What If You Run Out of Money?

[kimcdougc]

Wow! You have hit the nail on the head.

The other day, I watched the interview of some homeless people on Youtube. Not all of the down-and-out people are on drugs or mentally unstable. There was this guy who said that it was difficult for him to get hired when he had no address to put on an application, or a place to clean himself up to make himself presentable. He added that if he had a relative for support, it would not be so hard.

At the end of life when you are really old and disabled, having no one to look after your well being makes things more difficult even when you have money.

This is true. Sometimes it is because the people who care the most about you are old too.

 

[daylatedollarshort]

The longest running study on happiness found the most important factor was social connections, which is pretty cool because making more social connections doesn't have to be expensive.

 

[rubytuesday]

Didn't get to read this entire topic yet, but if you have worked for 10 years and are therefore covered by social security, you cannot completely run out of money. There is subsidized low income senior housing, where you pay very low rent (I think it is limited to 1/3 of your total income), you buy food for the rest of your SS income, medical care is covered by Medicaid. Not the greatest way to live, but the basics are covered (ie, housing, food and medical care).

 

[2retireearly]

It seems as if you are disabled you will get more social benefits...money, aid, transportation.

 

[karen1972]

If you truly run out of money, then you are left up to what the state can provide.

I have many a relative that have gone down that path.
Housing: Assuming you exhaust everything selling the house. If you are lucky there is a spot in a section 8 housing type unit for elders. Ours has a waiting list of roughly 10 months. If you can't get in there, you will be forced to move up to 50 miles away to some other available housing which means you will not see or know anyone.

Food: Snap provides some, meals on wheels, food bank and honestly, you go to every single persons funeral,etc at church you know and eat the lunch provided. I've seen this as the primary way of eating in my town so they can save their money for meds.

Medical: You will get medical, a minimal amount of care, lots of prescriptions won't be included and you have to figure out how to get to/from the doctors which is often more of an obstacle in small towns than anything else. Often if you end up in the hospital, you won't be coming out or you end up at some shady rehab place where the recovering rates aren't good.

So basically you wake up everyday and your not dead. Your not suppose to have any money so you can't get a haircut, you can't afford toilet paper (as that can't be bought on SNAP), you barely have meds, you can't get from point a/b, and you may be living far away from everyone and everything you ever have known... but your not dead, homeless or starving which is the criteria. Basically you rely on family, friends and church to help provide any minute comfort in your final days.

Or you figure out how to work the system and its all good.

As for why do people get there.. well bad investments, spouses/agents that lie/steal from you, and just poor planning. Typically a spouse dies early and they didn't have proper life insurance or one spouse consumes vast amounts of assets in their final days leaving the surviving spouse penniless. People didn't read the fine print and realize the pension only was on the one person or the universal life policy you took out was basically fraud or the LTC insurance hosed you. And then there are all the people who never had anything, always lived in section 8 housing even during their working days so aren't going to magically have money when they turn 65/70/85.

My grandpa died at 56, was a farmer, had a tiny policy on himself, he left behind 10 kids, 9 of them under the age of 18, one still in diapers. Grandma died with about $30k left and it took a village to raise the kids, grown their own food, try to keep some income going on the farm until the youngest got older. Grandma then sold the farm, bought a mobile home, lived with one of the kids and did absolutely nothing so she wouldn't spend a dime.

 

[Teacher Terry]

Old people with disabilities usually end up very isolated and lonely. Transportation can be difficult or non-existent in many communities. Here the waiting list is 3 years for housing for low income seniors.

 

[aja8888]

Yeah, that's why I got married again -

For someone to take care of you when you get too old to do it yourself?

 

[Car-Guy]

For someone to take care of you when you get too old to do it yourself?

Now Howard Marshall had the right "idea". He just waited to long.

 

[rubytuesday]

Old people with disabilities usually end up very isolated and lonely. Transportation can be difficult or non-existent in many communities. Here the waiting list is 3 years for housing for low income seniors.

But, as several people pointed out, running out of money typically does not happen suddenly in 24 hours. If one applies for subsidized housing as soon as one can qualify (and in LA or San Francisco you can qualify for low income housing if you still earn a substantial money by rural criteria), then one typically can make ends meet for 3 years until one gets to the top of that waiting list.

 

[Teacher Terry]

Here you can’t apply until you are almost out of money. Sounds more sensible in California.

 

[brucethebroker]

I mean, if someone is in their 80s and penniless, would society really let them just die in their home? Does it depend on where you live and what kinds of social services are available there?

