Economic Insecurity and Older Americans

[MichaelB]

60% of women and 41% of men age 65 and older do not have enough income to cover their basic expenses without assistance. Income includes SS, pension and retirement savings, and a paper published by WOW shows more than half of all households with only older people need financial assistance from private or public programs, or family, to get by.

Here is a write up in the NYT Older Women Struggle to Make Ends Meet - NYTimes.com
Here is a link to the study http://www.wowonline.org/documents/OlderAmericansGenderbriefFINAL.pdf

Especially challenged were women living alone and renting. This reinforces the need to save throughout one's entire life.

 

[ratto]

Hopefully the future generations in this country will learn something from this and become more savvy in savings and frugal.

 

[rescueme]

Hopefully the future generations in this country will learn something from this and become more savvy in savings and frugal.

I'm sure they will. For many of the older folks (and I/DW fall within this group), saving/investing for retirement was not a consideration since a lot of us had defined benefit (e.g. pension) plans - the same that our parents/grandparents had in the past, when they did not save/invest for retirement at all.

In both our cases, our private company pension plans were eliminated and we understood that we would have to take care of our own retirement future. While we were both age 34 before our pensions ended, we still made out OK, three decades later, starting at "zero".

Today's (professional) youth? I would say in most cases (as evident of postings on this, and other retirement investment forums), that they understand that they are responsible for their own retirement and are more than willing to start saving/investing at a young age.

 

[Finance Dave]

I've seen numerous similar surveys, most all with the same results.

The one thing that's a little surprising to me is the "no one in the middle" aspect. It seems many have less than $10k, and a modest number have a lot (no specific number that I recall...but enough to where I was saying "yeah, that should be enough"), but there seem to be very few in the middle area.

 

[Walt34]

The astonishing thing to me is how many relatives have made no preparation at all for retirement. One SIL in particular stands out and I think she's in for a very rude awakening in about 10/15 years.

Hope she likes Alpo.

 

[H2ODude]

We're living it. MIL has basically nothing but SS, ~$1200/month. When could no longer work (back issues) we built an addition to accommodate her in 2006. She's now 86 and totally dependent on us (make that more my wife). Has all her marbles but very frail and it always seems like something.

Speaking of which, they thought her Non Hodgkins Lymphoma had returned from 20+/- years ago (lymph glands swollen). Sent to oncologist who did who knows what battery of tests. Got summary in mail from hospital. Charges totaled over $12,000. Really? She paid absolutely nothing between MC and supplemental insurance. But $12,000 to rule out NHL? No wonder the healthcare system is all messed up.

 

[Midpack]

My sister is in that boat. Twice divorced, renting an apt, modest savings, planning largely (probably entirely) on SS and inheritance. She was planning to work until she was 70, but now she's talking about retiring in a few years (63-64), which sounds troublesome though I don't know the details. Fortunately, she appears to happily lead a simple life, with very low spending ($24-30K/yr I'm guessing).

Ironic, but my retiring at 57 has probably driven her to try to push up her date. She never used to talk about retiring, but now that I have, she talks about it all the time...

 

[ziggy29]

Today's elderly seem to either have the best economic deal the world has ever provided or else they seem to have next to nothing. The next generations will be operating on different assumptions about the deal they are getting, and unless they do almost all of it themselves, they shouldn't be surprised if they can't retire at all.

 

[Hamlet]

This actually makes sense.

The behaviors that build wealth tend to snowball.

If you're saving money consistently, you tend to accumulate a lot of money over a lifetime of saving, even if you are saving modest amounts.

If you're spending everything you make, you don't accumulate much outside of home equity.

I've seen numerous similar surveys, most all with the same results.

The one thing that's a little surprising to me is the "no one in the middle" aspect. It seems many have less than $10k, and a modest number have a lot (no specific number that I recall...but enough to where I was saying "yeah, that should be enough"), but there seem to be very few in the middle area.

 

[FinanceDude]

I think the first credit card came out in 1965 or so, not even 50 years later, and our history of frugality as a country is almost totally thrown out the window.......

 

[Andre1969]

I think the first credit card came out in 1965 or so, not even 50 years later, and our history of frugality as a country is almost totally thrown out the window.......

Nah, credit cards date back to the stone age. I remember Wilma Flintstone and Betty Rubble had them. They used to flash them conspicuously as they ran to the department store shouting "Da Da da-da Da Dah....CHAAAAARGE It!!"

 

[Animorph]

Hopefully the young guys now realize no one will be taking care of them when they retire and they will save for it. I think the boomers have been somewhat caught in between great pensions and no pensions, and lower SS and Medicare expectations. If they didn't pay attention, do things differently than in the past, and adjust on the fly as benefits were reduced, they may have let things slide.

 

[Brdofpray]

Just read an article saying that only a chosen few will be able to retire in the future. The rest will have to work to the very end.

We don't think we are one of the chosen few. We worked our behinds off for 30 years preparing for our retirement. We weren't chosen, my DW and I chose it. We made calculated choices through our work life that brought us to this moment.

Sounds like those that did not make good choices early on, are now trying to build a case for their lake of preparation.

My two cents.

