$200K/ yr income, 58 yrs old and no retirement savings

[ScaredtoQuit]

How is this possible? My mind can't even comprehend how you could get yourself into such a jam.

https://finance.yahoo.com/news/im-58-no-retirement-savings-143318388.html

 

[Walt34]

I have relatives who never came close to $200k/year. On a good year they might have made $50k. And they've spent every nickel of it.

 

[jollystomper]

That is closer to the norm than where many of us on this forum are.


Edited to add: Also, look at the reasons he listed - it only takes 1 or 2 of those to drains one savings (if one was saving in the first place).

 

[JoeWras]

Two of my old co-w*rkers who were early employees of my megacorp, and had massive stock options, both retired in their 40s.

They both lost most of it on different business failures.

They are now back at work at different companies.

For the life of me, I'm not sure why some retirees decide to invest such large sums of money on businesses they may not even like that much (service, restaurants).

 

[ExFlyBoy5]

I was referred a case from Legal Aid for a "low income" bankruptcy. Well, they didn't screen the client very well because they have an income of $160K+ a year. No savings at all, but over $200K in credit card debt and over $10K in cell phone bill collections. Thankfully, since they weren't forthcoming with the truth, Legal Aid (and that means "I") won't be helping them.

The amount of $$$ people spend is absolutely amazing to me.

 

[Jerry1]

From the article:

In a perfect world, you start living on $5,200/month right now, and this whole thing is done. If your projected retirement income (including the changes detailed above) is going to equal $5,200/month, then just start living on that now and save the rest, cold turkey. But, as you likely know, that’s much easier said than done.

He needs to realize that it will be a lot easier to live on $5,200/month now than it will be to live on SS and no savings at 70. He won't early retire, but the more he can do now the better off he'll be.

As for how does this happen? As said in the article, divorce and business failure. I'm sure those were big hits, but my presumption is that he also spent a lot on money along the way and didn't save any money or have the habit of saving money. It's going to be real hard to turn that habit around.

 

[HI Bill]

I'm going with homo sapien's myopia. Easier, and more fun to spend now, than save for later. I'm too much of a wuss to do that. I don't like debt. I like options.

 

[travelover]

Be careful of potential arm strain patting ourselves on the back.

 

[HI Bill]

Be careful of potential arm strain patting ourselves on the back.

LOL. I tried giving a retirement planning talk at the office. Only one person came up to me to ask questions later. Most felt their situations were hopeless. One 68-year old taking in $250K plus, said he didn't know whether he could afford to retire in Hawaii (and he has a government pension, on top of eventual SS, and his current salary).

I talked to one peer, and she said her husband doesn't want to lower his standard of living.

LBYMs isn't a strategy that seems to resonate. I talked to one new employee, who had retired from the Federal governemnt, then the private sector, and came back to the private sector at my company. He was bored, but he seemed shocked that I was planning to RE in a couple of months.

Patting ourselves on the back, or just being incredulous at people's lack of foresight? Every day at lunch time, I walk past the 60-70 year olds still coming to downtown, still w$rking in an office, and I wonder how many of them really need to, or how many could have FIRED.

 

[NW-Bound]

Be careful of potential arm strain patting ourselves on the back.

Easily avoided if I pat your back, and then you reciprocate.

 

[Walt34]

Patting ourselves on the back, or just being incredulous at people's lack of foresight?

This is the case, at least for me. For example, I completely fail to comprehend how someone cannot plan ahead for something as essential, inevitable, and readily foreseeable for something like a new roof.

They think the current one is going to last forever maybe?

They think they're immortal? That they'll never get seriously sick or injured? That what happened to their parents and their friend's parents cannot happen to them?

I just don't get it.

 

[Lawrencewendall]

LOL. I tried giving a retirement planning talk at the office. Only one person came up to me to ask questions later. Most felt their situations were hopeless. One 68-year old taking in $250K plus, said he didn't know whether he could afford to retire in Hawaii (and he has a government pension, on top of eventual SS, and his current salary).

I talked to one peer, and she said her husband doesn't want to lower his standard of living.

LBYMs isn't a strategy that seems to resonate. I talked to one new employee, who had retired from the Federal governemnt, then the private sector, and came back to the private sector at my company. He was bored, but he seemed shocked that I was planning to RE in a couple of months.

Patting ourselves on the back, or just being incredulous at people's lack of foresight? Every day at lunch time, I walk past the 60-70 year olds still coming to downtown, still w$rking in an office, and I wonder how many of them really need to, or how many could have FIRED.

I did the same (investing spiel) at a family reunion. Of the 30+ Nieces and Nephews at the reunion, only 4 showed up.

Little background: I'm the youngest of 10 and retired at 54. I figured my siblings were too set in their ways but figured my Nieces and Nephews would be interested in how I pulled it off. Nope.

 

[NW-Bound]

They think they're immortal? That they'll never get seriously sick or injured? That what happened to their parents and their friend's parents cannot happen to them?

I read a book by Andy Grove, former CEO of Intel. The title was "Only the Paranoid Survive".

The subject was business survival, but perhaps the title applies to personal financial matters as well.

 

[Gumby]

This is the case, at least for me. For example, I completely fail to comprehend how someone cannot plan ahead for something as essential, inevitable, and readily foreseeable for something like a new roof.

They think the current one is going to last forever maybe?

They think they're immortal? That they'll never get seriously sick or injured? That what happened to their parents and their friend's parents cannot happen to them?

I just don't get it.

"Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself. Sufficient unto the day is the evil thereof."

- Matthew 6:34 (KJV)


"After all, tomorrow is another day."

- Scarlett O'Hara in Gone With the Wind

 

[Dtail]

LOL. I tried giving a retirement planning talk at the office. Only one person came up to me to ask questions later. Most felt their situations were hopeless. One 68-year old taking in $250K plus, said he didn't know whether he could afford to retire in Hawaii (and he has a government pension, on top of eventual SS, and his current salary).

