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

[ThistleMae]

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.

Great...sounds like u have a couple offers already. Im sure you'll figure it all out. Somehow we always seem to, i mean you dont see yourself being homeless, i know i dont !

 

[ThistleMae]

I wasnt planning on working after 60 but have since taken on teaching an online class. The pay is small but covers my auto insurance yearly. Im holding off on ss and will have to start taking my deferred comp at 70 1/2. I find that having a degree has helped me establish a career with good benefits. I know this isnt the case for everyone. I have spent the last year trying to educate myself regarding ss and deferred tax plans. I find the tax system extremely complicated but i feel more and more confident the more i learn. I think ill be okay.

 

[lifesavacation]

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.

With the trend heading towards cloud based accounting, it would be pretty easy to work from home as a bookkeeper. Become certified in Freshbooks, Xero, Intuit, etc. and then market yourself online. I think it would be fairly easy to get a few clients and work part time. My bookkeeper is on the opposite coast. We use ringcentral, box.com, and other internet apps to communicate. It works really well.

 

[Gumbo4x4]

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.

I bought private insurance for many, many years before ACA and millions of early retirees survived on COBRA. It was an expensive option, but no more so than today's options.

 

[Gumbo4x4]

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.

This came up in EVERY economics class I had in college.

 

[aprilgail]

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.

I know I didn't. The only thing I always remember was my dad telling me to get a job with a pension and preferably a union and stick with it which is what I did. when I retired I also got to keep my medical insurance at no cost to me which was great- it's a VERY good medical plan. I started working there at 20 and put in 30 years and retired.

 

[tvguy]

I know I didn't. The only thing I always remember was my dad telling me to get a job with a pension and preferably a union and stick with it which is what I did. when I retired I also got to keep my medical insurance at no cost to me which was great- it's a VERY good medical plan. I started working there at 20 and put in 30 years and retired.

I keep telling my kids "public sector job". Pension, better benefits, and according to a Pew Study, 26% higher pay the comparable private sector jobs. Both are currently working in the private sector. Kids.

 

[DLgal]

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.

Just remember this post when you hear people saying "military servicemembers don't get paid enough." This is what my husband does. 18 years as an officer. I have never once complained about his salary.

 

[focusondisney]

Just remember this post when you hear people saying "military servicemembers don't get paid enough." This is what my husband does. 18 years as an officer. I have never once complained about his salary.

I am certainly not criticizing him. Just pointing out that most families don't make that kind of money.

 

[ThistleMae]

I am certainly not criticizing him. Just pointing out that most families don't make that kind of money.

I have to agree, this is a very healthy income. I can see why the OP can afford to stay home. Perhaps the other folks the OP mentioned in an earlier post, who can afford to have one parent be at home, also have a spouse who is earning a good income.

 

[Hikergirl]

I have to agree, this is a very healthy income. I can see why the OP can afford to stay home. Perhaps the other folks the OP mentioned in an earlier post, who can afford to have one parent be at home, also have a spouse who is earning a good income.

That is usually how one spouse is able to stay at home. There are areas, like mine where that is common. I won't say it is the norm because I have plenty of friends who are a two income family, but I have plenty of friends where the mom stays home.
When my kids were little I was very much like the OP where me going back to work would not make sense financially. Now that my kids are older and wouldn't need some kind of after school or summer daycare I could go back to work. While I won't make more than minimum wage, and I will be taxed at a higher rate, the money I do make could just go into our retirement fund. I am fortunate that I don't need to work, but as I see it, as long as I'm adding money to our savings, even if its a little bit, there is no disadvantage to doing it.

 

[SouthFayetteFan]

My wife quit working when we had our first child in 2010. At the time my income was $39k (plus my wife worked one day a week to add about $3k), we just couldn't justify my wife working 5 days with 3 days worth of income going to daycare (she has a fairly low paying job). We made ends meet that first year and have had some good fortune since then with some raises for me to give us a little room to breathe. We then had a second child in 2013.

The key for us is just keeping our expenses low. Our average annual expenses over the past 7 years is $47,016. Our highest expense year was $56k and lowest was $41k (and that was last year).

 

[ThistleMae]

That is usually how one spouse is able to stay at home. There are areas, like mine where that is common. I won't say it is the norm because I have plenty of friends who are a two income family, but I have plenty of friends where the mom stays home.
When my kids were little I was very much like the OP where me going back to work would not make sense financially. Now that my kids are older and wouldn't need some kind of after school or summer daycare I could go back to work. While I won't make more than minimum wage, and I will be taxed at a higher rate, the money I do make could just go into our retirement fund. I am fortunate that I don't need to work, but as I see it, as long as I'm adding money to our savings, even if its a little bit, there is no disadvantage to doing it.

You have a very good attitude. If you can put all you make into savings/investing that will help tremendously. I can't say I'm saving any more at this point but my investments, which aren't terribly much, are making a small amount of interest. I'm very conservative because I'd rather know how much I have, rather than gamble with a higher rate with higher risk. Plus, I'm already retired so it isn't usually recommended to go with higher risk accounts. I do understand the rationale of working versus staying at home due to the high cost of child care and whether it's worth it financially or not. I've always felt that if I could stay at home, I definitely would have. I did stay at home with my first child but had to work with 2nd and 3rd. Everyone's circumstance is different but there are more people in this country, who are just getting by. I feel I'm lucky in that I made good choices career wise and don't have to worry about health coverage, because I have good insurance and a decent pension. I did save but not until my kids were out on their own. Not everyone can, and I don't believe it's because we are a nation of people who just spend, spend, spend, although there are those that do. When I think about the people I know and the people I talk to in my community, and I tend to talk about this topic to lots of different folks when I'm out and about, everyone is concerned. I think my community is pretty average. We don't have many high paying jobs in general. We cater mostly to the tourist industry as we live in a beautiful place...NH. I can always remember this one man, who hurt his finger at work, probably broke it. He taped it up to his other fingers. He said, "I don't have insurance, this will have to do" and he laughed about it. This is a reality for some.

