Could Retire, But Doesn't Know It

[Conundrum]

I suppose you could help a bit. If you really want to give a great gift give her a list of good starter financial education books. She needs to understand what’s going on with her money. If she doesn’t have a reasonable grasp on that and her annual expenses the likelihood of a failed retirement increases markedly. Just my two cents.

https://www.bogleheads.org/wiki/Book...start-up_Books

[Fedup]

I gave up talking anybody into taking retirement. The last person I was helping was my secretary, she’s still working today. She is about 67. She has a huge pension, but she is not retirement because she doesn’t know where to go. Having one month vacation a year is pretty darn good.

[HI Bill]

Quote:

Originally Posted by REWahoo I have a friend who is 72 and still working due to it being the lesser evil. The thought of being home all day with a domineering and demanding spouse makes continuing to work look pretty good.

My dad retired at 58 when he had a 5-way bypass. My mom, for the same reason cited above, continued to work until she was ~65, then divorced at 68!

[HI Bill]

Quote:

Originally Posted by haha Maybe not everyone equates retiring with winning the Nobel Prize?

Absolutely correct! I have bosses at my office who retired after completing their government service (earning full retirement), then came to the private sector. One, who's 68, is leading a whole floor of engineers and scientists! He doesn't seem to be plannig to retire anytime soon, despite annual declarations that the next bit contract win will allow him to step down!

[omni550]

Quote:

Originally Posted by Elbata The "no good deed..." comment is apropos. And I will be butting out. I'm surprised she came to me with the info that her former company had no info about her retirement (which she's been counting on). On a previous talk with her, (and I don't know how company retirements work), I asked her when her retirement kicked in and she didn't know. I then casually mentioned that isn't that something she might want to check into. When I look at her situation, (at a quick/superficial glance) it looks to me that her NW is ~$4MM. For her to say she's tired of having to be so careful with her money (to me) doesn't jive with reality. But I'll butt out, though I'm curious about her retirement. Most likely she'll be content to keep working at her job and stay with the status quo.

The bolded part above caught my interest.

It might behoove your friend to pursue this a bit more. She was counting on a pension coming...but just now found out there isn't one? Does she have any human resources docs from when she was employed that describe the pension plan? Or pension accrual documentation from when she worked there? Any docs that she receives annually from the former employer that mention how much of her former employer's pension is fully funded? etc?

Two stories:
1) I worked for an employer for 15 years early in my career, accruing a pension benefit. About 5-10 years after I left their employment, and having made two 1000-mile career moves for two other employers, I wondered if my old employer, who had been acquired by another company in the meantime, might have lost track of me.

I wrote to the acquiring-company's HR dept, giving my name, job description, employment location, dates of employment with old employer, my SS#, etc., and asking them to verify my pension details (amount and when payable). Luckily they found my record right away and sent me a letter with all the details I had requested. That ensured that at least they knew I existed. At 65, I started receiving their pension just as they described.


2) I was named Power of Attorney for my bachelor uncle in Canada when he was in his late 80s. He had worked a blue-collar foundry job for about 30-35 years. When I got involved, I realized he wasn't being paid a pension for those many years he had worked even though he had earned one. I spent the better part of a day on the phone, literally calling every entity I could think of and find a phone number for (former employer, the pension fund, government agencies, the bank holding the pension funds, his bank, etc). After hours on the phone, we eventually figured out the problem. It was something to do with when the accounts were first digitized. His unusual last name had been misspelled somewhere in the system, so his pension account was effectively not linked to him and his SIN (Canadian version of SS #). After I got that straightened out, his pension money started flowing, including the ~15 years of pension arrears.

Absolutely no one is more interested in your friend's pension being paid out than she is. I would encourage her to keep pursuing this a bit more, if there's a reason to believe that there are monies due her. I don't know where unclaimed pension funds go in your state, but that might be worth checking into, too.

omni

[UnrealizedPotential]

Quote:

Originally Posted by Fedup I gave up talking anybody into taking retirement. The last person I was helping was my secretary, she’s still working today. She is about 67. She has a huge pension, but she is not retirement because she doesn’t know where to go. Having one month vacation a year is pretty darn good.

I gave up too. It seemed I was always trying to help people who deep down really didn't want my help. They want the end result but don't want to do what it takes to make it happen or they just don't care. Some people are like that. So I butt out.

[Fedup]

Quote:

Originally Posted by UnrealizedPotential I gave up too. It seemed I was always trying to help people who deep down really didn't want my help. They want the end result but don't want to do what it takes to make it happen or they just don't care. Some people are like that. So I butt out.

I also realized some just like to complain, but I’m no longer there therefore I don’t have to listen. Last time she tried to drag me back to office politics there, I turned her down. I said I’m retired now, I don’t want to get stressed out by hearing any more of stuff related to work. No more gossip for me. I haven’t heard from her since.

[Offgrid Organic Farmer]

Quote:

Originally Posted by Elbata ... $1.4MM her share of rental properties managed by her brother

The income off those rentals should be more than enough to support her in style.

Unless the partner is scamming.

[retired1]

Quote:

Originally Posted by Elbata I have a friend that still works. Part-time at Starbucks. Mostly for the health-care but also the money that she earns. She's 62 and wishes she didn't have to work, being so careful with each dollar. Here's what I know about her net worth: $1.4MM her share of rental properties managed by her brother $875K home that son rents (5 years left on note, don't know balance) $875K condo she lives in (paid off) ...