Trust me, you won't die in your home if you run out of money...it will be sold at the first tax sale once you are "penniless"/unable to pay property tax, and you will be evicted. Then you will either be homeless or move in with relatives.

 

[ejman]

I mean, if someone is in their 80s and penniless, would society really let them just die in their home? Does it depend on where you live and what kinds of social services are available there?


Trust me, you won't die in your home if you run out of money...it will be sold at the first tax sale once you are "penniless"/unable to pay property tax, and you will be evicted. Then you will either be homeless or move in with relatives.

It depends. In the Socialist Peoples Republic of Oregon a senior can have an income of up to $44k a year and a NW of up to $500k and still qualify for a program that pays one's property taxes by placing a lien against the home.
https://www.oregon.gov/DOR/forms/FormsPubs/deferral-disabled-senior_490-015.pdf

 

[rubytuesday]

Here you can’t apply until you are almost out of money. Sounds more sensible in California.

An example: a beautiful subsidized housing in LA (which I am eyeballing 52 years ahead of time, for an unlikely scenario of living longer than 110, the age at which I might become a low-income senior accepts applications from seniors who earn up to $37,860/yr. That is not a tremendous money, but it is much better than nothing, ie, one can manage on that in the market-rate world for 3 years while waiting for a vacancy at this subsidized housing. A single person earning $37,860/yr would pay $931 per month to rent a studio at this housing, which is about one half of market average for a small studio in a nice but not luxurious area of LA.

 

[daylatedollarshort]

There are 57K homeless people in LA county, more than 4K elderly. If these socials safety nets and low income housing exist, it sure doesn't mesh with the reality we see around us in California.

 

[rubytuesday]

There are 57K homeless people in LA county, more than 4K elderly. If these socials safety nets and low income housing exist, it sure doesn't mesh with the reality we see around us in California.

Aha... while there is a maximum income (just under $38k) that qualifies a low-income senior for this particular housing that I am talking about, there is also a minimum income one must have to qualify for this housing. I don't know how low that minimum income is, but it is not zero. In other words, this housing is available to people who earned their SS retirement benefits with more than 10 years of work, but may not have any other source of retirement funds except SS. I am not sure what social security net might exist for people who have not worked enough to qualify for SS retirement benefits, or maybe have never worked at all (due to, say, a mental illness, or generational welfare, or some other reason). I suspect the majority of the homeless (including the elderly homeless) are outside the regular SS system for working people. I don't know what kind of social safety net exists for them.

 

[Ally]

If we totally ran out of money, my daughter and son-in-law plan that we can move into their guest suite any time we want. Not sure if we ever will, but they built it as part of their home with us in mind. It’s accessible for wheel chairs and with all kinds of aging in place features. We stay in it when we visit, but we’d have to be broke or pretty sick to move in.

 

[Koolau]

I hope this is the right place to post this question.

I'm wondering--what would happen to someone who literally ran out of money before they died?

I mean, if someone is in their 80s and penniless, would society really let them just die in their home? Does it depend on where you live and what kinds of social services are available there?

Does anybody actually know anybody who ran out of money after they retired because they didn't save enough?

This isn't meant as a stupid question, or a heartless one--just an honest one.

Most of the folks here (ER Forum) have planned pretty well and it seems unlikely that many of us would find ourselves in the "out of money" situation EXCEPT for what we call "Black Swans."

I've worried about run-away inflation, but there are few defenses for this. "Normal" inflation can be handled by choosing a prudent AA. But hyperinflation isn't something any of us can picture, let alone plan for. So, I've kind of given up on worrying about inflation.

A Black Swan that I DO still worry about is the situation when one or (worse) both DW and I end up in a skilled nursing facility. At $10K/month, each, even significant savings would be rapidly depleted. My understanding is that Medicade would kick in at some point, but that would put us completely at the "mercy" of the state (so to speak.)

Mostly, I don't worry too much about any of this. We've saved and planned, so I guess it's in "God's hands." Still, I have to admit that this subject crosses my mind from time to time. YMMV

 

[Huston55]

Most of the folks here (ER Forum) have planned pretty well and it seems unlikely that many of us would find ourselves in the "out of money" situation EXCEPT for what we call "Black Swans."

I've worried about run-away inflation, but there are few defenses for this. "Normal" inflation can be handled by choosing a prudent AA. But hyperinflation isn't something any of us can picture, let alone plan for. So, I've kind of given up on worrying about inflation.