 

[traineeinvestor]

Just read an article saying that only a chosen few will be able to retire in the future. The rest will have to work to the very end.

We don't think we are one of the chosen few. We worked our behinds off for 30 years preparing for our retirement. We weren't chosen, my DW and I chose it. We made calculated choices through our work life that brought us to this moment.

Sounds like those that did not make good choices early on, are now trying to build a case for their lake of preparation.

My two cents.

More like the self selected few than the chosen few.

And if it really is going to be only a "few", is it time for more countries to adopt an Australian style mandatory retirement savings regime?

 

[ziggy29]

More like the self selected few than the chosen few.

And if it really is going to be only a "few", is it time for more countries to adopt an Australian style mandatory retirement savings regime?

I've been retirement investing until I almost bled since I was 23. Started at 12% of my income then, now up to about 30%. Given lack of a decent pension, health care insecurity and Social Security/Medicare reforms likely to make it a worse deal or push back my eligibility, it *still* doesn't feel like we'll be able to retire sometimes. Reaslistically I'm pretty sure I can be out by 55 and maybe a little sooner if the financial markets and the health care system cooperate, but right now it just feels like I'll never get out...

 

[MDJO]

Grew up with parents who had been through the Depression. Mom used to save junk mail envelopes to make her grocery lists. Margarine dishes substituted for Tupperware. Only had one car. I walked to the grocery store for her as a kid. No AC, Dad made me a swing set out of scrap pipe he got from work. Dad always had a big saving account. Once I asked him, why don't you buy a bigger home? He was a man of few works: "Son, you can't eat your house". I inherited all of my frugal traits from mom and dad. Still feel like I can't save enough, even though I have far more than most people.....I just have a fear of not having enough money.

 

[justplainbll]

I've been retirement investing until I almost bled since I was 23. Started at 12% of my income then, now up to about 30%. Given lack of a decent pension, health care insecurity and Social Security/Medicare reforms likely to make it a worse deal or push back my eligibility, it *still* doesn't feel like we'll be able to retire sometimes. Reaslistically I'm pretty sure I can be out by 55 and maybe a little sooner if the financial markets and the health care system cooperate, but right now it just feels like I'll never get out...

I started saving 10% of my gross right out of college and stepped it up to 35 - 40% about 10 years before retiring. But I am still concerned about the corrosive effects of inflation and redistribution of 'wealth'.

 

[Mulligan]

More like the self selected few than the chosen few.

And if it really is going to be only a "few", is it time for more countries to adopt an Australian style mandatory retirement savings regime?

If it was a truly individualized account, I would have no problem with this. While I am not a big nanny state guy, the masses have to be protected from themselves. And believe me there are plenty who do not or will not save.

 

[Brdofpray]

If it was a truly individualized account, I would have no problem with this. While I am not a big nanny state guy, the masses have to be protected from themselves. And believe me there are plenty who do not or will not save.

That may be true. But those who had the foresight, and the tenacity to make their retirement happen, shouldn't be faulted by those that did not. I have read articles about how its not fair for you to retire, if I can't. It's not fair.

And my daughter would say, "who said life is fair" (she learned that from me.).

 

[poorgeezer]

I fear that all of this is only going to get worse. Many, many boomers have a totally unrealistic idea of how far they can go on a 401K that is barely big enough to buy a new car. I stopped discussing retirement with my family and friends because it only upsets them. They seem to think that my retirement happened by winning the lottery instead of 30 years of careful saving and delayed spending in almost all areas of my life. The whole thing is depressing.

 

[Mulligan]

That may be true. But those who had the foresight, and the tenacity to make their retirement happen, shouldn't be faulted by those that did not. I have read articles about how its not fair for you to retire, if I can't. It's not fair.

And my daughter would say, "who said life is fair" (she learned that from me.).

My opinion is more selfish than it appears. If we dont force them to save for themselves, the tax burden for those that do could become greater to take care of them whether we want to or not. That is my concern.

 

[misty57]

Geez, I could repeat a lot of what has already been posted. I was born to frugal Depression age parents who taught me a lot about how to stretch a dime. We've been "savagely saving" for retirement since our early 20s. I always advise young people to save as much as they can as early as they can for retirement, etc.

DH will FIRE this year. The crap shoot is the federal government and what they'll do with SS, Medicare, taxes, and where inflation is headed in the future. I will be a little more than perturbed if we are penalized because we planned and saved to FIRE.

 

[Brdofpray]

My opinion is more selfish than it appears. If we dont force them to save for themselves, the tax burden for those that do could become greater to take care of them whether we want to or not. That is my concern.

+1

 

[traineeinvestor]

My opinion is more selfish than it appears. If we dont force them to save for themselves, the tax burden for those that do could become greater to take care of them whether we want to or not. That is my concern.

+2

that said, I see nothing selfish about forcing those who can save to actually do so rather than chosing not to and then imposing a burden on the rest of us (obviously, the taxpayer funded safety net should still be there for those who cannot)

 

[jclarksnakes]

I suppose they all have their own stories. Some made a serious mistake and failed to save for their old age and some others may have ended up where they are through some very bad luck.