 

[ThistleMae]

My wife quit working when we had our first child in 2010. At the time my income was $39k (plus my wife worked one day a week to add about $3k), we just couldn't justify my wife working 5 days with 3 days worth of income going to daycare (she has a fairly low paying job). We made ends meet that first year and have had some good fortune since then with some raises for me to give us a little room to breathe. We then had a second child in 2013.

The key for us is just keeping our expenses low. Our average annual expenses over the past 7 years is $47,016. Our highest expense year was $56k and lowest was $41k (and that was last year).

I agree keeping expenses low is significant. But unforeseen expenses just pop up every now and then, and for many it's the savings that has to get spent to fix something. For others, it's the credit cards.

 

[Kitty 34]

Yes, this is a tough decision. I'm retired, at 60, and am now 63. I'm still active but since retiring have had breast cancer, knee replacement and now struggling with Achilles tendonitis. I'm still vacationing but have had to make modifications, like using an ECV at Disney, which saved my trip for sure. It's an entirely different situation if you start losing mental capacity. I can't say I did much while my kids were growing up, but we did camping and drive-in movies and had fun at home, as much as we could living paycheck to paycheck. Now is the time I can go on vacation, so while I may have some limitations, I'm still enjoying life and was able to put money away once my kids left the nest. Am I worried about medicare costs an coverages and social security, sure....just like everyone on a fixed income does...so I understand how hard it is to decide. We all do the best we can and hopefully have a positive attitude no matter how dire the situation is. After all, it isn't about how much money you have to go on vacation, isn't it about the quality time you spend with family even if it's a simple cook out in the back yard.

My story is rather similar, ThistleMae. I retired at 61 and just after turning 63 this year found out I have a genetic lung disease. I get infusions every Wednesday and will the rest of my life. Luckily DH and I did some major saving and we have a pretty good health insurance but the infusions at $2,000 a pop.....makes you step back a bit and look at your finances.

 

[Colleen27]

I bought private insurance for many, many years before ACA and millions of early retirees survived on COBRA. It was an expensive option, but no more so than today's options.

It was, on average, a lot more expensive than today's options. The ACA capped the age-based premium surcharge as well as the pre-existing condition exclusions/surcharges that impacted a lot of middle age and older people in the individual market, and the subsidies further lowered costs for lower and middle class consumers.

This came up in EVERY economics class I had in college.

And as the example used to teach compound interest in high school math when I was in school.

 

[Gumbo4x4]

It was, on average, a lot more expensive than today's options. The ACA capped the age-based premium surcharge as well as the pre-existing condition exclusions/surcharges that impacted a lot of middle age and older people in the individual market, and the subsidies further lowered costs for lower and middle class consumers.

I don't believe that to be correct of people continuing their employer insurance upon retirement. Nobody I know who did so is paying LESS today.

Now, ENTERING the private market late in age, sure. But, why would you do that unless you'd just neglected to get insurance previously? And I don't know anyone who's middle class that's eleigble for subsidies. Maybe at the very bottom end of MC.

 

[Colleen27]

I don't believe that to be correct of people continuing their employer insurance upon retirement. Nobody I know who did so is paying LESS today.

Now, ENTERING the private market late in age, sure. But, why would you do that unless you'd just neglected to get insurance previously? And I don't know anyone who's middle class that's eleigble for subsidies. Maybe at the very bottom end of MC.

I don't know many people who have had the option of continuing an employer plan into retirement, except in the short-term via COBRA. Most of the early retirees I know were entering the private insurance market for the first time post-retirement.

As far as the rest, I suppose that depends on how you define middle class. I tend to look at the statistical middle, which absolutely qualifies for subsidies (the cutoff for a household of 2 is above the national median income for all households). But I know there are other definitions of middle class that skew a lot higher because they're based on standards of living or purchasing power. I read something recently that defined middle class as a dual-income household with two professional jobs, which would put their "typical middle class household" (with something like 90K in income) in the top 20% of the national income distribution. I fail to see how that is the "middle" of anything.

 

[longboard55]

Not sure about other states, but in California you could continue cobra for three years, the problem being cobra without the employers help is real expensive. After 3 years you had to go to the individual market, but if you were over 50 there was about no chance of being accepted, then you ended up in the state high risk pool that had rates double what ACA rates are.

 

[mnrose]

Not sure about other states, but in California you could continue cobra for three years, the problem being cobra without the employers help is real expensive. After 3 years you had to go to the individual market, but if you were over 50 there was about no chance of being accepted, then you ended up in the state high risk pool that had rates double what ACA rates are.

Just as an example, the COBRA I was quoted 11 years ago was over 1300 for my family of 4. Not cheap in the least. 11 years ago. Well before the ACA supposedly caused all the "problems." And, it had a lifetime cap of $1,000,000 (at that time). We did not take COBRA. Instead, I went with retiree health (considerably less coverage), and DH got a job to cover us too with his benefits.