Another one of those articles

[Helen]

About people who had high incomes but didn't save a cent, then hit a rough patch.

For formerly wealthy, poverty comes as a shock | cleveland.com

One guy lost his job at age 56 and was hitting the food pantry within two months. Another was 63 and had been laid off for two years and was broke. Both had been high income earners.

The article doesn't mention any credit card debt. I'll bet Mr. Baschoff had a lot of it.

 

[TromboneAl]

Some of those people are now on wall street (occupying it).

 

[TromboneAl]

Interestingly, the article doesn't mention explicitly that if they hadn't spent every thing they made, they wouldn't have fallen so hard. Also they still live in an expensive area and all the kids have cell phones.

 

[donheff]

I don't know, the banker doesn't sound like a jerk. He hasn't been able to get a well paying job in his field but he takes work where he can get it, including $11/hr jobs. The kids have cell phones because the in-laws pay for them. I would pop for that if I had teen age grand-kids and my son had been laid off and working low wage jobs for three years. I would probably even pop for the rent assistance the in-laws are providing. I certainly don't begrudge the guy trying to keep the kids in the top notch schools they are lucky enough to be able to stay in (with tuition waivers).

So what do we LBYMers feel? If this guy put loads of dough into 401K's like we did (admittedly not addressed in the article), should he be draining them now and paying penalties? Or should he be taking food stamps and whatever hand outs he can get in addition to his subsistence wages and trying to hold on to his retirement accounts? I don't know but thank God I don't have to find out for myself.

 

[Bestwifeever]

I feel sorry for both families. Somehow I would expect a banker to have more money in the bank than a customer support professional. I wonder if the banker even has retirement money--the article doesn't even mention that and usually these articles talk about how the unemployed go through their retirement funds first. I hope so, because he's pretty much retired involuntarily, it sounds like.

 

[haha]

Or should he be taking food stamps and whatever hand outs he can get in addition to his subsistence wages and trying to hold on to his retirement accounts? I don't know but thank God I don't have to find out for myself.

There is no merciful god on this board, only the god of hard and unforgiving justice.

This family has undergone the Mother's cancer and some complications, the father's losing a good job shortly after uprooting the kids and moving west, and also alluded to is marriage stresses. The man has a good tight extended family, something else not very popular around here.

I say they are doing exactly what they should be doing.

Ha

 

[skyvue]

Laying a guy off 8 months after he moved for the job is pretty low.

 

[Amethyst]

We can point to his described lifestyle and say, "He shouldn't have lived so high on the hog - should have lived in a cheaper neighborhood," but even if he did have lots of savings - 3 years with no job can draw those down pretty fast.

I think he should keep the retirement accounts (if he has them) till the very last. Take unemployment insurance, in-law assistance (which he's very lucky to have - Mr. and Mrs. Amethyst's parents are all deceased, and could not have afforded to assist when they were alive) - and go to food pantries and thrift stores. Food stamps (EBS card) are really for folks with no other financial assets, but who am I to judge. As people often say on this board, "There is no such thing as retirement insurance."

Amethyst

I don't know, the banker doesn't sound like a jerk. He hasn't been able to get a well paying job in his field but he takes work where he can get it, including $11/hr jobs. The kids have cell phones because the in-laws pay for them. I would pop for that if I had teen age grand-kids and my son had been laid off and working low wage jobs for three years. I would probably even pop for the rent assistance the in-laws are providing. I certainly don't begrudge the guy trying to keep the kids in the top notch schools they are lucky enough to be able to stay in (with tuition waivers).

So what do we LBYMers feel? If this guy put loads of dough into 401K's like we did (admittedly not addressed in the article), should he be draining them now and paying penalties? Or should he be taking food stamps and whatever hand outs he can get in addition to his subsistence wages and trying to hold on to his retirement accounts? I don't know but thank God I don't have to find out for myself.

 

[Helen]

There is no merciful god on this board, only the god of hard and unforgiving justice.

I think they could have had a much softer landing had they been putting money away instead of living such a high consumer lifestyle. $40k in private schools, expensive vacations, nice cars, nice home, etc., but no savings by age 56. How many more years was he planning on working?

 

[REWahoo]

How many more years was he planning on working?

