The "Retirement Crisis" is worse than we thought

[Winemaker]

An acquaintance of DW and I is a single mom, working 2 waitress jobs, not working more than 20 hours in each. She has court ordered child support that the father does not pay for whatever reason, and was not eligible for aid of any kind. When we prompted her about looking at long term projections, we found a friend of mine that would hire her for $15/hr, 401k, and healthcare that she would have to make a contribution for.

She apologized profusely to my friend, DW, and I that she would have to make $18.10/hr just to have to have enough to "cashflow" to make ends meet, now having to pay for healthcare.

We ended up finding a job for her at $20/hr. If her deadbeat ex ends up not ever paying, she would be eligible for food stamps.

 

[exnavynuke]

Since most of these poor people you refer to would be getting the earned income tax credit (which IS a refundable credit, so they get it even when they do not have any tax liability) I doubt that they would have a tax liability.... and as my other post says, if you do not have a tax liability you do not get the savers credit....

BTW, the EITC is more than the savers credit so I would bet your mother would rather get that than the savers credit...

Well, she's not "my mother", just a person I was friends with in high school (22 years ago when I worked at that same fast food place). I just happen to know about her general situation due to Facebook (including having her ask for help paying her bills to keep the lights on).

I mention that particular situation because as crazy as it seems to many of us who have been "more successful" in life, there are tons of people like that out there who aren't going to save any money no matter what incentives etc are provided. They get there tax refund and pay the bills so the electricity doesn't get shut off again or they go buy their kids clothes because they outgrew their current shoes six months ago etc. It's easy to forget that many of those people working low paying jobs in their 30's, 40's, and later aren't doing it because they're stay-at-home parents wanting a little extra cash. They're doing it because those are the only jobs they've found and it's how they scrape by (though they often need help just to scrape by).

Unless we decide to regulate procreation to only those deemed "fit", there are going to be such people who make choices that put themselves and their families in situations where saving isn't an option by making choices similar to what she did.

 

[Teacher Terry]

Disability is extremely hard to get unless you are terminal. Often a person gets denied repeatedly by SS and if they can do all the paperwork and appeal in time for their guidelines eventually they will appear before a judge who hires an vocational expert for their opinion on ability to work, etc. It can take 2 years to get the hearing. I worked in this area for years. Otherwise they can hire a lawyer who takes a third if they win when the client gets back pay. I can assure you it is not a lot of $ to live on. It is based on how much the person made while working. Also was a social worker before that and unless a kid is being abused they will be much worse off in the foster care system. I worked in this area too. It used to be that you could get a decent paying low skilled job but no more. I really feel sorry for some of these people.

 

[Texas Proud]

Well, she's not "my mother", just a person I was friends with in high school (22 years ago when I worked at that same fast food place). I just happen to know about her general situation due to Facebook (including having her ask for help paying her bills to keep the lights on).

I mention that particular situation because as crazy as it seems to many of us who have been "more successful" in life, there are tons of people like that out there who aren't going to save any money no matter what incentives etc are provided. They get there tax refund and pay the bills so the electricity doesn't get shut off again or they go buy their kids clothes because they outgrew their current shoes six months ago etc. It's easy to forget that many of those people working low paying jobs in their 30's, 40's, and later aren't doing it because they're stay-at-home parents wanting a little extra cash. They're doing it because those are the only jobs they've found and it's how they scrape by (though they often need help just to scrape by).

Unless we decide to regulate procreation to only those deemed "fit", there are going to be such people who make choices that put themselves and their families in situations where saving isn't an option by making choices similar to what she did.

Bad choice of words on my post... I was referring to the mother you mentioned, not saying she was your mother.... should have said 'the mother in your example', but was just trying to be quick...

Sorry for any confusion...


As for 'people like that'... well, I know a few through inlaws.... and I am amazed that the people buy their kids cell phones at a young age... one of these is a single mom who had a couple of her own kids and is taking care of 2 of her brothers (who is in jail)... all 4 kids had cell phones... even as young as 8.... for her, saving is not an option because she makes bad choices...


OH... just remembered about another lady who was a single mom with one kid... and was paid pretty well as she was a teacher... however, because of her bad decisions she was having her car repoed and was kicked out of may rental houses and apts.... she would always ask me about he finances but would never, and I mean never keep track of where she spent money.... now, I had thought that at least she would be getting a pension when she retires, but her brother told me she had taken the money out of her pension!!! And no SS either... I wonder what is going to happen to her as I do not think she can retire....

