At 77 He Prepares Burgers Earning in 1 Week His Former Hourly Wage

[MooreBonds]

The title of this thread refers to a new financial porn story on Yahoo! Finance:

At 77 He Prepares Burgers Earning in Week His Former Hourly Wage - Yahoo Finance

How could you not feel sorry for a 77 year old widower like this:

It seems like another life. At the height of his corporate career, Tom Palome was pulling in a salary in the low six-figures and flying first class on business trips to Europe.
Today, the 77-year-old former vice president of marketing for Oral-B juggles two part-time jobs: one as a $10-an-hour food demonstrator at Sam's Club, the other flipping burgers and serving drinks at a golf club grill for slightly more than minimum wage.
...
For middle class households, with incomes ranging from the mid five to low six figures, it's especially grim. When the 2008 financial crisis hit, what little Palome had saved -- $90,000 -- took a beating and he suddenly found himself in need of cash to maintain his lifestyle. With years if not decades of life ahead of him, Palome took the jobs he could find.
The youthful and perennially optimistic grandfather considers himself lucky. He's blessed with good health, he said. He's able to work, live independently and maintain his dignity, even if he has to mop the floors at the club grill before going home at 8 p.m. and finally getting off his feet.
"That's part of the job," he said. "You have to respect the job you're doing and not be negative -- or don't do it."

Surely another victim of capitalism and greed. How sad that a 77 year old man has to work 2 part-time jobs, standing on his feet for an 8 hour shift at Sam's Club with just 1/2 hour of breaktime! And when he's not doing that, he's standing at a golf club kitchen grill in the Florida heat, while also tending the cash register. The system must be broken!

Oh, what's that? What are the actual historical facts? Why, they have absolutely nothing to do with how he ended up slaving away at 77....

Palome, who said his jobs keep him active and learning new things, could survive without working. He receives $1,200 from Social Security and a $600 a month pension from his last corporate job. Still, his $1,400 in monthly wages allows him to bolster his savings and provides for some extras.
...
The job gave him a high five-figure income and an executive's life at age 39. He flew first class to Cooper offices in the U.S. and in England, Sweden and Germany. He helped win an endorsement for the Oral-B toothbrush from the U.S. Olympic Committee. He had a closet filled with business suits, and on weekends he played golf with other executives.
...
When Cooper relocated from New Jersey to California, Palome didn't want to uproot his family. So in 1980, when he was 44, he started a consulting company, with Cooper as his main client. He also did consulting for Sandoz Pharmaceuticals, Johnson & Johnson and others.
In flush years, Palome had several clients and earned about $120,000. Though he saved for his kids' college and helped his elderly parents, retirement wasn't on his radar.

"I never thought I'd live this long," he said.
...
At 64, when an 800 square foot manufactured home he'd seen in Plant City, a Tampa suburb, became available for $21,500, he purchased it with a credit card to amass frequent flier miles. He then sold his New Jersey home for $180,000, kept what he needed to quickly pay off his credit card debt and divided the rest among his children so they'd have down payments for their own homes. "The house was theirs as much as mine, and that's their inheritance from me," he said.

So this guy had a high 5-figure income in the late 70s/early 80s (even making more later on)....paid for his children's college educations....then gave away his home equity to his children for their own home down payments - and wonders why he can't subsist on his $40,000 401k balance plus Social Security and pension? And we're supposed to feel sorry for his blatant decisions?

He admits that he could exist just on his SS and pension - but he wants to be able to travel and do more things that require spending money. Gee, don't we all?

But this is still all perfect evidence that retirement plans have failed senior citizens!!! The above facts about paying for college educations and giving away his home equity and not wanting to move for a high-paying job have nothing to do with his having to work at age 77 at a hot grill or standing on his feet for 7 1/2 hours.


As far as the original title of the story, the Yahoo! Finance editors need to be a little more on their game:

Palome earns about $80 for his day's work, $7.98 per hour in wages, plus tips. "I earn in a week what I used to earn in an hour," he said, adding that he understands seniors can't easily keep or get jobs that pay middle-income wages.

If he earned as much as $120,000/year at his best year, that works out to about $57/hr. It says he earns $1,400/month now at his part-time jobs- that works out to $350/week.

Unless he had a magic formula for working just 10 hours a week to earn $120,000/year at his peak, the finance editors need to learn some basic math to learn that $57 is nowhere near equal to $350.