I talked to one peer, and she said her husband doesn't want to lower his standard of living.

LBYMs isn't a strategy that seems to resonate. I talked to one new employee, who had retired from the Federal governemnt, then the private sector, and came back to the private sector at my company. He was bored, but he seemed shocked that I was planning to RE in a couple of months.

Patting ourselves on the back, or just being incredulous at people's lack of foresight? Every day at lunch time, I walk past the 60-70 year olds still coming to downtown, still w$rking in an office, and I wonder how many of them really need to, or how many could have FIRED.

OTOH, those older folks are lucky to have a job past 60 y.o.
In my former office of 400+, there was not one worker past 60 y.o.

 

[aaronc879]

I have relatives who never came close to $200k/year. On a good year they might have made $50k. And they've spent every nickel of it.

There are all types. I have never even made $50K in any one year in my life. My average income after 20 years of working is probably a little under $30K/yr yet I have still managed to save a few hundred K by LBYM. Zero inheritance and never received any gift beyond low three figures. No big real estate gains
just living frugal and saving what I could starting in my early 20's.

 

[ut2sua]

I think many folks finds themselves in similar situation as the person in this article. There are lots of potholes waiting for one in life: drug, gambling, divorces, over-spending, bad investments etc. And then there are the unusual ones that could hit such as selling and donating your house to some religious guru etc. etc.
I am trying to educate my kids to spot and avoid these potholes, but it will always be difficult because all kids are inexperience in life. To get to the stage that you can FIRE, it take a lot of good calls to get there. It is similar to going through college, it seems not that difficult, but it takes a lot of hard work, and tons of motivation to get to the final goal (of graduation).

 

[Bigdawg]

regarding the whole patting ourselves on the back thing: Of course I am lucky. But, I work with 100's of people who are just as lucky as I am (healthy, no divorce, etc...) who are not even close to FIRE. Am I "lucky" because I max out my 401K and invest in mostly SP500? Am I lucky that my truck is 20 years old and I haven't had a payment since I bought it used 8 years ago?

 

[MRG]

I've seen it done time and time again. A former cow*rker gave me a very unusual look when I retired at 56. He and his wife were both making 6 figures, no kids, drugs.. They had a lot of nice things but not much for retirement.

Another guy was still doing 60-80 hour weeks doing hardware maintenance, he claimed he loved it at 75. He'd retired twice before but went back to work because he couldn't manage money. Worked all weekend during the night. I spent a weekend with him, hardware sucks eggs. Another guy told me he had accidentally stepped on his DW'S elderly dog sending it to an early demise, and he was hiding in the data center. [emoji848]

My buddy had no retirement plan after he divorced the same woman the second time. His plan is to keep slinging code, as long as it's assembly.

 

[HI Bill]

regarding the whole patting ourselves on the back thing: Of course I am lucky. But, I work with 100's of people who are just as lucky as I am (healthy, no divorce, etc...) who are not even close to FIRE. Am I "lucky" because I max out my 401K and invest in mostly SP500? Am I lucky that my truck is 20 years old and I haven't had a payment since I bought it used 8 years ago?

+1. I feel lucky every day. But like you, I've also made choices that have put me years, if not decades ahead of similar Americans with similar salaries, educations, and and opportunities. Maybe they enjoyed better houses, vacations, cars, etc., than I did, and maybe that's what's more important to them than FIRE. Or maybe they just didn't think about it or plan... On this forum, we see younger folks all the time struggling with the decision about how much to save. See my tag line.

 

[Cassius King]

And I think we should pat ourselves on the back and recognize our hard LBYM work.
While most of us were focused on saving and LBYM, the others were spending everything they made. Enjoying new cars, McMansions, extravagant vacations, etc. So, yes, the harder thing to do was LBYM and save, and we deserve the benefits of doing so. Were these people worried about anyone else while living the high life?

 

[doneat54]

I agree. People either get it, or they don't. I am in a "transportation" phase right now where I am driving a $1300, 18 year old car with two dirty dogs in the back. (I have 3 antique vehicles worth collectively maybe $125k, and DW has a nice fairly new ride). I chuckle at myself from time to time when I pull into a gas station and I see people glance at me in my dirty old car thinking, "do they think I am a multi-millionaire?".

The fun part is that I really don't care. I will wake up every single morning for the rest of my life and ask myself, "Well what do *I* want to do today"

 

[MI-Roger]

LOL. Every day at lunch time, I walk past the 60-70 year olds still coming to downtown, still w$rking in an office, and I wonder how many of them really need to, or how many could have FIRED.

Hey! Some of us 60+ YO employees are still working because we were lucky enough to find a career that is both fulfilling and that we love. I will be leaving the workplace, for good this time, in early Summer at age 64. And my Financial Planner keeps reminding me at every meeting me that he had everything all set for me to retire 4 years ago.

But as I was telling a 57 YO co-worker yesterday, each of us only has so many good years left. Regardless whether or not we love our jobs, we need to retire to allow ourselves to enjoy as many of those remaining years as possible. Not forgetting that all future financial projections contain an element of error risk. My plan to mitigate that risk was to work a few years past the identified "retirement is doable" date.

 

[DrRoy]

The story said the cause was divorce and business failure. Not the same as never saving anything for decades.

 

[ckelly78z]

Better houses, cars, and vacations come to mind for most of my friends who have next to nothing saved for a comfy retirement. I get the standard answer "i'll never be able to retire" when I ask about it, and tell them I plan on going early.

I have lived on our paid off farm for 25 years, driven my 1996 truck for 9 years now, and love going camping (no exotic destinations). We live simply, frugaly, and stress free.