Serious question: if you didnt save enough or run out of retirement money...

[bigbabyblues]

My bio parents have saved nothing in their entire lives, and I don't know what they will do. It will not be my problem, as they couldn't be bothered to raise me because I had medical issues as an infant (took me to my grandparents and didn't come back to get me, I was much, much better off). Unfortunately, I was kept all to familiar with their habits until my papa died last year. They were on welfare and my father worked under the table for less than minimum wage until I was close to high school. Their benefits were cut and she went to work in fast food for a few years and now works in the kitchen at a medical facility but refused to participate in the 401K there. She was in her late 40s by then, but it would have been better than nothing. He continued working under the table until the old man he worked for died and amazingly (insert eye roll) didn't actually leave everything he had to them, as they thought he would (they were never told this, they just assumed). He finally had to take a "real" job, but at 55-ish at the time with no work experience to note, he is working as a seasonal groundskeeping employee and takes voluntary layoff/unemployment from late fall until spring every year. They have gotten by all this time by misusing credit that they never repaid, using the welfare system and other govenment programs, taking advantage of the payday-loan places, begging and mooching from my parents and their sons (they kept them). I guess it sounds horrible, but I can't and won't feel sorry for them. They have made this mess for themselves by refusing to get off their lazy butts and work like the rest of the world has to do. They were perfectly able to work, but it was easier not to, and he didn't want anyone to tell him what to do. One always has to pay for their choices eventually. I'm sure they will get medicaid and it will pay for their nursing home and care but that will be for my one brother that they haven't screwed over one too many times to deal with.

 

[brooke789]

There was a story on our local news recently where the headline said something along the lines of 'family robbed of life savings'. We'll, my first thought is wow they saved money in cash to get them through retirement which is obviously crazy given the risk and lost interest. After reading the story we find out they're retirement age now and it was 30K. I'm really shocked that anyone thinks 30k is going to get them through retirement. Wow!

 

[loves to dive]

We'll see if my plan was correct, I was just told today that the boss was shutting down the office and I would be going part time from home. I'm pretty sure that isn't going to last more than a year if that long, he is 70 and just ready to retire. I have no debt, have 401K and about a year's worth of savings that would pay things like health insurance, car insurance, cell phone, etc. I knew it was coming but really expected it to not happen until at least the end of the year. He said we would be out of this office for all practical purposes by the end of August. The other tech is going consultant for us so I see him slowly looking for another job. I just turned 60 and was planning on totally retiring when I reach SS age, which for me is 66 1/2. I could probably get a part time or full time job doing something like answering phones but I live in a college town and the pay is really low, my pay here has always been a bit high for the area because I'm a really good bookkeeper. I'm thinking not many people want to hire a bookkeeper at my age. So, we shall see if my plan worked. My honey has his own consulting business and works from home so we might kill each other if I don't get some sort of job at least part time out of the house. I guess I won't be going to WDW twice a year now, oh well.

 

[Pacolovestacos]

There was a story on our local news recently where the headline said something along the lines of 'family robbed of life savings'. We'll, my first thought is wow they saved money in cash to get them through retirement which is obviously crazy given the risk and lost interest. After reading the story we find out they're retirement age now and it was 30K. I'm really shocked that anyone thinks 30k is going to get them through retirement. Wow!

Well the good thing about cash is creditors don't know about it so they can't come after it if you ever have bills that need to be paid.

 

[focusondisney]

Sorry...those were the figures when I was thinking about our finances after DH retires from the military. At that point, we would move from the 15% bracket to the 28% one, and this takes into account state taxes as well (California).

Right now, about 1/3 of our income is tax free military allowances, so we are sort of super tax advantaged by being in a low tax bracket despite a take home pay of well over $100k.

If I make over $10k now, we move from 15 to 25% bracket, which is also a jump of several thousands when you combine federal and state taxes. I would lose almost the entire $10k to taxes.

We file married, jointly, have 2 kids, and take the standard deduction. Pretty straightforward.

Also, you are not super up to speed on how the brackets work. At the 15% bracket, taxes due are $1865 plus 15% of the amount over $18650. At 25%, taxes due jump to $10452.50 plus 25% of the amount over $75900. At 28%, you owe $29752.50 plus 28% of the amount over $153100. Again, these are the married filing jointly figures.

