What If You Run Out of Money?

[Teacher Terry]

Having spent my career in human services some states are better than others in providing services. Nevada has low taxes and crappy services. We have people freeze to death in the winter. Many services have long waiting lists. Rents have skyrocketed so some are newly homeless or spent all their money on rent and can’t afford food or medication. Many of these people depend on soup kitchens and food pantries to eat. The weekly motels have been ripped down for upscale places further aggravating the problem.

 

[NW-Bound]

Every time we think we have a plan set in stone, [-]we discover another wrinkle, or revisit previous thinking[/-]

they change the law to reduce the benefits for late comers.

FIFY

 

[joeea]

She didn't travel much.

She never got into some of the more modern things (she had no internet, no cable TV, no dishwasher).

she just didn't have a lot of hobbies that cost money and didn't go out much

I guess if you are flexible enough in how you use the word, subsistence living can be called "fun".

I suspect most folks wouldn't use that term.

 

[Retired Expat]

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.

Seems to me that if a person suddenly ran out of money they were not paying attention at all. If you reevaluate your plan and your spending regularly and are reading sites like this and doing retirement planning you should never “simply run out”. You would be cutting back years before, going back to work if still able, etc

I RE at 52 and could see that my plan would not work without serious spending adjustment. Moved to another country, gave up on restaurants and learned to cook, simply stopped spending money like I used to. In 8 years have doubled my retirement fund and now enjoying the heck out of my life and truly am FI and RE

 

[athena53]

I guess if you are flexible enough in how you use the word, subsistence living can be called "fun".

I suspect most folks wouldn't use that term.

She sounds like a lady who shared our LBYM values and was happy with the inexpensive things in life.

My concern about living at that level, even putting away $5,000/year, is how easily it could have been wiped out by LTC, a roof replacement, needing expensive dental work, needing paid help to support her in the home, etc. At 97 was she still driving? Who cleaned her house and mowed her lawn? My great-grandmother was still living in her home at age 93 but I think she had a lot of support on the logistical stuff (not sure about money) from her daughter.

I couldn't cut it that close.

 

[Katsmeow]

I guess if you are flexible enough in how you use the word, subsistence living can be called "fun".

I suspect most folks wouldn't use that term.

You don't get it. You really don't. It wasn't subsistence living. She didn't hesitate to spend money when she wanted to. The things she liked to do were mostly at home. She was always frugal. She didn't spend just to spend. She spent less the last 10 years of her life probably than earlier because she was more limited in physically what she could do in terms of going places (she was a widow). But in later life she did spend money for things she wouldn't have spent money for before. She had someone come in and house clean and hired someone to do the yard, for example.

She would be insulted to have someone call her life subsistence living or to question whether it was fun. She liked her life. She did everything she wanted to do. She just didn't have tastes for lots of "things." Her house was small, but she loved it. If she wanted to go out to eat, she did. If she wanted to buy a particular thing she bought it.

She had enough money to have had internet or cable TV or a dishwasher. But -- she didn't want them. She grew up without them and lived most of her life without them being available so she didn't miss them.

 

[athena53]

She would be insulted to have someone call her life subsistence living or to question whether it was fun. She liked her life. She did everything she wanted to do. She just didn't have tastes for lots of "things." Her house was small, but she loved it. If she wanted to go out to eat, she did. If she wanted to buy a particular thing she bought it.

I think she would have found kindred spirits here among some of the people here who ERd with modest investment portfolios but a paid-for house and who enjoy the public library, free concerts, walks in the woods and other free or inexpensive pleasures.

I'm glad she had the means to get help with the house and the yard- I know i'll want that eventually but right now I'm "only" 65 so it's all exercise.

 

[marko]

You don't get it. You really don't. It wasn't subsistence living. She didn't hesitate to spend money when she wanted to. The things she liked to do were mostly at home. She was always frugal. She didn't spend just to spend. She spent less the last 10 years of her life probably than earlier because she was more limited in physically what she could do in terms of going places (she was a widow). But in later life she did spend money for things she wouldn't have spent money for before. She had someone come in and house clean and hired someone to do the yard, for example.

She would be insulted to have someone call her life subsistence living or to question whether it was fun. She liked her life. She did everything she wanted to do. She just didn't have tastes for lots of "things." Her house was small, but she loved it. If she wanted to go out to eat, she did. If she wanted to buy a particular thing she bought it.

She had enough money to have had internet or cable TV or a dishwasher. But -- she didn't want them. She grew up without them and lived most of her life without them being available so she didn't miss them.

I get it.
We have some folks in these parts who live like that. Usually trust funded 'artists' who live a fairly simple life in some small cubby overlooking the ocean or something. Usually a small converted shack/garage, nicely done with lots of flowers and whimsical stuff in the yard. For some reason, an ancient MG convertible seems to be the car of choice (green)

If you saw them on the street you might mistake them for homeless or some sort of eccentric wanderer (until you find out they're worth $10MM and the family name is on every other plaque in Boston).

