Surprised and Concerned

[RonBoyd]

... but as of 1/1/18 the company stopped providing retiree life insurance. There goes $22K/year they hadn't planned on spending. (He's 62 and she's 63.)

Why do they need Life Insurance? Is there someone relying on them for support?

 

[Amethyst]

I only know of a couple cases where divorce meant no retirement (regular 60's retirement, versus ER). That was, I gathered, because the divorce settlement gave one spouse half of the other spouse's pension and TSP funds. If it was a remotely equitable settlement, you'd think they'd both be in the same boat vis a vis retirement. Neither would have enough

In talking to colleagues about ER, a common theme among my male peers (engineers, project managers) is that the guys who have been divorced cannot ER because their finances were set back so much. Then there are the guys with multiple divorces who are still working past 65. I'm sure it is a similar story for women.

 

[Meadbh]

Why do they need Life Insurance? Is there someone relying on them for support?

+1

 

[Amethyst]

Now, that is one financial "pressure" that never occurred to us. We can get term life insurance through OPM, but it grows expensive with age and the payout diminishes, so we never bothered. I don't think it's subsidized at all by the government; it's probably a big-group discount.

If they were counting on subsidized retiree health insurance and the company welshed on it, that would definitely be a blow.

My brother retired with a good pension but as of 1/1/18 the company stopped providing retiree life insurance. There goes $22K/year they hadn't planned on spending. (He's 62 and she's 63.) I'm sure health insurance (including the steep deductibles) has thrown many ER plans into turmoil.


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[athena53]

Why do they need Life Insurance? Is there someone relying on them for support?

Oops. I meant health insurance. Fortunately I still had time to edit my post.

If they were counting on subsidized retiree health insurance and the company welshed on it, that would definitely be a blow.

Yes, that's what happened. A previous employer of mine (not the last one from which I retired) at least decided at one point to "freeze" the health insurance benefits at a dollar amount they were paying as of that date so retirees were on the hook for premiums over that amount. My brother's company just walked away completely and stopped paying anything. Nasty but apparently legal.

 

[trirod]

In talking to colleagues about ER, a common theme among my male peers (engineers, project managers) is that the guys who have been divorced cannot ER because their finances were set back so much. Then there are the guys with multiple divorces who are still working past 65. I'm sure it is a similar story for women.

We had a guy in our firm who was nicknamed "Mr. one-eighth". He had been divorced three times and each wife got a half, so he was left with a half of a half of a half - hence Mr. one-eighth. He had no plans to retire, ever.

 

[aaronc879]

I have a co-worker who is 53 and plans to retire at 59. He said he should have over $150,000 and have his house paid off so he'll be good to go. I don't want to sound preachy but I just said "you make around $50K/yr and save 10% which means you spend $45K. If you retire at 59 with $150K(no pension), your money is gone by the time you can start early SS. Early SS for someone who averaged less than $40K/yr will be maybe $15K/yr. How will you live on that?" He said "my house will be paid off so I won't be spending much". This person lives in small town Wisconsin. His house is probably worth under $150K. It won't cut his expenses by that much yet he seems so sure he'll have enough to retire at 59. They all seemed so shocked when I told them I already had over $150K at age 38 and was saving 20% in my 401K with 15% going into the ROTH 401K plus I max out the ROTH IRA as well. I guess they will be shocked when I retire younger than any of them too.

 

[CaliKid]

....

I've read the research and know that the savings rate in the US now hovers around zero but I was shocked that these people who have their lives so together had fallen victim. ...

"Fallen victim?" Maybe we savers are the victims? I am sometimes envious of people that live for the day. I try not to be judgmental because if they do drop dead tomorrow at 55 or 60 or whatever then I would say they did things right and I am the sucka!

 

[97guns]

I have a co-worker who is 53 and plans to retire at 59. He said he should have over $150,000 and have his house paid off so he'll be good to go. I don't want to sound preachy but I just said "you make around $50K/yr and save 10% which means you spend $45K. If you retire at 59 with $150K(no pension), your money is gone by the time you can start early SS. Early SS for someone who averaged less than $40K/yr will be maybe $15K/yr. How will you live on that?" He said "my house will be paid off so I won't be spending much". This person lives in small town Wisconsin. His house is probably worth under $150K. It won't cut his expenses by that much yet he seems so sure he'll have enough to retire at 59.

Another pipe dream

 

[Maenad]

As I age into my sixties and contemplate my increasing limits, I am saddened for those who think they can "work until the end". No you can't. In the above list of acquaintances are a truck driver and an oilfield worker. It's a rare person who can do that into their seventies.

I told my kids about this, and explained: "Whether you, your body, or the economy makes the decision -- you will retire. So prepare for it."

I'm right there with you - ageism is real. People who can work at their careers into their 70s or 80s are lucky, not common. If I wasn't REing, I'd expect to be nudged out the door at 65 at the latest. After your 50s you're considered to be unable to keep up with the latest technological and regulatory changes in my industry. From what I've seen, there's some truth to that.

 

[Danmar]

Another one of these “I can’t believe there are so many financial losers out there” threads. Well if you don’t believe it by now, you never will. Let’s stop being so self congratulatory and smug.

 

[RonBoyd]

Another one of these “I can’t believe there are so many financial losers out there” threads. Well if you don’t believe it by now, you never will. Let’s stop being so self congratulatory and smug.

Where's the fun it that!

 

[Danmar]

Where's the fun it that!

Yes, your right. But it’s getting a little old.

