Seniors in Debt

[Bikerdude]

Quote from USA Today article on Seniors in Debt:

"Seniors such as Irvin Towson, 84, find themselves needing a job to pay off debt. Towson, of Goldsboro, N.C., was laid off as a fire-department fundraiser in 2005 after having a heart attack and a stroke. For about a year, he's been unable to pay the minimum on about $15,000 in credit card bills. "They send you credit cards in the mail, and you take them and use them because you don't have any idea that you're going to get sick one day," Towson says. "I had no plans to retire. I was going to go as long as I could."" :

http://www.usatoday.com/money/perfi/retirement/2007-01-22-senior-debt-usat_x.htm

 

[tryan]

I was going to go as long as I could.

... and he did. :

 

[Martha]

Back when I used to be a bankruptcy trustee I was surprised at the number of elderly people who got themselves into jams with spending. Gambling was a problem with some. Others had children who bled them dry.

 

[Sandy]

This is quite scary and bound to get worse, especially as the "invincible" baby boomers come face-to-face with expensive health care needs combined with limited savings due to constant spending.

 

[slepyhed]

Quote from USA Today article on Seniors in Debt:
... "I had no plans to retire. I was going to go as long as I could."

Off topic, but that was pretty much my old boss's plan. He said he viewed retirement as a "death sentence", and he planned to keep working for as long as they would let him stay. When the day finally came that they showed him the door, he was really PO'd. He had never prepared himself mentally for that day. Now 6 months later he's still bitter...

On topic, here's the last line in the article:

"I didn't expect all this (debt)" in retirement, Ronald says. "I had saved money, but it just seemed like it went away overnight."

I view my retirement savings as invested capital and the earnings will pay my expenses. If my investments go horribly wrong (worst case scenario), I'll have to spend the principal to live in retirement. Ronald in this story spent his savings almost right away. I'm left thinking that he viewed his savings as a pile of money to be spent during retirement. It makes me wonder, are most Americans more like Ronald or more like me? I'm afraid I know the answer to that...

 

[CompoundInterestFan]

Pretty scary stuff. It brings up something I've always wondered about. I would guess that the mindset of the people on this board (LBYM, generating enough in investments to live off the interest, etc.), represents the minority of people in this country. So.... if that's the case, obviously not many people are going to be able to support themselves in retirement. What does that say about the future of this country? Perhaps I'm being too pessimistic, but obviously if the majority of the population can't support themselves in retirement, either some major changes will be made (super Social Security?) or they'll be big problems. Any thoughts on this?

 

[FinanceDude]

Pretty scary stuff. It brings up something I've always wondered about. I would guess that the mindset of the people on this board (LBYM, generating enough in investments to live off the interest, etc.), represents the minority of people in this country. So.... if that's the case, obviously not many people are going to be able to support themselves in retirement. What does that say about the future of this country? Perhaps I'm being too pessimistic, but obviously if the majority of the population can't support themselves in retirement, either some major changes will be made (super Social Security?) or they'll be big problems. Any thoughts on this?

Problem is that SS was NEVER intended to be the ONLY "safety net" for people who retire.

One of the biggest problems in the US as a country is we refuse to take personal accountability for our financial future.. And because of that, our standard of living is slowly eroding.

Government could MANDATE a secure retirement for everyone, but at what cost? Most folks I talk to think they are paying their share...................

 

[cute fuzzy bunny]

Take a good look at the US around a hundred years ago, prior to social security.

Most people worked until they dropped, many lived in group homes or with family after they were no longer able to work full time. Retirement was afforded to only a select few wealthy people. Much shorter lifespans then, though.

With higher spending and weak retirement savings, we might revert to some of these options:

http://www.elderweb.com/home/node/2816

The part about 'early retirement communities' is kind of interesting.

 

[Bikerdude]

Pretty scary stuff.

either some major changes will be made (super Social Security?) or they'll be big problems. Any thoughts on this?