That jump in the base amount due between the 15% and 28% bracket is the killer.

I have worked the numbers. I do our taxes every year. It will not pay for me to you get a job that pays $30k. Especially not now. I have to keep my earnings low enough to stay in the 15% bracket. Once DH retires, we will definitely jump up one bracket, and will have to be very careful not to jump up another due to some part time job I take.

Maybe that's the difference in why your family can afford for you to stay home. Most Americans don't have 1 wage earner taking home "well over 100k." With 1/3rd of that being tax free. And from your previous post, your retirement income will be $8000? Again, not an amount most Americans make, even when working. Lots of families don't make that, even with both parents working.

 

[penn19]

We'll see if my plan was correct, I was just told today that the boss was shutting down the office and I would be going part time from home. I'm pretty sure that isn't going to last more than a year if that long, he is 70 and just ready to retire. I have no debt, have 401K and about a year's worth of savings that would pay things like health insurance, car insurance, cell phone, etc. I knew it was coming but really expected it to not happen until at least the end of the year. He said we would be out of this office for all practical purposes by the end of August. The other tech is going consultant for us so I see him slowly looking for another job. I just turned 60 and was planning on totally retiring when I reach SS age, which for me is 66 1/2. I could probably get a part time or full time job doing something like answering phones but I live in a college town and the pay is really low, my pay here has always been a bit high for the area because I'm a really good bookkeeper. I'm thinking not many people want to hire a bookkeeper at my age. So, we shall see if my plan worked. My honey has his own consulting business and works from home so we might kill each other if I don't get some sort of job at least part time out of the house. I guess I won't be going to WDW twice a year now, oh well.

Don't think that! When my MIL was a little older than you she lost her job and got hired at another. She is in her 70's now and is still working at the same company as a bookkeeper and they treat her wonderful. I don't think she has any plans to retire.

 

[loves to dive]

Don't think that! When my MIL was a little older than you she lost her job and got hired at another. She is in her 70's now and is still working at the same company as a bookkeeper and they treat her wonderful. I don't think she has any plans to retire.

My problem is I really don't want to work full time and I live in a college town, which means you have to compete with college students and professor's wives who will work for peanuts so jobs are few and far between. I used to have a lot of contacts when we were bigger and could have just picked up small businesses who needed someone to do their books for them but after we got smaller those all went away. I'm not too worried about it since I knew there was the possibility of it happening and have been planning for it.

 

[mi*vida*loca]

I'm only 34 but growing up I knew no one who lived in a nursing home or really elderly people that lived alone. Most kids I knew had at least one grandparent in the home with them. It's really frowned upon in my culture to put a relative into a home.

My grandmother has 6 daughters and lives with my mother right now. My grandfather died in 2001 after being disabled due to a stroke for 15 years. He had a great job with a pension and 401K but it was all lost when he had a major stroke so sometimes life doesn't go according to plan. Any of my aunts would take her in at the drop of a hat but my grandmother doesn't want to live with anyone who has small children so right now she's with my mom. She could live on her own but my mom and aunts want her to use her money to travel and live life instead of paying bills since she did so much raising them.

My other grandmother lives alone and my father recently moved back in with her but my uncle wants her to move in with him and she refuses. My grandfather who has enough money saved to live anywhere lives with my aunt. He was in Puerto Rico but when his last sibling passed away my aunt brought him to Arizona with her. He wanted to stay there but putting him in a home was out of the question and she didn't trust him to be by himself.

I'm saving for retirement and plan to have enough to take me through the end of my life but if some crap happens I assume I'll live with one of my kids. Or maybe one day I'll buy a bigger home with one of my kids and be a multigenerational household like was the norm when I was a kid. Who knows what the future holds. My children are used to the multigenerational thing (I actually live around the block from my grandma and my kids are there daily) but who knows how their future partner will feel about it.

ETA: We have discussed living part time in Nicaragua (where my SO was born) and part time in the USA. It is definitely on our list.

 

[NotUrsula]

The thing that bothers me, and I am sure someone will quote me some article on finance, but I see a lot of people taking early SS who can not afford the pay cut they will take. If you have nothing working till 70 will give you a lot bigger check.