They just march to a different drummer and have the wherewithal to do as they please.

 

[gauss]

Uh, Marko,

My Father lived on SS (claimed at I believe 62) plus ~ $400 non-Cola pension. He lived in a nice suburban condo. He was active in chuch social clubs. traveled with them internationally, and was a avid ballroom dancer. He was very well dressed, well groomed and had no trouble attracting the ladies.

Although he had a mortgage outstanding on his condo, I inherited ~ a net $50,000 in assets when he passed away at age 83.

He grew up in a somewhat poor family and hated that lifestyle. He hated driving the bus. He married out of his socio-economic class etc.

I am sure he would take rightful offense if someone mistakened him for homeless.

That all being said, he would have liked to have more money, but he was able to live within his means in quite a dignified fashion.

-gauss

 

[ER Eddie]

We really focus on money far too much in this forum (I include myself in that criticism). We forget that many people throughout history have lived perfectly happy, contented, and fulfilling lives without the things we take as "necessities," such as cable TV, the internet, or a dishwasher. Doing without those things is not impoverished living. It's simple living, which is something advocated by any number of sages. She may well have been better off with fewer distractions and possessions ("the more you possess, the more you are possessed"). That's certainly how she felt about it.

Although you'll have to pry the internet from my cold, dead fingers before I give that up... Even that, though, is understandable for someone of her generation. She'd lived happily without it for most of her life. She must've thought, why bother.

Anyhow, let's be careful not to apply the materialistic/money-focused mindset so prevalent here to other people. Not everyone has the desire to amass millions and have a "fat" retirement or whatever they call it. I kind of admire the people who go the other way.

 

[SoReadyToRetire]

But if that person has any pension, social security, annuities they are never really penniless, just overspending.
.
.
.
But let's be honest, you don't need to use an example of 80 something who "runs out of money", there are many today who are essentially "penniless". It should then be obvious as to what social programs are available for those who do not have the means to live a minimum lifestyle.

My mom only gets $50 from SS after Medicare costs are deducted! So you can't depend on that to live on.

I know there are a lot of people out there struggling--didn't imply otherwise. But I think it'd be much harder to survive at 80+ than at younger ages ...

 

[marko]

Uh, Marko,

My Father lived on SS (claimed at I believe 62) plus ~ $400 non-Cola pension. He lived in a nice suburban condo. He was active in chuch social clubs. traveled with them internationally, and was a avid ballroom dancer. He was very well dressed, well groomed and had no trouble attracting the ladies.

Although he had a mortgage outstanding on his condo, I inherited ~ a net $50,000 in assets when he passed away at age 83.

He grew up in a somewhat poor family and hated that lifestyle. He hated driving the bus. He married out of his socio-economic class etc.

I am sure he would take rightful offense if someone mistakened him for homeless.

That all being said, he would have liked to have more money, but he was able to live within his means in quite a dignified fashion.

-gauss

Not sure what your point is.

My comment was in reference to a lady that Katsmeow knew who lived quite simply in a small house with few appliances and seemed very happy with it all.

I was reinforcing that lifestyle with my own personal experience of people who, at first glance might be mistaken for being on their uppers but when you dig beneath find them to be quite wealthy and just living their own dream in their own way.

Wasn't intended as a rap against the homeless or folks of lesser means it's just that sometimes looks can be deceiving, which is what I believe Katsmeow was trying to convey. Her friend was living a lifestyle that some might consider poverty; in fact the friend was happy, had money and just spent it differently.

 

[daylatedollarshort]

We really focus on money far too much in this forum (I include myself in that criticism). We forget that many people throughout history have lived perfectly happy, contented, and fulfilling lives without the things we take as "necessities," such as cable TV, the internet, or a dishwasher. Doing without those things is not impoverished living. It's simple living, which is something advocated by any number of sages. She may well have been better off with fewer distractions and possessions ("the more you possess, the more you are possessed"). That's certainly how she felt about it.

These people are a good example: 12 X 12 cabin, no electricity, one pot for cooking, all by choice -

 

[gauss]

Marko - No worries, but to clarify the confusion.

Katsmeow described her late mother as having about $1,500/month to live on and not unhappy with her life. She said that her mother would have taken offense at anyone referring to her lifestyle as subsistence living.

I see my Father in the same way.

You said that you "get it" because you know what appear to be independent wealthy people who choose to live a lifestyle where they appear to be homeless.

I think that is a very different scenario (perhaps the polar opposite) of what Katsmeow and I were describing.

I guess my post was intended to be supportive of katsmeow in that I saw my Dad in a similar light.

-gauss

 

[street]

We really focus on money far too much in this forum (I include myself in that criticism). We forget that many people throughout history have lived perfectly happy, contented, and fulfilling lives without the things we take as "necessities," such as cable TV, the internet, or a dishwasher. Doing without those things is not impoverished living. It's simple living, which is something advocated by any number of sages. She may well have been better off with fewer distractions and possessions ("the more you possess, the more you are possessed"). That's certainly how she felt about it.