In case anyone was wondering - a usual suspect is involved:

How is the average middle-class person going to amass $1,000,000 by the time they're 65, which is what they'll need to get $40,000 a year in income from their retirement savings?" Ghilarducci said.

If someone is in middle class, and married (as many retirees are), as a couple they probably have at least $20,000/year in income from SS. Do they really need $40,000 additional to give them total household income of $60,000+/year? If they are truly average middle-class, did they ever have that high of a level of household disposable income while married?

 

[REWahoo]

Another example of why I gave up reading Yahoo! Finance articles years ago.

 

[JoeWras]

OP already said it, but I'll re-iterate. This guy was making high 5 figures (say 80k to 90k) in the 1970s! GIVE ME A BREAK! He <tinkled> it away.

 

[nash031]

If I was supposed to feel sorry for him, I failed.

What really irked me about that article was this:

The current retirement savings systems isn't working, and that's becoming a crisis as Americans who make it to 65 in good health are now living at least two more decades," said Larry Fink, chief executive officer of BlackRock Inc., the world's largest asset manager.
"Longevity should be a blessing, but if you haven't planned for it, you're going to work much longer than you ever dreamed of doing," he said. "Or you better be good to your children because you're probably going to be living with them."

I'm sorry, Larry, but it seems to be working just fine for me and thousands of others like me. Let's try educating people on their benefits and needs before we say "it isn't working".

 

[modhatter]

Wow, pretty brutal comments. It is a fact that a large percentage of people are just lousy with their own finances. We are all built differently. That is why for many, a forced savings such as social security is a blessing. Problem is, it is not enough to live on. I can still shake my head, and say "what were you thinking" and still have compassion at the same time. And be thankful I am one of the lucky ones who knew better.

 

[dtbach]

There is absolutely no excuse for a person pulling in $120K/year in the 70's to be in such a poor position as he is in. Let's be real, he pissed away all his money. No pity from me, I saved my money and worked on investing it at less then 1/2 of what he was making.

 

[Running_Man]

Other than the quote from Teresa Ghilarducci who is a political hack out to take all the 401K money in exchange for a govenment issued pension, I do not see anywhere this man acted any more than honorable. The story is highlighting a true fact, this scenario is about to be played out more and more often. As Tom Palone shows there is nothing whatsoever wrong in this.

While I realize most people on this forum are far ahead of most people, a realization that this is going to be an increasing problem surely must be evident. Anger towards a person who is doing nothing except hardwork is misplaced. It sounds like he is a pretty darn good worker.

 

[Katsmeow]

I read the article and I think there is a lot that must be missing. The thing that struck me is that he only is receiving $1200 a month in SS. Even if he took it at 62, that implies he didn't have all that many higher earning years.

My DH took SS at 62 1/2 and he currently is receiving almost $1900 a month. During most of our marriage he made less than $100k a year, going over $100k only for the last 10 years or so. When we got married in the early 90s he was making in the high 40s. That is way less than the numbers thrown around for the guy in the article but DH's SS is way higher. So the guy in the article had to make much less than DH made.

Also, most of the cash that he did have came from selling his house. That implies he had no retirement savings before retiring. The article says that he receives a $600 a month pension from a later job in his career. I have the feeling that when he started his business he thought it would be very successful and he put his efforts into it and that ultimately the business didn't succeed.

 

[MooreBonds]

Wow, pretty brutal comments. It is a fact that a large percentage of people are just lousy with their own finances. We are all built differently. That is why for many, a forced savings such as social security is a blessing. Problem is, it is not enough to live on. I can still shake my head, and say "what were you thinking" and still have compassion at the same time. And be thankful I am one of the lucky ones who knew better.

Well, when the article author is trying to spin a story with an agenda, it makes me more sensitive to firing the anti-pity-party cannons:

For middle class households, with incomes ranging from the mid five to low six figures, it's especially grim. When the 2008 financial crisis hit, what little Palome had saved -- $90,000 -- took a beating and he suddenly found himself in need of cash to maintain his lifestyle. With years if not decades of life ahead of him, Palome took the jobs he could find.

This guy had $90,000 in his retirement accounts right before the crash, and it dropped over 50% to $40,000 (at the bottom - we don't know what his balance is today, as they conveniently leave it out). I'm reading the above as the author implying that because of the crash (and only because of the crash) the guy had to go back to work. All because of greedy Wall Street forcing the stock market up so high, and then letting it crash when their house of cards fell apart.