All other circumstances being positive, yes, it it advantageous to wait until 70 to collect, but the problem is that circumstances have a way of going south on you sometimes.

One reason is that this assumes that you're going to be able-bodied (and alive!) long enough to collect at 70. Lots of people don't manage that, and if their health is really declining, getting out of the workplace earlier may be the only viable option.

Also, women often do it because their spouses have always made much more than they do (especially in cases where the husband is older by some years.) In those cases, taking SS early lets you double-dip while your spouse is still alive, then switch over to the other option after a spouse dies.

 

[runwad]

We'll see if my plan was correct, I was just told today that the boss was shutting down the office and I would be going part time from home. I'm pretty sure that isn't going to last more than a year if that long, he is 70 and just ready to retire. I have no debt, have 401K and about a year's worth of savings that would pay things like health insurance, car insurance, cell phone, etc. I knew it was coming but really expected it to not happen until at least the end of the year. He said we would be out of this office for all practical purposes by the end of August. The other tech is going consultant for us so I see him slowly looking for another job. I just turned 60 and was planning on totally retiring when I reach SS age, which for me is 66 1/2. I could probably get a part time or full time job doing something like answering phones but I live in a college town and the pay is really low, my pay here has always been a bit high for the area because I'm a really good bookkeeper. I'm thinking not many people want to hire a bookkeeper at my age. So, we shall see if my plan worked. My honey has his own consulting business and works from home so we might kill each other if I don't get some sort of job at least part time out of the house. I guess I won't be going to WDW twice a year now, oh well.

Can you find a part time job, I know they don't pay much, but then supplement your income by taking withdraws from your 401k and try to go as long as you can without claiming SS? Of course the no healthcare thing is probably the bigger elephant in the room :-(.

I'm worried about my DH. Rumor is in 2 years they will be offering a buy out at his place, he will only be 56, and although his pension will be fine, we won't have family medical coverage, he will only have it for himself. I only work part time and have for the last 17 years, I really don't want to go full time at this point in my life, ugh. I told him he can go be a bus driver for the schools if he has to take a retirement, ha!

 

[loves to dive]

Can you find a part time job, I know they don't pay much, but then supplement your income by taking withdraws from your 401k and try to go as long as you can without claiming SS? Of course the no healthcare thing is probably the bigger elephant in the room :-(.

I'm worried about my DH. Rumor is in 2 years they will be offering a buy out at his place, he will only be 56, and although his pension will be fine, we won't have family medical coverage, he will only have it for himself. I only work part time and have for the last 17 years, I really don't want to go full time at this point in my life, ugh. I told him he can go be a bus driver for the schools if he has to take a retirement, ha!

I suspected this was coming for a couple of years so I'm semi prepared. I can draw enough from my 401K to live on until I'm ss age and still have enough left over to supplement ss but I was hoping to not touch my 401K until later. I talked it over with my honey tonight and I think I've decided to tell my boss how much I need to be guaranteed per month in order to cover health insurance and the other small bills I have and if he's not willing to cover that, I'll tell him bye and get a part time job. I know I can get one to cover my health insurance but I've been pretty spoiled. I've worked for this company for 28 years and had a good bit of freedom to take time off whenever I wanted. I had already planned on going 3/4 time starting next year and had already discussed that with the boss. I'm pretty sure even the part time working from home thing with him wouldn't last longer than a year at the most, he is 70 and just ready to stop working. I could actually not work at all but I've been independent my entire life and don't like the idea of having to rely on honey to completely support me.

