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-   -   Ouch!! (http://www.early-retirement.org/forums/f28/ouch-28321.html)

FinanceDude 06-18-2007 04:28 PM

Ouch!!
 
I recently turned 60. I have a small retirement fund with the company for which I work, roughly 27 to 28K at this point. I DO NOT want to work past 65 or 66. Is there any way to turn my financial mess around? I have never seriously thought of retirement and the need for money until recently. My philosophy was spend it if you've got, because you can't take it with you. Not sound financial thinking. Is there any hope?
— Gene H. Urbandale, Iowa
There’s always hope. But depending on your current living standard, it may be difficult — if not impossible — to stop working at 66 with $28,000 in savings. The only way you’ll know for sure is to sit down and work out a plan. The process is fairly simple:
Figure out how much you think you’ll need to support yourself. If you don’t have a monthly budget, sit down and make one — you’ll need to stick to a budget even more carefully once you stop working. Some retirement planners use rules of thumb like 70 percent of current spending, but only you can decide how much you really need. You may have to make some fairly drastic changes: some people end up moving to a cheaper part of the country to stretch their spending power, for example.
If you’re currently covered by health insurance at work, try to figure how much you’ll need to budget for health care expenses. Even though you’ll be eligible for Medicare, it doesn’t cover all health costs. The rapid rise in health care costs is one of the leading causes of bankruptcy filings among Americans over the age of 55.



:p:p

TromboneAl 06-18-2007 04:39 PM

Quote:

My philosophy was spend it if you've got, because you can't take it with you.
I call this "decision by cliche," and a lot of people do this. For example, someone will be deciding whether to spend money on an expensive trip. After just a little thinking about budgeting, etc, he/she'll say something like "Well, it's only money!" or "You only live once" or "I could die tomorrow" or "I work hard -- I deserve this." And that effectively cuts off any further analysis.

Sam 06-18-2007 04:42 PM

Quote:

Originally Posted by FinanceDude (Post 527149)
There’s always hope. But depending on your current living standard, it may be difficult — if not impossible — to stop working at 66 with $28,000 in savings.

What a load of BS. Why didn't they come out with an honest factual answer: "No, it can't be done. You can't have it both ways."

REWahoo 06-18-2007 04:45 PM

I read Scott Burns column in the paper this morning Dude, what you posted looks very familiar. Did you forget to credit him with this quote and provide a link? :)

cute fuzzy bunny 06-18-2007 04:56 PM

"Contact SteveR to see if you can acquire the screw from his old avatar..."

loosechickens 06-18-2007 05:22 PM

It can be done, and we know plenty of people doing it.....but you will have to have and use ingenuity, creativity and learn ways of living well on very little to do it successfully.

If you are serious, start TODAY to find ways to simplify your life, cut your expenses to the bone, learn new skills that will help you live more cheaply, think of ways that you could perhaps work part time in retirement, especially until you are really elderly, in order to keep saving and to try to keep your nest egg intact until you really need it, i.e. when you are too elderly or frail to contribute even part time income, etc.

The key will be if you can become a person who values time, freedom, friends and family over expensive hobbies and activities, material belongings, trips, restaurant dining, etc.

Certainly people manage on only a Social Security income every day in this country, nearly half of all Social Security recipients depend on that check for all or nearly all their income, but I'd work really, really hard in these next five or six years to live way below your income, make whatever changes necessary in lifestyle, where you live, etc., save like you mean it, and redirect your efforts to finding pleasure in free or very inexpensive activities.

It may be really hard, because you sound like you've lived up until now with a very different philosophy. Start Googling on Voluntary Simplicity, simple living, frugality, living below your means, etc., to start developing the skills you'll need to have a happy and healthy retirement, even on a shoestring.