Pretty Solid net worth numbers !

$875K home !!! wow. The taxes for such an expensive home must be high that cause her to worry & keep working... maybe ?

[sheehs1]

Solid net worth but much is tied up in hard assets. The only liquid asset is the $600K in the Roth. Perhaps that is her worry. Can't really comment much since we don't know how much income she receives from the hard assets or how long that will last.

[MrLoco]

Quote:

Originally Posted by sheehs1 Solid net worth but much is tied up in hard assets. The only liquid asset is the $600K in the Roth. Perhaps that is her worry. Can't really comment much since we don't know how much income she receives from the hard assets or how long that will last.

This is what caught my eye as well. I would not feel comfortable having 84% of my assets tied up in real estate entering my retirement years. Needs a little more diversification of assets.

[gauss]

Quote:

Originally Posted by Elbata I have a friend that still works. Part-time at Starbucks. Mostly for the health-care but also the money that she earns. .... Has pension coming--I encouraged her to research it and the last I've heard is that she followed up with that recommendation, talked to finance guy at the company and they could not find anything on her about her pension. SS--is eligible, but delaying. ....

If she has the initiative to get to the bottom of what the status of her pension is, there is free legal assistance available in 30 states (including California) that specializes in exactly this.

The overall site is Counseling Projects | Pension Rights Center

Their California partner is:

WESTERN STATES PENSION ASSISTANCE PROJECT
California Pension Rights Office
https://lsnc.net/pension
(916) 930-4911

Here is a a link to a video that may help stir some motivation on this if she has been frustrated by the pension search so far:

https://www.youtube.com/watch?v=is0c6P5b5Vc

-gauss

[Offgrid Organic Farmer]

Quote:

Originally Posted by Elbata Has pension coming--I encouraged her to research it and the last I've heard is that she followed up with that recommendation, talked to finance guy at the company and they could not find anything on her about her pension.

My wife worked for a Federal agency, and was tracking when exactly she would become eligible for their pension. But when she asked about it, nobody in-house knew anything about their pensions.

Within 90-days of being eligible for the pension, she had to file a request to begin her pension, before their pension department would speak with her. It took them 3 months to review her work history and flesh out the formula used for calculating her pension.

My wife then delayed taking the pension for another 6 months, but at least then we knew how much it was going to be.

[GravitySucks]

Don't tell her.
We need more people making payments to SS!

[Red Badger]

Quote:

Originally Posted by Offgrid Organic Farmer My wife worked for a Federal agency, and was tracking when exactly she would become eligible for their pension. But when she asked about it, nobody in-house knew anything about their pensions. Within 90-days of being eligible for the pension, she had to file a request to begin her pension, before their pension department would speak with her. It took them 3 months to review her work history and flesh out the formula used for calculating her pension. My wife then delayed taking the pension for another 6 months, but at least then we knew how much it was going to be.

My mega-corp had an on-line pension modeling too. I used it extensively during my last few years there. Of course, there was a disclaimer to the effect of "estimate only" stuff. But I could model six ways to Sunday. It helped my to eventually choose 100% joint/survivor. When did eventually apply, it was spot on accurate.

Glad it was there for my usage.

[RenoJay]

I’ll second what others have said about not getting too deep into someone’s finances without being invited. I got too involved with an ex girlfriend’s finances and was labeled “controlling” by her and her friends. Now a few years later, she’s made all the mistakes I predicted (and tried to help her avoid) and now she’s proactively asking me for help. People who don’t live for this stuff often need bite-sized nibbles that they can digest at their own speed. I think pointing her in the right direction on pension stuff would be a great first bite-sized nibble, then step back and wait for additional questions.

[Offgrid Organic Farmer]

Quote:

Originally Posted by Red Badger My mega-corp had an on-line pension modeling too. I used it extensively during my last few years there. Of course, there was a disclaimer to the effect of "estimate only" stuff. But I could model six ways to Sunday. It helped my to eventually choose 100% joint/survivor. When did eventually apply, it was spot on accurate. Glad it was there for my usage.

The SS website also seems to be very user friendly. They send me an update every year, so I can verify my annual income going back to when I was a teenager. And they project my estimated benefits for each year after I become eligible.

Talking to our frends who are on SS, it sounds like those 'estimates' are pretty much right on accurate.

I have been retired for 17 years so far, and I am nowhere near ready to apply for SS benefits, but it is nice knowing they are available whenever I am ready for them.

[Elbata]

Thank you to all for your thoughtful responses.

I'm debating sending her this thread, but fear she'll be upset and possibly not speak to me again.

1. I agree about too much in RE (hard assets).
2. She's a smart girl, I'm sure she'll follow up on her retirement.
3. Her brother is managing the properties and I'm not at all familiar with how things are, but I would greatly doubt any kind of shenanigans.

[HI Bill]

Quote:

Originally Posted by Elbata I'm debating sending her this thread, but fear she'll be upset and possibly not speak to me again.

My advice is...don't. No good can come of it (most people aren't open to help and change, and aren't willing to work toward a goal like this, even if a little work now, means less working). If you think she's different, go ahead, but at your own peril! I've given up trying to offer advice on cameras, unless asked, computers, unless asked, and even 'how to' for underwater photography, unless asked. Otherwise, it goes in on ear and out the other, and almost without exception, they make up their mind based on their own preconceptions or some impulse decision.

[Fedup]

Her retirement is none of your business. But I’m surprised that she has $600K in Roth and no TIRA.