 

[ThistleMae]

My bio parents have saved nothing in their entire lives, and I don't know what they will do. It will not be my problem, as they couldn't be bothered to raise me because I had medical issues as an infant (took me to my grandparents and didn't come back to get me, I was much, much better off). Unfortunately, I was kept all to familiar with their habits until my papa died last year. They were on welfare and my father worked under the table for less than minimum wage until I was close to high school. Their benefits were cut and she went to work in fast food for a few years and now works in the kitchen at a medical facility but refused to participate in the 401K there. She was in her late 40s by then, but it would have been better than nothing. He continued working under the table until the old man he worked for died and amazingly (insert eye roll) didn't actually leave everything he had to them, as they thought he would (they were never told this, they just assumed). He finally had to take a "real" job, but at 55-ish at the time with no work experience to note, he is working as a seasonal groundskeeping employee and takes voluntary layoff/unemployment from late fall until spring every year. They have gotten by all this time by misusing credit that they never repaid, using the welfare system and other govenment programs, taking advantage of the payday-loan places, begging and mooching from my parents and their sons (they kept them). I guess it sounds horrible, but I can't and won't feel sorry for them. They have made this mess for themselves by refusing to get off their lazy butts and work like the rest of the world has to do. They were perfectly able to work, but it was easier not to, and he didn't want anyone to tell him what to do. One always has to pay for their choices eventually. I'm sure they will get medicaid and it will pay for their nursing home and care but that will be for my one brother that they haven't screwed over one too many times to deal with.

This is not as uncommon as some people may think but having retired from a career working in child protection shows me a side of people others can only imagine. Sometimes the very poor are much less concerned about what will happen, and they always seem to manage to find ways to manipulate the system. So glad you found a way to break out of that system!

 

[ThistleMae]

We'll see if my plan was correct, I was just told today that the boss was shutting down the office and I would be going part time from home. I'm pretty sure that isn't going to last more than a year if that long, he is 70 and just ready to retire. I have no debt, have 401K and about a year's worth of savings that would pay things like health insurance, car insurance, cell phone, etc. I knew it was coming but really expected it to not happen until at least the end of the year. He said we would be out of this office for all practical purposes by the end of August. The other tech is going consultant for us so I see him slowly looking for another job. I just turned 60 and was planning on totally retiring when I reach SS age, which for me is 66 1/2. I could probably get a part time or full time job doing something like answering phones but I live in a college town and the pay is really low, my pay here has always been a bit high for the area because I'm a really good bookkeeper. I'm thinking not many people want to hire a bookkeeper at my age. So, we shall see if my plan worked. My honey has his own consulting business and works from home so we might kill each other if I don't get some sort of job at least part time out of the house. I guess I won't be going to WDW twice a year now, oh well.

I've seen many couples/families lose their jobs and have to job hunt in later years. I hope you can find something relatively lucrative so you can go to Disney twice a year. What's interesting is that my income was cut in half at retirement but I still manage to vacation. The key for me was making sure I had no debt upon retirement. House paid, no credit card bills...took care of all the repairs while working, new roof, new appliance, new furniture, new car. Things are tight but truly getting rid of all the debt is what makes living on half my income doable.

 

[ThistleMae]

Maybe that's the difference in why your family can afford for you to stay home. Most Americans don't have 1 wage earner taking home "well over 100k." With 1/3rd of that being tax free. And from your previous post, your retirement income will be $8000? Again, not an amount most Americans make, even when working. Lots of families don't make that, even with both parents working.

Exactly this...thank you!

 

[ThistleMae]

Can you find a part time job, I know they don't pay much, but then supplement your income by taking withdraws from your 401k and try to go as long as you can without claiming SS? Of course the no healthcare thing is probably the bigger elephant in the room :-(.

I'm worried about my DH. Rumor is in 2 years they will be offering a buy out at his place, he will only be 56, and although his pension will be fine, we won't have family medical coverage, he will only have it for himself. I only work part time and have for the last 17 years, I really don't want to go full time at this point in my life, ugh. I told him he can go be a bus driver for the schools if he has to take a retirement, ha!

Yes, deferring taking SS can be really helpful if you have enough to live on until then. Lots of folks I retired with began taking SS at 62, but are now having second thoughts, and feel maybe they should have waited. There is a sweet spot as to when to begin to draw. Waiting until 70 increases what you collect substantially but takes almost ten years to recoup what you didn't get. Taking it at full retirement age has a much shorter "break even" period and for me is worth the wait. But health insurance is a huge problem, if you aren't covered and can't afford to buy a policy.