 

[97guns]

Anyone can throw money into. 401k or buy a home and get to retirement but it takes careful planning to make it through retirement. I have a cousin that’s 55 and he has just bought his first house last year, a 30 year loan puts him at 85

But it’s not only in America, it is a worldwide epidemic. Even in my wife’s small village in Thailand people need credit to survive. her sister and brother in law have good jobs but have credit bills and do not save any money, on pay day they’re throwing money around like nothing

 

[4legsgood]

Yes, your right. But it’s getting a little old.

+1, In my anecdotal experience many peeps who whinge about not being able to ever retire are very able to retire but 1) don't want to switch to fixed income lifestyle, 2) like their jobs or their egos are tied to jobs enough to not want to quit, 3) want to retire very wealthy.

 

[W2R]

Another one of these “I can’t believe there are so many financial losers out there” threads. Well if you don’t believe it by now, you never will. Let’s stop being so self congratulatory and smug.

Where's the fun it that!

Yes, your right. But it’s getting a little old.

+1 I completely agree! But there will always be threads like this. For me it's easier to just post a new thread about something that I would rather be discussing, than to get others to stop discussing what they want to discuss.

 

[RonBoyd]

But it’s not only in America, it is a worldwide epidemic. Even in my wife’s small village in Thailand people need credit to survive.

Credit, in and of its self, of course, is not the problem. Not many of us would be able, for instance, to put enough cash together to purchase a (reliable) car or a house outright... well, perhaps with a wise choice of parents that would be possible.

The education system is where the blame lies. Give the number of classes you personal took up through high school that this was spoken of... or, for that matter, at post HS levels.

(Please don't make this a political issue.)

 

[Walt34]

But it’s not only in America, it is a worldwide epidemic. Even in my wife’s small village in Thailand people need credit to survive. her sister and brother in law have good jobs but have credit bills and do not save any money, on pay day they’re throwing money around like nothing

I think it's a characteristic inherent in most people. I began to understand this a little bit after reading books like "Your Money and Your Brain", "Predictably Irrational", and "Thinking, Fast and Slow". People evolved to survive on the plains of Africa, not plan for 30 years of retirement.

So we're living in a culture that didn't exist even 100 years ago, let alone 100,000 years or a million. It shouldn't be surprising that most people's brains are simply not wired to plan ahead. We're wired to figure out where the next meal is coming from and how to avoid being a tiger's next meal.

The 22-year-old who has the foresight to start saving from his/her first job for retirement is truly the evolutionary outlier.

 

[97guns]

Credit, in and of its self, of course, is not the problem. Not many of us would be able, for instance, to put enough cash together to purchase a (reliable) car or a house outright... well, perhaps with a wise choice of parents that would be possible.

The education system is where the blame lies. Give the number of classes you personal took up through high school that this was spoken of... or, for that matter, at post HS levels.

(Please don't make this a political issue.)

(There was political innuendo and certainly no mention until you posted)

 

[UnrealizedPotential]

I think there are many reasons why people can't or don't retire early. I don't think one can point to just one reason and say that's it, that 's the reason why. It could be someone has to pay alimony, others maybe are doing the best they can in life and don't make much and it takes every dollar they earn to survive.

Maybe some people just don't have the mentality to save money. Maybe their make up just isn't wired that way. A part of the reason why people are retiring later or not at all is because pensions are going away or they are much less than they used to be and that hurts, it has to hurt.

Some people just can't make a decision and do not trust anyone else to make it for them, so they may save money or they may not , but it doesn't compound the way it should if it is saved. It's a tough situation, I guess it always has been.

No doubt there exists in society a me now generation. They want everything now, but maybe their paycheck can't support that. Enter the credit card and debt. So it's an issue that has many reasons IMO.

 

[street]

Some very good thoughts on this subject. I do agree that being financially responsible and learn to save if not taught at home most will never learn or see the picture of saving.

I also have seen families with parents that have taught their children the same way some are saves the others send every dime they have.

If taught in school everyone would at least have some education on financing and how to be able to retire if better choices are made through their working years.

 

[Nemo2]

The theme song for far too many people:

 

[braumeister]

I reminded her that the kids can borrow money for education, but she can't borrow money to retire. However, she is bound and determined to fully pay for their college. It is a fundamental expectation for parents in our socioeconomic strata.

That expectation is completely alien to my experience. I honestly can't understand that mindset.

When I was young there was never any question about paying for my college. On a bus driver's salary in NYC we had way too many meals consisting of onion sandwiches to even consider it.

Luckily, I was able to go to a local college because I got a full scholarship and could live at home and commute by subway (two hours each way). But my only other choice would have been to enlist in the military. I had a very good friend who did, and after his Army hitch used the GI Bill to go to college. We have both done just fine in our lives.

 

[akidagain2018]

People want immediate gratification more and more as time passes. Young people nearly insist on living in a space/location/décor that is 'just what they want' and as good or better than mom and dad provided. THIS - is all foreign to my way of thinking. I rent properties, and I always live in less plush quarters than my tenants. I just want functional and a peaceful setting. And people are happy to pay for 'pretty' and 'fancy' apartments. So, on it goes. Many people overspend their entire lives.

 

[aja8888]

But my only other choice would have been to enlist in the military. I had a very good friend who did, and after his Army hitch used the GI Bill to go to college. We have both done just fine in our lives.

That's me but an Air Force hitch. My parents had a hard time supporting themselves. I left home at 17 out of high school. This is America, a good life is there if you want it bad enough.