A difference of $55,000 in his account balance would mean a difference of $2,000/year in withdrawals. He wouldn't have to work so hard part-time if all he had to make up was $2,000/year shortfall.

And when you read statements like

They, too, are coming up short. Company-paid pensions are mostly a thing of the past, replaced in the last three decades by 401(k) accounts primarily funded and managed by employees.

the author conveniently ignores the statistic I've seen tossed around the forum of only about 50% (max) of workers ever had a pension to begin with in the "golden years" - and that includes any form of a pension, even if it was just $100/month. So when they say "a thing of the past", they're implying that most people used to rely on them for an easy retirement, when I don't believe that was the case.

I agree that many workers are having a difficult time managing 401k plans themselves, but the previous format of pensions requiring 20-30 years of constant service to amount to any significant income wouldn't be the white knight of retirement for current workers. And what did the 50%+ of workers in the 1950s-90s do who retired without pensions? They obviously found a way with or without a 401k...

 

[haha]

The fact is, life has mostly been hard and unforgiving most of the time men have been on this planet. For ordinary run of the mill people, there were roughly 50-60 golden years after WW2, a shorter time in Japan and Europe.

Everyone likes it when conditions are getting better, nobody much is happy when things are rough. Realities such as this used to be called (and accepted as) the human condition. Today, if things are not tip- top many have a tendency to look for a scapegoat.

A smart person will keep his real feelings under wraps and be careful of what he cheers for.

Ha

 

[dtbach]

Well, when the article author is trying to spin a story with an agenda, it makes me more sensitive to firing the anti-pity-party cannons:



This guy had $90,000 in his retirement accounts right before the crash, and it dropped over 50% to $40,000 (at the bottom - we don't know what his balance is today, as they conveniently leave it out). I'm reading the above as the author implying that because of the crash (and only because of the crash) the guy had to go back to work. All because of greedy Wall Street forcing the stock market up so high, and then letting it crash when their house of cards fell apart.

A difference of $55,000 in his account balance would mean a difference of $2,000/year in withdrawals. He wouldn't have to work so hard part-time if all he had to make up was $2,000/year shortfall.

And when you read statements like



the author conveniently ignores the statistic I've seen tossed around the forum of only about 50% (max) of workers ever had a pension to begin with in the "golden years" - and that includes any form of a pension, even if it was just $100/month. So when they say "a thing of the past", they're implying that most people used to rely on them for an easy retirement, when I don't believe that was the case.

I agree that many workers are having a difficult time managing 401k plans themselves, but the previous format of pensions requiring 20-30 years of constant service to amount to any significant income wouldn't be the white knight of retirement for current workers. And what did the 50%+ of workers in the 1950s-90s do who retired without pensions? They obviously found a way with or without a 401k...

+1 sir!

 

[Midpack]

Another example of why I gave up reading Yahoo! Finance articles years ago.

+1...

 

[sheehs1]

+1...

+1 also

 

[Fred123]

Why all the harsh comments and judgement? Look, the guy messed up. It could happen to anyone, especially if they aren't very good with money. And I admire his fortitude in the face of bad circumstances. He's working hard to make the best of his situation. How can you fault him for that?

 

[daylatedollarshort]

Wow, pretty brutal comments. It is a fact that a large percentage of people are just lousy with their own finances. We are all built differently. That is why for many, a forced savings such as social security is a blessing. Problem is, it is not enough to live on. I can still shake my head, and say "what were you thinking" and still have compassion at the same time. And be thankful I am one of the lucky ones who knew better.

I agree. We can blame the U.S. population in general for not saving more, but the reality is, for whatever reason, many people in this country, even the higher earners, simply don't save a lot and don't plan for retirement. Of the people we know this includes many with college educations and management careers in high tech and finance, and one family that even made millions from a start up but lost it all from too many years of living above their means.

 

[gcgang]

The article could be titled, affluent exec who failed to save during his working years, now pays the price.

 

[Letj]

Most people in the world do not have the means to save to have a self sustainable retirement. Even if they had the means, I am not convinced they would save. This might explain why pensions in most industrialized countries are handled by the government. I am sure it has something to do with human nature.