I hope I'm wrong but I would say your "super social security" will be Socialism.

 

[Outtahere]

I'm in partly sunny FL right now staying with my stepdad, he is definately one of those people that planned very little and took a big hit when Lucent went down the tubes. Last night he said they will be fine but being fine is him working 4 days a week and his wife working two. It would only take one major problem to put them both in debt big time. We clearly have different views on money so I try not to discuss it when I'm here.

 

[FinanceDude]

Take a good look at the US around a hundred years ago, prior to social security.

Most people worked until they dropped, many lived in group homes or with family after they were no longer able to work full time. Retirement was afforded to only a select few wealthy people. Much shorter lifespans then, though.

With higher spending and weak retirement savings, we might revert to some of these options:

http://www.elderweb.com/home/node/2816

The part about 'early retirement communities' is kind of interesting.

Well............I would bet the average wage earner makes a LOT more than the sweatshops of the early 20th century, when about 20 people controlled 95% of the wealth in America.

Everyone today has THE OPPORTUNITY to be FI.........most do not have the GUMPTION to do so..................

 

[cute fuzzy bunny]

Most assuredly they make more now...and spend it all.

 

[FinanceDude]

Most assuredly they make more now...and spend it all.

Gotta love the bankruptcy law reform...........they leveled off last year, now are rising again, as lawyers have figured out how to beat the "tougher" legislation.........

That old saying: "How can I be out of money, I have checks left"?? may be truer now than then..........

 

[Martha]

Gotta love the bankruptcy law reform...........they leveled off last year, now are rising again, as lawyers have figured out how to beat the "tougher" legislation.........

I am not in the game anymore, but I don't think lawyers have figured out how to "beat the tougher legislation." I think a lot of the slow down was lawyers figuring out what to do and people thinking that the new law barred them from filing bankruptcy, when it did not. Most certainly, bankruptcy got more expensive. Some people because of to much income or assets now have to file chapter 13, but there are plenty who remain eligible for chapter 7 basic bankruptcy.

Some lawyers have left the bankrutpcy filing business and so more of that business is going to lawyers who concentrate in that area. My old office got out of the business because they could not do the work and make money at it. The new requirements made it too expensive for our firm to handle.

Everyone today has THE OPPORTUNITY to be FI.........most do not have the GUMPTION to do so..................

Come on, you know that isn't true. You are not channeling JG, are you? I find it interesting how many successful people say anyone can be successful like me if they just applied themselves. Tell that to the young people I know who hang out at the Lifehouse , battling demons of child abuse, mental illness and drug addiction. But hey, they can be FI if they only applied themselves.

 

[jdw_fire]

Problem is that SS was NEVER intended to be the ONLY "safety net" for people who retire.

You should go reread this thread

Actually, SS was set up as a "weak" pension system in the 1930s by FDR to get older workers to leave the workforce so there would be jobs for younger workers due to the high unemployment rate at the time. Granted it had other safety net provisions also.

 

[CompoundInterestFan]

I hope I'm wrong but I would say your "super social security" will be Socialism.

Just wanted to clarify that I wasn't advocating "super social security," (which would most likely be socialism) or anything like it. I think individuals should be responsible for their financial security, and I definitely believe its a matter of choice and discipline. I was just thinking that if the majority of people weren't able to support themselves in retirement, they would probably demand some sort of help from the government. Again, this may just be the pessimistic side of me. Maybe the people who haven't saved would just accept that they'll have to work until they drop dead; who knows?

 

[rs0460a]

"We've heard anecdotes of individuals who would get a credit card offer in the mail and didn't understand that when you have a credit card, you have to pay it back with interest"

Wow! Looks like we also have to have some "financial management" classes for the elderly, along with the young...

How sad ...

- Ron

 

[2B]

Come on, you know that isn't true. You are not channeling JG, are you? I find it interesting how many successful people say anyone can be successful like me if they just applied themselves. Tell that to the young people I know who hang out at the Lifehouse , battling demons of child abuse, mental illness and drug addiction. But hey, they can be FI if they only applied themselves.

