Question: I got a very late start in saving for retirement. I know I should be saving more now, but it's really hard. How do people save enough for retirement while paying mortgages, car loans, tuition and the other costs of daily life?
Answer: By making tough choices. You're right that it can be difficult to save for retirement with so many other claims on your money.
That's why financial planners constantly urge young people to start saving for retirement with their first paychecks. The more money you tuck away while you're young, the more freedom and flexibility you'll have to cut back when you're older.
It's too late for you to do that, of course. But most people can find some way to save more if they really try.
There are a few relatively easy ways to save money, such as eating out less often and trimming grocery bills by paying attention to sales. Consider driving your current car for a few more years, and buying a used car when it's time for a replacement. These moves alone can save you thousands of dollars each year.
Look at your job options, as well. Some companies have better retirement plans than others, and larger companies tend to have traditional pensions--an incredibly valuable benefit that guarantees you a paycheck in retirement. Some of the best pensions are offered by government agencies, including public school systems.
A good 401(k) plan also can speed you to your retirement goal. A good company match--preferably in cash rather than in company stock--would add 50 cents for every dollar you contribute, up to 5% or more of your salary.
If you're really in a bind, you might need to reconsider some of the things you've taken for granted, such as the size of your house or which schools your children attend.
A smaller house not only would lower your mortgage, but also reduce other home-owning costs such as maintenance and repairs. You would have to balance the costs of downsizing--the commissions you would pay to sell your home and buy another, plus moving costs--with the eventual savings to determine whether it makes sense.
Meanwhile, your kids might need to explore less-expensive schools, get a part-time job to help with costs or get student loans. As you've read here over and over: Your kids can get help to pay for college. No one's going to lend you money for your retirement.
Collection Agencies Not Allowed to Harass
Q: My husband lost his job and we're falling behind on our credit card payments. The collection agencies have been relentless, calling us daily. Is there any way to make them stop?
A: Collection agencies are not allowed to harass people in debt. If you notify the agency in writing that you want all communication stopped, the federal Fair Debt Collection Practices Act requires them to abide by your wishes.
That's in theory. In practice, some bill collectors flagrantly ignore the law. If yours continue to pester you, contact the Federal Trade Commission at (877) FTC-HELP.
You're still responsible for paying your debts, even after quelling the collection calls. You might try contacting the credit card companies to see whether they'll consider taking back the accounts from the collectors and working with you on a repayment plan. Or contact a Consumer Credit Counseling Service in your area to see what they suggest.
Also pick up "Money Troubles: Legal Strategies to Cope With Your Debts" (2002, Nolo Press), which could offer some solutions.
Ignoring your money problem won't make it go away, and swift action could save what's left of your credit rating. Chances are these tough financial times won't last, but failing to act could have long-term repercussions on your ability to get credit.
Questions can be sent to Liz Pulliam Weston at moneytalk@la times.com or mailed to her in care of Money Talk, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012. For past Money Talk questions and answers, visit The Times' Web site at www.latimes.com/moneytalk.