 

[tylerdurden]

The difference between comments here vs. the ones left on the article are pretty entertaining. By the way, save yourself time and don't read the comments on any Yahoo articles. Ever.

Anyway, as others have mentioned, it's difficult to feel sorry for him. Hopefully he was able to enjoy the years where he lived a pretty luxurious lifestyle (given his income and spending).

 

[REWahoo]

by the way, save yourself time and don't read [-]the comments on[/-] any yahoo articles. Ever.

fify...

 

[Fermion]

Bah, there are loads and loads of coworkers and people in our area who make low 6 figures and have near zero retirement stashed away. They do have the new gold I-phone though.

This isn't just a poor earner problem. If you don't save when you are making $130,000 a year, there really is just no excuse.

 

[redduck]

How could you not feel sorry for a 77 year old widower like this:


Where in this article does this guy ask for sympathy?
+++

Surely another victim of capitalism and greed. How sad that a 77 year old man has to work 2 part-time jobs, standing on his feet for an 8 hour shift at Sam's Club with just 1/2 hour of breaktime! And when he's not doing that, he's standing at a golf club kitchen grill in the Florida heat, while also tending the cash register. The system must be broken!


So this guy had a high 5-figure income in the late 70s/early 80s (even making more later on)....paid for his children's college educations....then gave away his home equity to his children for their own home down payments - and wonders why he can't subsist on his $40,000 401k balance plus Social Security and pension? And we're supposed to feel sorry for his blatant decisions?


Why are you so upset with this guy? He seems willing to work two jobs and doesn't seem to be complaining. You apparently think it's a bad thing that he paid for his children's education and their down payments--and helped his elderly parents.
+++


He admits that he could exist just on his SS and pension - but he wants to be able to travel and do more things that require spending money. Gee, don't we all?

I'm not sure he "admitted" anything. Maybe he just "said" it. But, from what I read in the original post, he is willing to work for what he wants. Don't you think that's a good thing? (I do).

[/QUOTE]

 

[ERhoosier]

At least most of the Yahoo comments on the article's tone were rational. This guy made his financial choices over his lifetime (inc. the gifts to his family) & is now living with the results. I happen to have friends in their 50's who freely admit they will keep w#rking 'forever' to support their desire for expensive lifestyle (homes, cars, travel, etc.). IMHO- This is what freedom of choice is about.

 

[haha]

At least most of the Yahoo comments on the article's tone were rational. This guy made his financial choices over his lifetime (inc. the gifts to his family) & is now living with the results. I happen to have friends in their 50's who freely admit they will keep w#rking 'forever' to support their desire for expensive lifestyle (homes, cars, travel, etc.). IMHO- This is what freedom of choice is about.

Off with their heads!

 

[brewer12345]

Off with their heads!

Land of the free, indeed. The Unabomber had a point.

 

[MooreBonds]

Where in this article does this guy ask for sympathy?

If the article's very title is the (seemingly mathematically incorrect) claim that some 77 year old guy has to slave away for an entire week to make what he used to earn in just 1 hour, do you think the author's trying to ask people to look at him as a loser, or rather focus on a 'down and out' situation and appeal to the tender emotions of someone's heart to draw sympathy? Or do you think it simply has absolutely no bearing or purpose whatsoever to the article?


Why the need to mention how this guy goes to the extreme of 'running his dishwasher just once a week' (although as a single guy, I don't know why he'd run his dishwasher for just 2 plates every day), or "turning off the water heater after he showers in the morning" if the objective isn't to tug at your heart strings and make you feel sorry for this guy, who is apparently pushed to such extremes as these to make ends meet? Why mention about how he flew 1st class in his younger years for work (instead of just saying he had a high paying job), and has since been demoted to standing for 8 hours at Sam's and sweating over a grill in the heat at a country club to scrape by if not specifically to try and make you feel sorry for him by showing how far he's tumbled? (and we'll get to the "why" he tumbled...)

Why are you so upset with this guy? He seems willing to work two jobs and doesn't seem to be complaining. You apparently think it's a bad thing that he paid for his children's education and their down payments--and helped his elderly parents.

Where in my post did I say I was "upset" specifically with the subject (Tom Palome)? I take issue with the overall tone and theme in the article that the author is trying to convey, and the specific financial facts of Tom's case that the author ignores in their attempt to get you to feel sorry for Tom and hate someone else (like ignoring how he wouldn't likely have to work right now if only he hadn't given away his home equity and paid for his childrens' college educations!). I do not have anything specifically against Tom Palome.