Maybe the son of a crack addict can't be president of the US but that doesn't mean they can't get a decent education and get a decent job to become FI -- if they aren't chemically destroyed and they get a clue.

My father delivered mail and my mother didn't. She actually never did much except spend our family into perpetual debt. The problem was always (in her view) that my father didn't make enough. That was a great object lesson and I am in decent financial shape because of their problems. I really don't have a lot of sympathy for people who are pathetic because their parents weren't rich. Injesting chemicals into your body was a popular past time when I was in high school and college that I didn't join in. I can't feel a lot of sympathy for those participants either. Life is tough but it's a lot tougher when you make stupid decisions.

 

[2B]

Here's a great plan.

Accumulate all of those credit cards you receive. Pile them up so you have a great potential credit amount. Play one card off against another, transfer balances, borrow to pay the minimum payments. When you get sick and can't handle it anymore ignore it all. They can't get anything from you if you don't have it.

That's a path forward for the baby boomer who haven't saved. The key is to downsize your lifestyle as your credit collapses. SS is exempt from judgements. Let Bank of America finance your early retirement.

 

[Bikerdude]

I was just thinking that if the majority of people weren't able to support themselves in retirement, they would probably demand some sort of help from the government.

:

Again, this may just be the pessimistic side of me. Maybe the people who haven't saved would just accept that they'll have to work until they drop dead; who knows? :

 

[FinanceDude]

Come on, you know that isn't true. You are not channeling JG, are you? I find it interesting how many successful people say anyone can be successful like me if they just applied themselves. Tell that to the young people I know who hang out at the Lifehouse , battling demons of child abuse, mental illness and drug addiction. But hey, they can be FI if they only applied themselves.

Yet there are a LOT of folks who have had a bad lot in life that found a way to make it work. I am a victim of child abuse myself, but I guess I lucked out on the mental illness and drug addiction part............

There are several times I could have thrown up my hands and given up, but I didn't. I think MANY people on this board can say the same thing. I realize there are cases where "normal" doesn't apply..............

 

[Jarhead*]

Yet there are a LOT of folks who have had a bad lot in life that found a way to make it work. I am a victim of child abuse myself, but I guess I lucked out on the mental illness and drug addiction part............

FinanceDude: Child abuse is no laughing matter.

However, in a recent post where you were almost "giddy" that John Galt was returning to the board, I think your mental health is in question.

 

[cute fuzzy bunny]

Accumulate all of those credit cards you receive. Pile them up so you have a great potential credit amount. Play one card off against another, transfer balances, borrow to pay the minimum payments. When you get sick and can't handle it anymore ignore it all. They can't get anything from you if you don't have it.

Ah, the modified John Galt maneuver, minus sucking money out of the wife and then dumping her.

 

[FinanceDude]

FinanceDude: Child abuse is no laughing matter.

However, in a recent post where you were almost "giddy" that John Galt was returning to the board, I think your mental health is in question.

Well.................I went to several therapists to get over the child abuse part. Child abuse takes many forms, not always physical or sexual...........it took me many years to move beyond it...........I guess I realized it because I had a habit of feeling guilty when good things happened to me as a result of hard work............repressed guilt was at work........

Once I was able to forgive, I was able to move on, and remove the shackles of mental confinement..........

As for JG, the dude cracks me up.........if 50% of what he says really happened actually did...........that is funny as hell. If NONE of it happened, it's even funnier.............either way, perhaps I am a rare person who is so EASILY AMUSED............

 

[cute fuzzy bunny]

Somewhere in between zero and 50% is probably reasonable.

I particularly liked the part where he claimed to have owned a hunting club to impress the gun owners over at raddrs board, none of which seemed to be particularly impressed with anything he said.

His wife says he never owned anything like that at all.