retiring without saving

[NW-Bound]

My MIL retired with a teacher’s pension, SS, and a small nest egg. She has actually added to her savings during retirement as she doesn’t spend all of her income. She rents a small cottage that she loves, surrounded by nature, and lives a simple lifestyle. She thinks she is wealthy because she buys anything she wants for herself, plus she gives her grandkids and one of her sons a fair bit of money every year.

She does not receive any social services and is on traditional Medicare with private supplemental insurance. Her healthcare costs are minimal.

The key is being happy with what one has. DH and I would not want to live on her income, but for her, it’s more than adequate and she has never withdrawn a dime from her nest egg since retiring.

"It's just as easy to live well when you're poor as when you're rich - but when you're poor, it's much cheaper." -- Andrew Tobias

Caveat: Tobias talks about being poor. If you are broke and homeless, you are way beyond poor.

 

[Samsung4321]

Australia, retire without savings:

Without owning home is 'tight' but doable depending on rent minus rental assistance.

Owning home has typically provided additional ~7% capital gains.

Full Age Pension (non-contributary, no employment history, means and residency tested):
Single: 26 * 1026.50 = $A26,689 / y. CoL ~$A18,000 / y.
Couple: 26 * 1547.60 = $A40,237.60 / y. CoL ~$A25,000 / y.

All income tax free. Property tax ~$A2,500 / y. 10% Goods & Services Tax except on food, water. Free Doctor, bus, ...

Plenty left for indulgences.

 

[marion10]

If he was on SS disability couldn't he also get VA disability? That can be worth a lot.

VA Disability has to be service connected.

 

[cyber888]

I know someone who has no savings, but has SS and SSI. Salary is about $850-$900/mo. But she was lucky to find subsidize housing for $200/mo in CA, and I think some utility is included like TV. The remaining $650-$700 for food, public transport, and some entertainment. I think she has Medicaid for free.

 

[old medic]

But...you have to check your zip code.

It could be DYNO-MITE.

 

[kongmen]

she had to cash in her pension plan to make it to SS at age 62.
.

Please don't take this the wrong way but did she find another job during this period or remain unemployed? The reason I ask is because she would have been relatively young and possibly could have kept her pension intact.

 

[livingalmostlarge]

I didn't understand why the adjunct professor made $28k but didn't her husband work? And why they weren't working two jobs each to be able to find housing if they didn't want to leave the expensive area?

 

[razztazz]

I didn't understand why the adjunct professor made $28k but didn't her husband work? And why they weren't working two jobs each to be able to find housing if they didn't want to leave the expensive area?

Because then her situation wouldn't have sounded so forlorn so they left those details out

 

[ncbill]

Please don't take this the wrong way but did she find another job during this period or remain unemployed? The reason I ask is because she would have been relatively young and possibly could have kept her pension intact.

IT worker outsourced not long before the Great Recession.

No one was hiring over-age-60 IT workers back then, as hard as she tried.

Not even for help desk positions which would have paid maybe a third of her previous salary.

 

[jazz4cash]

Did 1st husband make his 20 in the service? If so, the only way she wouldn't get his military pension is if she willing signed it away.

A lot of caveats. She would get up to 55% (not 100%) of his retirement pay, unless they agreed to less (there is a cost for this benefit, and some couples prefer money now to possible money later). And if the retired service member had an ex spouse while he served who has higher priority, that spouse might get the pension instead of the current spouse.

Sorry I lost track of this thread and missed these followup comments. I don't know how long 1st husband served. I think her settlement from the divorce was a home in a LCOL area but she let that go below market and probable put proceeds into the new home with 2nd husband. That home ended in a short sale. She has children that are vets so I believe they would know if she was entitled to additional military benefit

 

[F.I.R.E User]

Excess alcohol consumption is a great way to kill yourself slowly.

Saw that with the last guy I worked for in the corporate world who died a few years ago.

He bled out internally from a simple fall, despite emergency surgery.

Not that surprising since the liver is key in producing clotting factors.

Died ~15 years earlier than his life expectancy after just a few years retired.

It is.

 

[artsy-B]

i don't think he benefited by running a section 8 property, it's the occupants that he mentioned benefited (by abusing the gov system). Rents he charged are controlled by the government.

My wife ran one of these properties when she was working for a fee managed concern that owned section 8 properties. The amount of government subsidy abuse by those residents is mind boggling. Taxpayer funded, of course.

PLEASE, these small amounts that you moan about DWARF Corporate Welfare payments. Please-"mind-boggling" is relative. Go after Corporate Welfare before you start beating up on the little people. https://www.cato.org/commentary/corporate-welfare-lives

https://www.aier.org/article/corporate-welfare-wheres-the-outrage-a-review/

 

[aaronc879]

One has to prove the disability was service related. And sometimes that's not easy to do many years later. That may not be his particular situation, though.

I applied for a hearing loss disability from what I believe was incurred during my war years (1964 - 1968) from exposure to many and frequent "loud noises". Many G.I.'s got the approval for the issue but I waited way too long to apply and couldn't make it work.

My Dad got his tinnitus approved when he was in his mid 60's. Also believed to have been caused by his time in Vietnam. He was already on VA disability for other issues so maybe that makes it easier.

 

[aaronc879]

Yet there are many homeless folks around our country. I guess the west coast is pretty bad right now......

Many of the homeless have physical or mental issues and no advocate to help them get on top of benefits available.

First step is move out of paradise. You don't get to live in coastal Southern California if you can't afford it.

 

[youbet]

First step is move out of paradise. You don't get to live in coastal Southern California if you can't afford it.

The homeless are drawn there because of the favorable weather for homeless living and there is an established culture of homelessness to participate in.

 

[daylatedollarshort]

The homeless are drawn there because of the favorable weather for homeless living and there is an established culture of homelessness to participate in.

Politifact says: "Myth #1: California’s homeless are from somewhere else -- and moved here for the mild weather and social services...Martin cited a study from May 2018 by the Los Angeles Homeless Services Authority, which found 75 percent of the people on the street in Los Angeles County had a home in that same county before they lost it. It also showed that 65 percent of the unsheltered homeless had lived in that county for at least 20 years. Only 13 percent were from out of state." - https://www.politifact.com/article/2018/jun/28/dispelling-myths-about-californias-homeless/

 

[youbet]

Politifact says: "Myth #1: California’s homeless are from somewhere else -- and moved here for the mild weather and social services...Martin cited a study from May 2018 by the Los Angeles Homeless Services Authority, which found 75 percent of the people on the street in Los Angeles County had a home in that same county before they lost it. It also showed that 65 percent of the unsheltered homeless had lived in that county for at least 20 years. Only 13 percent were from out of state." - https://www.politifact.com/article/2018/jun/28/dispelling-myths-about-californias-homeless/

Interesting stuff daylate......... Here in Chicago, every winter we are bombarded with emergency requests for charitable contributions to help the homeless who are literally freezing to death or are being packed into shelters like sardines just to prevent death by frostbite, etc. So, it's easy to fall for media information implying that homeless folks are moving to warmer climtes when they have the opportunity. Heck, DW and I have spent the last few winters in Florida ourselves!

I thought the most informative paragraph in the whole article was:

CLARIFICATION: We received feedback on our analysis of Myth #2. To clarify, our research shows there is, indeed, a significant percentage of homeless individuals who have a substance abuse disorder and/or a mental illness.

Pretty much as I thought it was.

Looks like California has a lot of work to do. Thanks for bringing the Politifact point of view up.