Most Retirees Survive

[RonBoyd]

http://online.wsj.com/articles/despi...age-1410049111

Quote:

And life has a way of throwing financial or health-related curve balls even when we have planned ahead or think everything is under control. But the reality is that most people simply find a way to adjust.

[Amethyst]

Naturally they do. Consider the alternative to survival.

Amethyst

[W2R]

Quote:

And life has a way of throwing financial or health-related curve balls even when we have planned ahead or think everything is under control.

(emphasis mine)

I hope not! Many of us here on the board have planned ahead and think we have everything under control. I know that I even think I've got my situation under control even if there is another 2008-2009 style recession. So, it would be quite a shock if everything started crumbling beneath me.

But you know - - the author is right. You never know what life will bring. Massive (double digit) inflation has not happened lately and I am not used to coping with it, for example. In general, I think all of us have had times when everything went our way, and other times when it seemed like nothing financially good would ever happen to us again.

Bearing that in mind, over the years I have determined what I might do if I could no longer afford to live in my present house (much less move into the gorgeous and more expensive house on which I made an unsuccessful offer this week). I know just the neighborhood to look in if I was looking for a very tiny cheap older home.

Sometimes homes built in the 1950's, with just 1 bathroom, no updating, and about 500-700 square feet, are amazingly cheap.

[Major Tom]

Quote:

And life has a way of throwing financial or health-related curve balls even when we have planned ahead or think everything is under control.

Which is why many of us here are rather conservative with our withdrawal approaches.

If I may digress a little, for those who use the Firecalc/SWR line of thinking, I occasionally wonder about those who say they are comfortable with a success rate lower than 100% - or even those who are happy with a success rate right at 100%. If history acts roughly like it did in the past, then our intrepid early retiree won't run out of money but what if he happens upon one of the less desirable sequences of returns? Will he/she be comfortable with how low his/her portfolio balance could go? Technically, if you still have a few dollars in the bank, you haven't run out of money..........

[H2ODude]

Quote:

Originally Posted by W2R (emphasis mine) Sometimes homes built in the 1950's, with just 1 bathroom, no updating, and about 500-700 square feet, are amazingly cheap.

Very true, but the problem is often that the neighborhood isn't one I'd care to live in. For that matter, unless we went into a condo we will likely always have more area than we need because of the surroundings we'd want.

[Moemg]

Everybody gets curve balls now & then it's part of life .I 'd rather have a financial curve ball & then a serious medical one .

[Amethyst]

Ain't that the truth.

Amethyst

Quote:

Originally Posted by Moemg Everybody gets curved balls now & then it's part of life .I 'd rather have a financial curve ball & then a serious medical one .

[Andre1969]

Quote:

Originally Posted by H2ODude Very true, but the problem is often that the neighborhood isn't one I'd care to live in. For that matter, unless we went into a condo we will likely always have more area than we need because of the surroundings we'd want.

Around these parts (Maryland suburbs of DC) you're not going to find much at all in the 500-700 square foot range, unless it's an efficiency apartment in someone's basement. There is one community, Greenbelt Homes Incorporated, or GHI, that is the country's oldest successful co-op. You can get a flat over there of around 550-600 square feet, for around $55-70K. There's one on the market right now, for $59,900, billed as a 1br/1ba, upper level unit. 575 square feet. Built in 1941. Actually looks pretty nice. Co-op fee is $200 per month, but that includes property taxes. So you'd have to just foot the bill for heat, cooling, telephone, cable, and water.

Not a bad deal, actually, if you want to go a bit minimalist. I think the lower-level flats have a small yard. And you can get a small townhome for as little as $130-140K. GHI is populated mainly by older residents. One thing they do to keep out the riff-raff is make you put 10% down, and it must be your principal residence. You can't buy it and rent it out.

Other than that though, most smaller places are going to be condos in bad neighborhoods, or house trailers. The condos in the bad neighborhoods will have ridiculous condo fees, and will be hard to refinance and re-sell because of a high percentage of rentals, and vacant units. And the trailer parks are going to come with a lot rent of around $700+/mo.

Most new construction around these parts is condos and luxury townhomes for the smaller square footage set, and 3000+ sq foot wanna-be McMansions on the single family front. Long gone are the days of sprawling ranchers and more modest homes. If it's a single family lot, the builder is going to try to get the most bang for his buck out of it. Suddenly I feel grateful for my 98 year old, 1500 square foot house on 4+ acres, that the county only has listed at 1106 square feet. And I'm not about to correct them on that!

[kimcdougc]

Life has a way of working out. I think back to when we married in 1979 and how hard it was then and we made it through with a lot of mac and cheese and pinto beans. Can do it again if we have to. Don't plan to, but it is good to know we could if we had to. We have it in us.

[Major Tom]

Quote:

Originally Posted by kimcdougc we made it through with a lot of mac and cheese and pinto beans.