 

[NW-Bound]

Disability is extremely hard to get unless you are terminal. Often a person gets denied repeatedly by SS and if they can do all the paperwork and appeal in time for their guidelines eventually they will appear before a judge who hires an vocational expert for their opinion on ability to work, etc. It can take 2 years to get the hearing. I worked in this area for years. Otherwise they can hire a lawyer who takes a third if they win when the client gets back pay. I can assure you it is not a lot of $ to live on. It is based on how much the person made while working. Also was a social worker before that and unless a kid is being abused they will be much worse off in the foster care system. I worked in this area too. It used to be that you could get a decent paying low skilled job but no more. I really feel sorry for some of these people.

A friend of mine has a cousin who is on drug. My friend said the drug scrambled his brain, and he could not work. The cousin was denied SSI, found a lawyer, and was able to claim disability and got money for back pay. He blew that back pay money in a few months on drugs, and came to my friend's home to beg for some money from my friend's son.

This kind of people needs a lot of help, but does anybody know how to help?

 

[Texas Proud]

Disability is extremely hard to get unless you are terminal. Often a person gets denied repeatedly by SS and if they can do all the paperwork and appeal in time for their guidelines eventually they will appear before a judge who hires an vocational expert for their opinion on ability to work, etc. It can take 2 years to get the hearing. I worked in this area for years. Otherwise they can hire a lawyer who takes a third if they win when the client gets back pay. I can assure you it is not a lot of $ to live on. It is based on how much the person made while working. Also was a social worker before that and unless a kid is being abused they will be much worse off in the foster care system. I worked in this area too. It used to be that you could get a decent paying low skilled job but no more. I really feel sorry for some of these people.

I was going to leave it alone... but decided to respond...

If you look at my other post... I have inlaws (relatives of a BIL) who seem to be able to get disability... one is a man in his late 50s who has been getting it for years... I was wondering how since he seemed to be in great shape and able to work the last time I saw him when my nephew graduated... he was a merchant marine and might not have been able to do that anymore (not sure how hard it is, but was told it was boring) but he could have done many kinds of jobs... he just did not want to...

There are others in the family line that are also on disability (family line being cousins etc.).... none are terminal...

 

[Teacher Terry]

I worked with disabled clients for 25 years doing vocational expert work, testing, evaluations, etc and I can tell you that the cheaters are few and far between. I have seen clients lose everything by the time they finally get SS after waiting 2 years or more. Also if SS suspects you are cheating they sometimes hire an investigator to follow you around and record it. I was once fooled by a client and recommended disability as did the doctor and he got it. Then one day 2 people show up at my work from SS and ask me to watch a video and then render a professional opinion in writing. Sure enough this man that was supposed to be very physically disabled, could not use his hands etc was loading heavy items into his truck at home depot, lifting his son in the air, etc. I felt bad about being duped but the doctor was duped too. Anyways, he lost his disability and then was prosecuted.

 

[Dash man]

My brother has been on disability for years for depression. Physically he's fine. I have spinal issues with severe nerve pain, neurological tremors in my hands, severe arthritis, and now heart disease. I never considered filing for disability and always wondered how my brother qualified.

 

[Teacher Terry]

Years ago SS was very loose and people got it for drug problems, etc. Then that stopped and if he got it for depression now he would have had to have shown that he is severely mentally ill. It sounds like he got it when they were not so strict. Things have changed in the past 25 years.

 

[Texas Proud]

Years ago SS was very loose and people got it for drug problems, etc. Then that stopped and if he got it for depression now he would have had to have shown that he is severely mentally ill. It sounds like he got it when they were not so strict. Things have changed in the past 25 years.

How long ago is 'long ago'? That might be why the inlaw is on.... he had (or still has, not sure) drug problems... one of his brothers is in jail for drug dealing and also had drug problems...

I guess if you are on, then you get to stay on

 

[Pilot2013]

Disability is extremely hard to get unless you are terminal. Often a person gets denied repeatedly by SS and if they can do all the paperwork and appeal in time for their guidelines eventually they will appear before a judge who hires an vocational expert for their opinion on ability to work, etc. It can take 2 years to get the hearing. I worked in this area for years. Otherwise they can hire a lawyer who takes a third if they win when the client gets back pay. I can assure you it is not a lot of $ to live on. It is based on how much the person made while working. Also was a social worker before that and unless a kid is being abused they will be much worse off in the foster care system. I worked in this area too. It used to be that you could get a decent paying low skilled job but no more. I really feel sorry for some of these people.

Sorry, but this is not true, at least in SC. I have "step" siblings that i feel take advantage of this system readily, and easily.

There's no simple solutions.

 

[Elbata]

I'm surprised the "saver's credit" applies as high as it does. A couple (no kids) could have ~$83K gross, $61,500 AGI to get some portion of the credit.

I wasn't even aware of this credit until recently.

 

[Fedup]

Sorry, but this is not true, at least in SC. I have "step" siblings that i feel take advantage of this system readily, and easily.