With four kids still in school, probably a bunch more.

 

[Helen]

With four kids still in school, probably a bunch more.

Especially at $40k per year.

 

[Rustward]

Trying not to be too judgmental, and speaking in strictly financial terms, were they ever really wealthy?

 

[MichaelB]

People are critical of the media for shallowness, yet quick to criticize those portrayed poorly by that same media. That family may have transgressed by living up to their means and not saving enough, but we will not know from this article.

The lack of jobs and the household debt overhang have become critical issues for our country.

 

[W2R]

I cannot understand why any sentient person, in this economy, would not keep at least a couple of years' expenses in the emergency fund. With unemployment compensation and LBYM, this could last 3-4 years.

This is sad, but what's worse is the stupidity IMO.

In October 2008, less than two months after Baschoff lost his job, his wife walked into an Illinois Department of Human Services office to apply for food assistance and Medicaid.

Oh, please.

 

[Texas Proud]

More than likely he got a good severence package, being an SVP...

Also, didn't the bank pay his rent And it says they paid 8 months after he was let go...

All sounds like a person who changed his lifestyle to fit his income.... I know that we have a few where I work today... I am amazed when someone needs an expense reimbursement check 'right away' because they do not have any money saved... and their retirement account is very low. If they were to be let go, they would look exactly like the guy in this article....

 

[Brat]

Almost all in Cleveland metro who want their kids to have a decent education put them in private schools.

 

[MichaelB]

Almost all in Cleveland metro who want their kids to have a decent education put them in private schools.

A middle class family does not need private schools in the US. The working parents may need to commute but there are school systems just about everywhere that are adequate.

 

[HFWR]

Laying a guy off 8 months after he moved for the job is pretty low.

Nothing personal; just business...

 

[youbet]

So what do we LBYMers feel? If this guy put loads of dough into 401K's like we did (admittedly not addressed in the article), should he be draining them now and paying penalties? Or should he be taking food stamps and whatever hand outs he can get in addition to his subsistence wages and trying to hold on to his retirement accounts

This LBYM'er feels he should take every penny of that sweet, sweet gov't money he can get and avoid, as much as possible, depleting his retirement accounts. Unemployment insurance, food stamps, rent subsidies, go for it!

It's a shame this family lost a home to foreclosure. The evil bank should have written off the mortgage as a bad debt and delivered title to the family free and clear. Hopefully the loan was non-recourse and that future federal legislation wipes the forclosure off the family's credit history.

 

[travelover]

I cannot understand why any sentient person, in this economy, would not keep at least a couple of years' expenses in the emergency fund. With unemployment compensation and LBYM, this could last 3-4 years...........

By this definition most Americans, in fact most humans, aren't sentient.

 

[antmary]

I am sorry to hear about these families' misfortunes. I can't imagine the stress involved dealing with:

Mom's breast cancer or any health issues
Low wages
Not being able to find a job

But, most of all, I think it would be hardest to continue living in an arena with an "as if" mentality. It must be very hard on the children. I remember how important looking good was as a teenager. I am sure that their peers know what is happening....

I hope they find traction in their lives, so they can progress onward.

 

[Moemg]

It is easy for most of us to pass judgement on them because we made it to retirement without this happening to us . I give that wife a lot of credit for applying for food stamps and Medicaid . It most have been humbling and continues to be humbling as you get the knowing stares at grocery stores & Doctor's offices .

 

[67walkon]

Circumstances can truly humble any of us at any time. God has a plan for us, but sometimes it isn't exactly what we would choose.

I went to lunch last week with a buddy from college. We're the same age, in the same profession and have probably had similar incomes. He picked me up in a $100,000+ car, but he got it for a discount because it was last year's model. He didn't want to go in my Subaru that I plan on keeping until it hits 200,000 miles. He wondered what I was going to really do in retirement and thought it might be another 7 or 8 years before he could afford to quit working. I'm liking my Subaru even more!

 

[obgyn65]

Thank you Moemg - I could not have said it better.

It is easy for most of us to pass judgement on them because we made it to retirement without this happening to us .

 

[rescueme]

The evil bank should have written off the mortgage as a bad debt and delivered title to the family free and clear.

So you get into financial difficulties (for whatever reason), you get a "free home"?