Although you'll have to pry the internet from my cold, dead fingers before I give that up... Even that, though, is understandable for someone of her generation. She'd lived happily without it for most of her life. She must've thought, why bother.

Anyhow, let's be careful not to apply the materialistic/money-focused mindset so prevalent here to other people. Not everyone has the desire to amass millions and have a "fat" retirement or whatever they call it. I kind of admire the people who go the other way.

Very well said, thank you!

 

[Teacher Terry]

I totally get it. My mom did the things she wanted to and traveled while she could. We encouraged her to spend her money while heathy since you are not taking it with you. She had enough money on a daily basis to eat out, go to movies, etc. She loved going to 2 different senior centers where they had interesting guest speakers and lunch. She owned good clothes that lasted a long time. Because she made crafts to sell that filled a lot of her time.

 

[street]

Sure, why do the research yourself when you can just question my assertion? Here you go. Oh, and don't forget, some people work hard for low pay until 65 and are lucky to retire with low to mid six digits.

Sky-High Deductibles Broke the U.S. Health Insurance System

Insured, but Bankrupted Anyway (short, but contains a couple of good sources)

Even With Insurance, Americans Can't Afford Their Medical Bills

The Cosmic Avenger >>> you will learn to try to ignore him. He is the smartest person on this site so the best is let him do his thing don't let him bully you like I have seen him bully other. Have fun this it is a great place.

 

[daylatedollarshort]

I think she would have found kindred spirits here among some of the people here who ERd with modest investment portfolios but a paid-for house and who enjoy the public library, free concerts, walks in the woods and other free or inexpensive pleasures.

Even among the very wealthy, one of the The Millionaire Next Door authors found many millionaires to be cheap dates: "When people ask me about the activities of millionaires, I have a short answer..... the typical millionaire is, in three words, “a cheap date!” Yes, a cheap date even among a fraction of the top 1% of the wealth holders in America. Many of the favorite activities of millionaires are not at all costly. It matters not if you are rich or poor, the best things in life are free or close to it."

 

[marko]

Marko - No worries, but to clarify the confusion.

You said that you "get it" because you know what appear to be independent wealthy people who choose to live a lifestyle where they appear to be homeless.

Ok. Cool. I think we were both trying to support Kat's point (she was getting some blow-back) but I may have misinterpreted some of the details.

My homeless comment was only about how they were dressed and physical appearance not their lifestyle itself.
Their homes, while very modest and lack many amenities would still be in the high six figures.

I was trying to describe the 'town characters' who, when hopping into their perfectly restored antique car quickly dispel any thoughts of neediness despite the fact they are wearing flip flops in the snow and maybe haven't bathed in a while.

I was sort of lumping Kats mom into that group of folks who happily do their own thing despite their resources.

 

[gauss]

^ Agreed! Thanks for the followup.
-gauss

 

[Live And Learn]

And some of us already lead rather simple lives and need to plan for 100% to age 100 because we don't have too much fluff in the budget.

 

[NW-Bound]

... I was trying to describe the 'town characters' who, when hopping into their perfectly restored antique car quickly dispel any thoughts of neediness despite the fact they are wearing flip flops in the snow and maybe haven't bathed in a while.

I was sort of lumping Kats mom into that group of folks who happily do their own thing despite their resources.

That's quite bad!

I am tempted to post a video interview with a homeless person, where she repeatedly wished for access to a public shower. Hard to understand multi-millionaires who do not appreciate hygiene as much as a homeless person does.

 

[marko]

That's quite bad!

I am tempted to post a video interview with a homeless person, where she repeatedly wished for access to a public shower. Hard to understand multi-millionaires who do not appreciate hygiene as much as a homeless person does.

We try not to judge around here.

 

[Scuba]

FIRECalc assumes that you spend a constant amount each year until you go broke and die at the same time.

In real life, a prudent person will monitor his financial situation and make mid-course adjustment before it's too late. This of course requires that there's still some room to make a reduction in living standards. If you start out retirement barely scratching by, then it will not be pretty.

Exactly. Most of the retirement calculators work this way, whereas in real life most people would cut their discretionary spending.

Our backup plan is:
1. Reverse mortgage, or
2. Sell our beachfront home and move to a less expensive location within the same area
3. Same as #2 except move out of state to a cheaper location
4. If things get really bad, move to another country where COL is much less (this is a remote possibility but something we would consider before we’d become homeless on the street)

 

[mountainsoft]

some of us already lead rather simple lives and need to plan for 100% to age 100 because we don't have too much fluff in the budget.

+1

We live rather simple now and don't have a lot of extras we can give up once we retire. So we have to be 100% sure (or least in the upper 90's) that we'll be able to make it once we cut the employment cord. I'm probably over cautious, but better safe than sorry.