investments in eight years. They may have a longer timeline after all.

5. Consider Geo-Arbitrage

Nancy and Steve love their community and don’t want to leave it. They enjoy the vibrancy of the city, with its many arts offerings, and they don’t want to leave their friends.

Still, they might want to start looking at lower-cost areas of the country – or indeed, the world – where they combat housing insecurity by living on way less than it costs to rent a home in Cambridge, Massachusetts.

They could even look at communities in Massachusetts, but outside of the Boston area. That way they would still be close to friends and family, but would pay less for rent.

Nancy is unsure of the annual amount of Steve’s pension. If it actually is $40,000/year, that’s more than enough to live nicely on in retirement – if they’re not paying thousands and thousands in rent each month.

If paying market rents in eight years in the Boston area just isn’t feasible, a money-saving move may be their only option.

Moving to lower cost of living area can help older people combat housing insecurity


6. Apply for Housing Subsidies

Once Nancy has a clear understanding of their income and assets, she and Steve should look into community-based housing subsidies.

Many cities, including Cambridge, address housing insecurity by offering low-rent housing to qualifying residents. Cambridge has a program subsidizing a portion of rents for people with low, moderate, and middle incomes.  

If they qualify for one of those programs, Nancy and Steve should apply right away, as applicants likely remain on waiting lists for years.

Applying immediately makes sense, also, because who knows if their current landlord will actually provide them a below-market rental rate for eight years? If unforeseen circumstances arise, she may sell before then.


What This Doesn’t Consider

The big “what if” we’re not taking into consideration is health.

If Nancy or Steve need either nursing home or in-home care, without substantial savings or long-term care insurance, they will need to deplete all their assets and then depend on Medicare. 

Not a great option, but the reality of later-in-life health care for many Americans.

So for now, they’re focusing on eating right, exercising, and reducing stress, and are hoping for the best.


What Else Would You Advise Nancy and Steve to Do?

So do you think it’s too late for these older adults to improve their financial situation and overcome housing insecurity? What else would you do if you were in Nancy and Steve’s shoes?

Let me know in the comments.

PS: This was an uncomfortable conversation for Nancy to have, and I want to thank her for her willingness to move through that discomfort and share her financial concerns with me.

I’ve changed Nancy and Steve’s names, and some identifying details, to protect their privacy.


5 thoughts on “Can a Couple in their 60’s Make Changes to Overcome Housing Insecurity, Or is it Too Late?”

  1. For sure more awareness and more planning ahead.
    Consider asking son to help pay for the loans used for his college education.
    Using LastPass or another password manager will help if one of the couple is not able to manage accounts. It will basically provide a list of all accounts as well, if used consistently.
    Look into inexpensive funeral and burial options ahead of time. I have learned so much watching YouTube channel “Ask a Mortician”. I cringe when I see people asking for money to help pay for a funeral and burial that they cannot afford.

  2. Thanks, Karen! I agree – Nancy was brave to share her story. “Geo-Arbitrage” is a term the FI community uses to mean moving to lower cost areas in order to reach/maintain financial independence. It might mean moving to another country – a lot of people retire to places with federally-funded health care and low housing/living costs. Others move to states with no income tax and where they can find housing for MUCH less than in places like Cambridge.

  3. Wow. This is brave to face, and super brave to talk about. I appreciate Nancy sharing her experiences so honestly. It’s hard to think about big picture when you’re trying to make ends meet (and having trees falling on your car!), but so important. Again, this post offers such simple advice that I, for one, need to follow. (I’d never heard the term “Geo-Arbitage” before. Does that just mean living close to, but not in, the expensive city?) It’s hard living in an expensive city that you love! (Cambridge, I just can’t quit you!)

  4. I love this new series! Big thanks to Nancy for sharing their story. They have many positive things in place already. I agree that one of the most important first steps is for Nancy to learn about their finances, accounts, passwords etc. Until this year I too was not fully involved or aware of the ins and outs of our financial situation. But this year after learning about Financial Independence I started tracking our expenses and now have a complete understanding of everything financially related to our lives and it is a very liberating and empowering feeling. I highly recommend it. From there I agree also that consolidating their investments is an important next move.

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