 

[loves to dive]

I've seen many couples/families lose their jobs and have to job hunt in later years. I hope you can find something relatively lucrative so you can go to Disney twice a year. What's interesting is that my income was cut in half at retirement but I still manage to vacation. The key for me was making sure I had no debt upon retirement. House paid, no credit card bills...took care of all the repairs while working, new roof, new appliance, new furniture, new car. Things are tight but truly getting rid of all the debt is what makes living on half my income doable.

My income will most likely be 1/4 of what it was, basically I'm hoping I can squeeze out enough hours to pay health insurance. My health insurance has been partially covered by the company and is a group plan. Individual plans are expensive as heck and I can't do without it as there are certain drugs I have to take. I am debt free so there is that. My honey has an accounting firm as a client and he was doing support for them this morning and asked if she knew someone who needed a part time bookkeeper. She told him as a matter of fact she had a couple of clients who did and she herself needed someone so I'm going to call her on Friday. I still haven't firmed up with my boss exactly how it's going to go down here since the employee that quit had just told him on Friday and he's sort of an ostrich in the sand sort of person. I don't mind doing a couple of companies books from home, the only downfall with that is I'll be an independent contractor, which means nothing going into SS and my predictions relied on my continuing to make what I make now. Even adjusting that, I'll still make plenty to live on and have a little to play with but that's 6 years down the road. It's a little funny since I had planned on cutting back my hours to 3/4 time beginning next year and switching from salary to hourly and figured I would be able to at least have another year before something happened in the company. I had just sold my parents house I was paying the mortgage on at a much lower price than it was worth but it was enough to allow me to pay off my debt and put some in savings so I guess things could be worse.

 

[longboard55]

Firsrt off you still pay SS if you are an indpendent, they call it self employment tax. I keep reading the mention of health care. At least now you can get insurance. I have been self employed for 30 years. The one thing people always say is I would love to try it but I do not want to lose insurance. I hate to get political but before ACA if you retired early you were out of luck. No one would insure you. Its a real big deal when planning retirement before 65 or going solo

Back to the subject, if you have a skill like book keeping, go make up a bunch of fliers and go door to door, I think you would be surprised in the positive results. You do not get benefits but you make a lot more hourly as an independent. As a sole proprietor I hate employees, I would much rather hire independents

If you have no skills, look at house sitting or dog sitting.

 

[Grumpy's Gal]

I don't EVER remember covering " saving for retirement" in any high school class Or any college class.

did any of you?

I know it sounds so simple: spend less than you make! But even if you do that, you might only have 1-2% to put away and that's not enough.

 

[mnrose]

I don't EVER remember covering " saving for retirement" in any high school class Or any college class.

did any of you?

I know it sounds so simple: spend less than you make! But even if you do that, you might only have 1-2% to put away and that's not enough.

Nope. I don't remember ever having a class. OTOH, my parent's ethic of planning and preparing for every eventuality, caused me to start saving the minute I got my first "real" job (out of law school). I started by contributing 6% to a retirement plan, which was taken out before I ever saw my paycheck so I never "missed it." With each raise I got, I contributed at least a portion of that to additional retirement savings (so for example, if I got a 3% raise, I put another 1% into retirement....some of it after tax, obviously as there was a limit on how much you could contribute before tax). And, any bonus check went at least 50% to retirement savings. Over the years, it really added up, and I never noticed it being "gone" if that makes sense. I treated it as money I never had. Pay yourself FIRST, and everything else after.

I've passed the same advice onto both my children. They know their parents are financially "comfortable" and we've lectured them incessantly on how that happened. It wasn't by mistake or an accident. Start saving with your first real job. With every paycheck.

 

[tvguy]

I don't EVER remember covering " saving for retirement" in any high school class Or any college class.

did any of you?

I know it sounds so simple: spend less than you make! But even if you do that, you might only have 1-2% to put away and that's not enough.

College, yes. But I took Accounting classes, and I was in College 1975 to 1979, IRAs came into existence so that was a new deduction we learned about in the basic Income Tax Accounting section of the class.
But being aware of the need for retirement savings was part of the conversation my parents had with me growing up. Schools aren't the only place children learn.
It does sound simple, and for me it was simple once 401k's came around. i had a percentage taken out, usually 15%, and my company matched 3%. Since I never saw the money, I never missing the money. My budget has always been my net paycheck, not my gross paycheck.