Baby boomers on the road to retirement are finding that even a carefully planned route can be filled with anxiety.
Susan Ramsey, 68, and Linda Garcia, 65, have savings, rental properties and skills they could use for part-time income, if necessary, during retirement. Despite the positive news, they've been confused and worried about whether they've handled their finances well.
"We keep asking everyone we know, and everyone has a different opinion," Ramsey said.
Surveys suggest Ramsey and Garcia have company when it comes to retirement uncertainty.
Franklin Templeton Investments found that 76% of people surveyed who were within 15 years of retirement were worried about the future, particularly being financially prepared for late-life health issues, according to a poll of 2,002 U.S. adults released in March.
A separate survey of 2,000 participants on retirement readiness by Voya Financial Inc. showed that only 17% of those still working and 26% of those already retired had a financial plan to follow. Voya said 63% of the workers surveyed had never tried to calculate what their savings would be worth in retirement if converted into future monthly income.
Ramsey and Garcia — they met 15 years ago when Ramsey auditioned for a "Les Miserables" spoof that Garcia wrote — have been doing plenty of calculating. But their holdings are complicated, so they're not sure they've done it correctly.
Fee-only financial planner Carol Somoano said the feeling is widespread among those approaching retirement.
"They really have done a great job," Somoano said. "It's not always easy to see that when you are hearing a lot of advice from family and friends."
Garcia was an administrator at NBCUniversal, most recently as an employee transportation coordinator. That temporary job, which paid $3,100 a month, ended in June, reducing her income to $1,700 a month from her NBC pension. She's wondering when to apply for Social Security benefits.
Garcia also is a certified hypnotherapist, helping people with issues such as fear of flying and habit control, although she currently doesn't practice.
Ramsey is a massage therapist who works at a chiropractor's office and takes private clients. For extra cash, she sews elaborate quilts that have sold for more than $3,000.
Ramsey has been bringing in about $1,700 a month through a combination of Social Security, her former husband's pension and the massage sessions.
Ramsey and Garcia also control four rental properties — one in Southern California and three in Oregon — giving them some flexibility in retirement through the ability to raise rents.
Their property income ranges from $18,000 to $20,000. The pair aren't sure they're getting the most from the properties, with Garcia describing them as "kind of a soft touch" on rent.
The couple had planned to relocate to Garcia's hometown of Portland as early as this year, where they expect the cost of living to be substantially lower than in Southern California. They would sell the three-bedroom Burbank home that Garcia has owned for 20 years and buy a new house.
The two have almost $412,000 in savings and investments, including a traditional IRA, a Roth IRA and an annuity (in which an investor pays an insurer in exchange for guaranteed future income).
Garcia hopes "when we don't have a giant mortgage" of $1,500 a month on their Burbank home "there will be money freed up for us to travel and, during the summer, have grandchildren come up to visit."
The latter isn't a small matter; between them, Ramsey and Garcia have 10 grandchildren, ages 1 to 20.
Another concern is about $12,000 in credit card debt, mostly from work on their properties. Interest rates range from 11.99% to 25.24%.
They suspect they may be running a deficit of as much as $2,500 a month when all the bills are subtracted from their income.
"We do keep adjusting to reduced income, but we don't know how far down to go," Ramsey said.
With the right amount of care, everything the couple want is in reach, Somoano said, "including setting aside money so that family members and grandchildren can visit."
Somoano said that the couple's next few months will be crucial as they adjust to lower monthly earnings because of Garcia's lost NBC income.
Ramsey and Garcia "have to carefully monitor their spending to make sure they are living within their means," Somoano said — a tricky task given that both women grimace at the mention of a budget.
"They can raise rents if they need to," Somoano said, adding that the quilting, hypnotherapy and massage skills could bring in money, if needed.
The lost NBC paycheck is one reason Somoano wants Garcia to start receiving Social Security money, even though waiting would increase the size of her monthly payout. "She should sign up immediately," Somoano said.
Together, Ramsey and Garcia will be bringing in $36,000 in annual Social Security benefits on top of $28,000 in pension money.
Another crucial step, Somoano said, is eliminating that credit card debt.
Next on the list: Slow the Portland move.
"They should take their time and find the right home" costing no more than $300,000, so they will be mortgage-free, Somoano said.
Garcia shouldn't tap her annuity until age 70, Somoano said. That is because of something called a "surrender value period," in which she can take more money out if she waits longer before she makes a withdrawal.
They also can save a bit of money by dropping their life insurance policies.
Ramsey and Garcia have relaxed considerably since their visit with Somoano. They have decided to wait until February to move to Portland, and they won't put the Burbank home up for sale until March.
"This made me feel very secure and free to be excited about the move to Portland," Ramsey said. "And it confirmed for Linda that she had made really sound financial choices."
Money Makeover highlights
Who: Susan Ramsey, 68, and Linda Garcia, 65
2014 income: $36,510
Assets: $2.3 million
Goals: Fully retire this year. Relocate to Portland, Ore., where they hope to buy a home and enjoy a lower cost of living. Sell Burbank home. Live comfortably with enough to travel and help pay for visits by children and grandchildren.
Recommendations: Eliminate credit card debt. Garcia should start taking Social Security this year. Don't rush the Burbank house sale. Ramsey and Garcia should take their time and find a home in Oregon that they can buy outright, keeping the cost at $300,000 or less. Carefully monitor spending. Do not tap annuity until age 70. Stop paying for term life insurance.