Dear Liz: I’m way behind on retirement funds. I did get pension funds from my employer after 25 years of service but used a large portion to pay debt that was crushing me. I’m widowed, age 62 and work full time as a nurse. I rent my place. How do I catch up? I have $200,000 in an IRA.Answer: This answer comes too late for you but may help others who are overwhelmed by debt as they approach their retirement years.People understandably want to pay what they owe, but bankruptcy is sometimes the best of bad options. This is particularly true as you approach the end of your working years and don’t have enough time to replenish your savings. The typical bankruptcy filing can erase debt while protecting the retirement funds you’ll need for the future. Before using your lump sum pension payout to pay debts, you should have discussed your situation with a bankruptcy attorney.At this point, your best options may be to work as long as possible, save as much as you can and figure out a smart Social Security strategy. As a widow, you may qualify for Social Security survivor benefits as well as your own retirement benefit. You can’t receive both simultaneously, but you would be allowed to switch between benefits. For example, you could start survivor benefits and then switch to your own when it maxes out at age 70, if that amount is higher. Typically you would want to wait until at least your full retirement age to start benefits, because otherwise you’ll face the earnings test that reduces your benefits by $1 for every $2 you earn over a certain amount, which in 2024 is $22,320. Paid services such as Maximize My Social Security or Social Security Solutions can help you determine the best approach.The fine print on deducting medical expensesDear Liz: I take $5,000 per month out of my brokerage account (and the $1,400 in taxes when I withdraw the money) for my husband’s Alzheimer care facility where he now lives 24/7. Can I only claim that on my taxes under medical expenses if I itemize my deductions on my taxes? I don’t have any other deductions.Answer: Your husband’s expenses may be enough to justify itemizing even if you don’t have other deductions.The standard deduction for married couples in 2024 is $29,200. To itemize, your deductions would need to be higher than that amount. Furthermore, medical expenses must exceed 7.5% of your adjusted gross income to be deductible, notes Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting.If your husband meets certain criteria, however, the deduction can include the expenses related to meals and lodging at the facility as well as the medical care portion, Luscombe says.A licensed healthcare professional must certify annually that your husband is chronically ill and living in the care facility due to medical necessity, he says. A tax pro or the facility itself can provide further details.More on payable-on-death accountsDear Liz: You recently wrote about payable-on-death accounts. You wrote that one of the disadvantages to these accounts is that an estate’s executor might have to try to get money back from beneficiaries or pay expenses out of their own pocket if there wasn’t enough money left in the estate to pay the bills. I thought your bills would have to be paid before any money was distributed. Is that not the case?Answer: No. Payable-on-death accounts typically go directly to the named beneficiaries. Such accounts avoid probate, the court process that otherwise follows death, so there’s no mechanism to withhold money that might be needed to pay final expenses or other bills.Furthermore, beneficiary designations usually override the terms of a will or living trust. If you were counting on an account to pay final expenses but forgot you named a beneficiary, your executor probably couldn’t access those funds.Payable-on-death accounts might be a solution for people with simple situations and too few resources to justify a living trust. For example, you might use a pay-on-death designation if you’re leaving a bank account to an only child and you trust them to use the money to pay your final bills.Otherwise, you’ll want to discuss your situation with an estate planning attorney and get personalized advice about how best to settle your affairs.Liz Weston, Certified Financial Planner, is a personal finance columnist. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizweston.com.