It's funny to me how a lot of folk talk about beans as an example of a food to be eaten only during hard times. Beans are a great source of protein and fiber and if prepared and served in the right way, are tasty too. I eat beans for lunch almost every day - sometimes with a few slivers of a nice, tasty cheese on top.

Then there's Mac and cheese. A good mac n' cheese is a delight! We have a new restaurant here in town that specializes in mac n' cheese, with something like a dozen different types on the menu. I keep meaning to give it a try.

menu | Homeroom

[Moemg]

Quote:

Originally Posted by Major Tom Then there's Mac and cheese. A good mac n' cheese is a delight! We have a new restaurant here in town that specializes in mac n' cheese, with something like a dozen different types on the menu. I keep meaning to give it a try. menu | Homeroom

A lot of the restaurants here have lobster mac & cheese on their menu . I made it at home a few times per request of SO .

[Major Tom]

Lobster mac and cheese sounds divine Moemg!

[NW-Bound]

Quote:

Originally Posted by Moemg Everybody gets curve balls now & then it's part of life .I 'd rather have a financial curve ball & then a serious medical one .

+1

A financial shortcoming simply means a reduction in the quality of life, and even that is dubious, or highly subjective. Are we saying that a person living in a mansion is having a higher quality of life than one living in a small apartment?

A medical curve ball may mean you have NO life. And without life, there is ZERO quality.

[RonBoyd]

Quote:

Originally Posted by NW-Bound A medical curve ball may mean you have NO life. And without life, there is ZERO quality.

Unless, of course, the medical hit is not enough to kill you in the short term but serious enough to deplete the assets of even the most prepared long before it does. Poverty and incapacitated (but not comatose)... hmmmm.

(I am not really being pessimistic but merely pointing out a worst case scenario.)

[unclemick]

Quote:

Originally Posted by Major Tom It's funny to me how a lot of folk talk about beans as an example of a food to be eaten only during hard times. Beans are a great source of protein and fiber and if prepared and served in the right way, are tasty too. I eat beans for lunch almost every day - sometimes with a few slivers of a nice, tasty cheese on top. Then there's Mac and cheese. A good mac n' cheese is a delight! We have a new restaurant here in town that specializes in mac n' cheese, with something like a dozen different types on the menu. I keep meaning to give it a try. menu | Homeroom

Been trying for years to duplicate my memory of Rocky and Carlos Mac and Cheese to my satisfaction - not yet. But my red beans with ham hocks and 'mild' Polish sausage from Bicklemeyers Meats of Kansas City is pretty good for my taste.

Aggressive expense/budget variation, Mr Market's up's and down's, Katrina, relocation inland, getting married at age 71 make ER predictions /forward planning/replanning interesting to say the least.

heh heh heh -

[NW-Bound]

Quote:

Originally Posted by RonBoyd Unless, of course, the medical hit is not enough to kill you in the short term but serious enough to deplete the assets of even the most prepared long before it does. Poverty and incapacitated (but not comatose)... hmmmm. (I am not really being pessimistic but merely pointing out a worst case scenario.)

Yikes! That's two curve balls. I would surrender. What I meant was that most people suffering bad illnesses would rather exchange their wealth for health, if it is at all possible.

The truth is that we are all going to die, and except for those with sudden death, will suffer to some extent before we expire. This is something that concerns me more than the issues of money. It's not that I can do much about it, but it shows the relative unimportance of money issues.

I know I can live on just SS if I lose everything else, but some illnesses may cause lots of suffering that money cannot ameliorate.

[LitGal]

Quote:

Originally Posted by kimcdougc Life has a way of working out. I think back to when we married in 1979 and how hard it was then and we made it through with a lot of mac and cheese and pinto beans. Can do it again if we have to. Don't plan to, but it is good to know we could if we had to. We have it in us.

+1 We were married back in 1979 too. With DH on a minimal salary and me starting two years of grad school, times were tight. But with a big vegetable garden, LBYM, and my TA-ship, we were able to buy our tiny first house AND be very happy.

If we had to do it again, one difference would be that now we are older and "creakier." But, now, we don't have to work like we did back then. So life would still be good.

(We are no longer moving from money pit to money pit, fixing up fixer-uppers, while also working 60-hr. weeks AND trying raise a decent future citizen.)

Now, it's just us in our paid-off dream home. Mac and cheese and beans? Fine. We always did like them, and still do.

[Moemg]

Quote:

Originally Posted by Major Tom Lobster mac and cheese sounds divine Moemg!

Here is the recipe I use . It makes a lot !Lobster Mac and Cheese Recipe : Ina Garten : Food Network

[athena53]

Quote:

Originally Posted by LitGal Now, it's just us in our paid-off dream home. Mac and cheese and beans? Fine. We always did like them, and still do.

Our favorite is DH's navy bean soup, made with an ultra-cheap ham hock and accompanied by corn bread made in a cast-iron skillet. We laugh at how cheap some of our meals are.

[FIREd]

I like lentils a lot. One of my favorite dishes is a green lentil stew with bacon bits. Yum. Love black bean veggie burgers too.