As I mentioned in a different post, there is a slant to suggest that the 2008 financial market drop was a major cause in forcing him to go to work:

When the 2008 financial crisis hit, what little Palome had saved -- $90,000 -- took a beating and he suddenly found himself in need of cash to maintain his lifestyle. With years if not decades of life ahead of him, Palome took the jobs he could find.

It's implied that in 2009, Palome 'suddenly' found himself needing cash to fund his lifestyle - which presumably forced him to get a job. It didn't say he was working in 2007/2008 and simply took a different job after the financial crisis - it implies he was retired in 2007.

But even if his portfolio of $90k fully recovered, it doesn't look like it would have been enough to fund the lifestyle he wants to live anyway. Which makes the article's implication that he had to get a job because of the market plunge and his portfolio drop a red herring.

If you were to ask 100 random people what 'caused' the market plunge in 2008, probably 98% (again, random people) would lay the blame with "greedy financial companies" as being the principal culprit, rather than acknowledging that EVERYONE (including some financial institutions more than others) played a role through more lavish than previous lifestyles, which propelled the entire economy at an unsustainably large growth trajectory and eventually collapsed.

By trying to suggest that the market plunge in 2008 was the main reason Palome had to go out and get a job at age 72, it implies (from popular consensus thought) that the greedy bankers/Wall St caused his portfolio to drop, and therefore greedy Wall St. caused this nice old man who used to fly 1st class for work to have to spend his golden years sweating over a grill and standing for 7 1/2 hours handing out free samples, and shutting off his water heater each day. Which appeals to mob psychology to demand "reform" - because if Wall St. can make this high-flying executive reduced to working for minimum wage, imagine what the Middle Class masses will be 'forced to do' to make ends meet in retirement!

And, dear reader, while we're appealing to your emotions and getting you riled up against Wall St, here's another point from someone (the infamous Ghilarducci) suggesting that it's impossible for "an average middle class person" (note Ghilarducci's use of the singular, not plural) to amass a $1MM portfolio to sustain themselves on...even though with a 2 person income household, it is possible by living beneath your means. It also ignores the fact that a "middle class person" probably wouldn't be accustomed to (or "need") $40k in spending from their portfolio if they have SS to maintain their lifestyle, since their smaller portfolio (with SS) could be well above the standard of living they enjoyed while working.

The article mentions how many retirees have very little (or even zero) savings. But does it talk about warning current workers to start saving? Nope. It does, however, quote Palome's "biggest regret":

If Palome has one regret, it's that he didn't get better retirement investing advice somewhere along the line. "I thought I could do it on my own," he said.

It doesn't say that he obviously didn't save enough - it says that he didn't get better investing advice as his biggest regret. Perhaps "investing advice" could partially mean "how much to save", but when I hear the phrase "investing advice", I would bet most "average people" people would associate it nearly entirely with what to buy, not how much to invest, such as perhaps "financial planning" would do.

It appears that the problem in this case isn't spending too much/saving too little, but rather (according to the author) is everyone trying to do it themselves. As many on the ER forum know, investment returns are important - but sometimes just as important is the amount/% of your income you save.

Rather than quote a financial planner who could say "middle class America, look at this guy and take note to save more", instead it has quotes from Teresa Ghilarducci and the author plants seeds and implications that

It's about to get worse. Right behind the current legions of elderly workers is the looming baby boomer generation, who began turning 65 in 2011 and are reaching that age at a rate of about 8,000 a day...They're the first generation expected to fund their own retirements, even as they live longer lives.

What constitutes the definition of "the first generation expected to fund their own retirements"? As mentioned before, even in the heyday, pensions were only going to maybe 50% of Americans (and again, that includes very small pensions as well as larger ones). There are still Boomers who have pensions today - a definite minority, but still some.What did 50% of Americans do back in 1960/1970 to survive?

No historical analysis based on facts and figures, but rather implications that Wall St. will use and abuse you for their gain, and force hordes to work well into their 70s because it's simply impossible to make it in retirement without someone holding your hand and telling you what to do.

Again, I acknowledge that some need their nose wiped their entire lives...but the article appears to take a definite subtle hint in a direction other than simply "save more and consult an hourly financial planner".