A Black Swan that I DO still worry about is the situation when one or (worse) both DW and I end up in a skilled nursing facility. At $10K/month, each, even significant savings would be rapidly depleted. My understanding is that Medicade would kick in at some point, but that would put us completely at the "mercy" of the state (so to speak.)

Mostly, I don't worry too much about any of this. We've saved and planned, so I guess it's in "God's hands." Still, I have to admit that this subject crosses my mind from time to time. YMMV

K-

While I understand your worry about the need/cost for skilled nursing facility (SNF) care [we share that concern], it’s technically not a ‘Black Swan’ because, it’s a known event for which we can plan.

https://en.m.wikipedia.org/wiki/Black_swan_theory

If SNF (or double SNF) is an existential threat to your FIRE, you may want to consider a CCRC; see thread below.

http://www.early-retirement.org/forums/f47/ccrc-reference-material-faqs-86124.html

Another option would be to enter a SNF (when needed) which will accept Medicaid after you’ve depleted your savings, and allow you and/or DW to remain.

ETA: A little perusing of the Interwebs reveals ~50 CCRCs in Hawaii (most on Oahu), some with Life Care contracts, and many with licensed Medicaid beds.

 

[athena53]

I suspect the majority of the homeless (including the elderly homeless) are outside the regular SS system for working people. I don't know what kind of social safety net exists for them.

A couple of women on the Widows/Widowers Board I frequent were saying that they worked off the books to save on taxes. Ack! I did point out that without 40 quarters of work (or a qualifying marriage) they may not get SS and may have to pay for Medicare A. My mother had a friend whose marriages were too brief (ended in divorce) and didn't have enough work on her own record to qualify, having done a lot of work off the books. She thought she was going to be able to collect SS at 62.

 

[bmcgonig]

If we totally ran out of money, my daughter and son-in-law plan that we can move into their guest suite any time we want. Not sure if we ever will, but they built it as part of their home with us in mind. It’s accessible for wheel chairs and with all kinds of aging in place features. We stay in it when we visit, but we’d have to be broke or pretty sick to move in.

Really nice to know you have good kids that have your back like that. Congratulations.

 

[Niuatoputapu]

In real life, a prudent person will monitor his financial situation and make mid-course adjustment before it's too late.

+1

With SS as a floor, and children as an ultimate safety net, I am more concerned about other things (physical and mental well-being, for example) than living on "just SS".

 

[Chuckanut]

A couple of women on the Widows/Widowers Board I frequent were saying that they worked off the books to save on taxes. Ack! I did point out that without 40 quarters of work (or a qualifying marriage) they may not get SS and may have to pay for Medicare A. My mother had a friend whose marriages were too brief (ended in divorce) and didn't have enough work on her own record to qualify, having done a lot of work off the books. She thought she was going to be able to collect SS at 62.

An excellent point!

I know of several people who have been gobsmacked by that little trap when they found out the size of their SS check. From what I can tell their tax 'savings' went for motor-homes, boats and very fancy household furnishings.

 

[aja8888]

There are 57K homeless people in LA county, more than 4K elderly. If these socials safety nets and low income housing exist, it sure doesn't mesh with the reality we see around us in California.

When i worked in downtown LA years ago, I met many homeless during our lunch hour walks. It's a good place to be homeless as panhandling (begging) pays well, and purses were easy to snatch. Plus, the park areas are inviting. Many of the homeless in LA are transitory and come from colder climates when the weather is bad for them.

They used to ask us walkers for quarters back then, but by now it's probably a dollar due to inflation.

Also, all day parking back then was $1.00 in the remote lots so it didn't cost the homeless a lot. Now, many of those lots have been developed and they probably park farther out and take a bus into town.

 

[razztazz]

When i worked in downtown LA years ago, I met many homeless during our lunch hour walks. It's a good place to be homeless as panhandling (begging) pays well, and purses were easy to snatch. Plus, the park areas are inviting. Many of the homeless in LA are transitory and come from colder climates when the weather is bad for them.

They used to ask us walkers for quarters back then, but by now it's probably a dollar due to inflation.

Also, all day parking back then was $1.00 in the remote lots so it didn't cost the homeless a lot. Now, many of those lots have been developed and they probably park farther out and take a bus into town.

Sounds very entrepreneurial and pro small-government

 

[aja8888]

Sounds very entrepreneurial and pro small-government

I often thought the homeless in LA had the best of all worlds: Easy, tax free money (and goods!), great weather, flexible hours, no crisis workloads, and the ability to meet new friends.