LooseChickens

FinanceDude 06-18-2007 06:56 PM

Quote:

Originally Posted by REWahoo (Post 527162)
I read Scott Burns column in the paper this morning Dude, what you posted looks very familiar. Did you forget to credit him with this quote and provide a link? :)

Is that a required thing to do? :confused::confused:

I have lost some respect for Scott Burns, as he seems to have joined other financial columnists in getting a bigger peice of the pie..............:p

aenlighten 06-18-2007 06:58 PM

Otherwise there is that old standby
 
Die then. Fun while it lasted wasn't it. :p

JustCurious 06-18-2007 07:03 PM

For some people, the "live for the moment and don't worry about retirement" plan actually works. On average only about 82% of people will even live to be age 65, and only about 75% of people will live to see 70.

http://www.cdc.gov/nchs/data/nvsr/nvsr54/nvsr54_14.pdf


So for about 25-30 percent of the population, living for the moment and ignoring retirement savings is actually the right decision. Of course, we can't know in advance if we will be in the 75% who survive or the 25% who don't. ;)

For those who survive to be that age, and who failed to save enough to provide for their retirement in the same lifestyle that they are accusomed, the either have to continue to work to fund their lifestyle, or cut back and live off of less using whatever savings they did manage to keep plus social security, plus assistance from family members, or a combination of the above.

Also, as we age beyond 70+, we tend to decline in health and vigor, so our quality of life tends to slowly decrease, regardless of how much money we have. I know, I know, there are always exceptions to this rule, but it is a biological fact of life. So maybe it is logical after all to enjoy life in the moment while you are young and not foresake things until you are old, not knowing if you will make it to be old. Of course, saving along the way is prudent. Everything in moderation.

73ss454 06-18-2007 07:35 PM

I think the guy should buy 28K lottery tickets, at least he has a shot then.

Nords 06-18-2007 07:48 PM

Quote:

Originally Posted by FinanceDude (Post 527209)
Is that a required thing to do? :confused::confused:

Yeah, the general discussion-board rule is to not duplicate copyrighted material without referencing the source (for example by providing a link). A brief excerpt or a few sentences is acceptable.

Otherwise people would be posting their entire WSJ subscriptions here, and eventually some media company (or Scott Burns, Inc.) would do something about it.

Burns does an excellent job explaining complicated subjects with small words to blissfully-ignorant people. But he'll work until he dies, and the concept of retirement is all a foreign hypothetical theory to him. He kinda lacks credibility on the subject...

Bikerdude 06-18-2007 10:11 PM

Eat, drink and be merry for tomorrow may never come! The problem with that (or not) statement is for most of us...tomorrow ALWAYS comes. Best to be prepared. :)

Khan 06-18-2007 10:27 PM

Quote:

Originally Posted by Bikerdude (Post 527294)
Eat, drink and be merry for tomorrow may never come! The problem with that (or not) statement is for most of us...tomorrow ALWAYS comes. Best to be prepared. :)

Drink and dance and laugh and lie;
Love, the reeling midnight through;
For tomorrow we shall die!
(But, alas, we never do.)
~ Dorothy Parker

Alex 06-18-2007 11:56 PM

The only option is to continue working. Maybe when his SOC SEC kicks in he can go part time? What a shame. He should have planned better. You know the old saw: He who fails to plan, Plans to fail.

old woman 06-19-2007 02:22 AM

My dad's sister in law worked until just before her 90th birthday because she never saved for retirement. She passed out at work they took her to the hospital and put in a pacemaker so she lost her job. If she has started saving for retirement at 60 and saved half her income or even less than half until 75 she could have retired much sooner.
The longer you work the less you need to save to retire. If you only saved $100,000 for retirement that would last you at 10K per year for 10 years start drawing it at 80 and it is likely to last the rest of your life. If you could save it by 70 and take 5,000 per year and delay SS until 70 you would have about 100 a week more than someone living on just SS. That would buy plenty of cat food.
We all want more comfort but removing the pain of living on just SS can be done with a late start.
The difference in lifestyle living on 12K to living on 24K is much more than the difference between 24K and 36K.


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