There's no simple solutions.

The rate of people claiming disability has risen since the Great Recession. I'm sure they caught some cheaters and some didn't get caught. That's how to explain the rise.

 

[rayinpenn]

Did we all forget what LBYM stands for? Allow me to remind you: it means buying a smaller house then you can afford. Bypassing the zoom zoom and buying a dependable good mileage car - possibly 2 years old. Shying away from restaurants and brown bagging it. Doing so requires discipline and thinking long term. The truth is for most people saying no is a tuff nut.

I've watched a number of shows where they try to get people to get their finances on track. Some of the participants usually one of a married couple says I want stuff now and they end up spending themselves into a disastrous situation.

 

[Teacher Terry]

It is extremely hard to get in NV and my other friends that are still working as vocational experts say that the backlog and denial rate is usually 2 years and they do their work by phone now so they can serve people/courts all over the country. Teaching is my semi-retirement job but with 3 grad degrees in these areas and 25 years of work experience and friends still working in the field this is the truth. Also at any time SS can send people a letter telling them to work with Vocational Rehabilitation to get a job. Many people on disability can't work f.t. but can work p.t. and they are allowed a certain amount of $ that can be made before losing their disability. If you want a trial period without losing your benefits you have a 9 month time you can work f.t. and keep your benefits to determine if you can work in the long term. Imagine that you have a severe disability and want to work but can't earn enough to pay your medical expenses, etc. Then you work p.t. and keep your Medicaid/medicare. After 2 years people on SSDI are eligible for Medicare no matter their age. What I have seen is that people that are very disabled often lose their savings, home and marriage while appealing the automatic denials that most receive. Sure there are cheaters but I can assure you they are few and far between. Many people become disabled and unable to work through no fault of their own from illness or accident. Picture a young doctor that gets a severe head injury and can't practice anymore. He can do a menial job for a low wage. There but for the grace of God go I. People's lives can be shattered in an incident.

 

[Walt34]

Picture a young doctor that gets a severe head injury and can't practice anymore. He can do a menial job for a low wage. There but for the grace of God go I. People's lives can be shattered in an incident.

This reminds me of an event that happened when I was a police officer. Another officer handled a traffic accident with a "relatively minor" injury to one of the participants - he'd broken two fingers on his left hand that fortunately would heal up fully - in about two months. For most people this is not a 100% disabling injury. Inconvenient, but most can probably work around it for a while.

He asked "What am I going to do? I can't work with this injury".

"What kind of work do you do?"

"I'm an orthodontist."

"First thing tomorrow morning, call a lawyer".

 

[GravitySucks]

I tire of hearing how the lazy use SSDI.
DW was on SS disability the last 16 months of her life.
She was examined by a doctor I wouldn't let touch my cat and a psych that was just as bad.
She was denied and we had to get a lawyer to finally get what she was due....a whole $725 a month.
The doctors, lawyers, and people employed by the system made out well, she was made to feel like a lying slacker.
DGF has stage 4 ovarian cancer. She didn't have to jump through hoops as they recognize it might slow her down a bit, and is living large on that $600 some odd a month.

 

[Teacher Terry]

Thanks Gravitysucks for pointing out the realities of SSDI. I get sick of hearing people say things that in general are not true just because they might know of 1 person that they think should not get it. Most people want to work and you can't live on what you get from SSDI.

 

[samclem]

What we know:
1) When the "labor participation rate" (a good measure of the true availability of jobs/attractiveness of the job mrket) goes down, SSDI claims go up. When getting a job is hard, more people file SSDI claims. I have not found a study indicating that job scarcity causes increasing numbers of bad backs or other physical infirmity, but maybe it does.
2) For low-paid workers, SSDI replaces 90% of the income they were receiving when they worked. That doesn't provide much economic incentive for those people to get off the program.

From this MIT report:

"[SSDI] Monthly benefits currently [2011] average $1,150 for new awardees and are indexed to the Consumer Price Index. Two years following the onset of disability, beneficiaries become entitled to Medicare benefits"

Above observations are not based on "n=1" anecdotal reports.

 

[Texas Proud]

Thanks Gravitysucks for pointing out the realities of SSDI. I get sick of hearing people say things that in general are not true just because they might know of 1 person that they think should not get it. Most people want to work and you can't live on what you get from SSDI.

As I said, the people I know have been on for awhile... You had mentioned that drug use was something that could get you on but had been taken away... I had asked when that happened, but no response...

The other people that I know that are getting it have children with special needs...

 

[Teacher Terry]

Most people want to work. We had many SSDI recipients come to our program voluntarily requesting help to either get a job or retrain for a new job. It is hard for people that are disabled to find jobs. There is lots of prejudice and employers often don't want to make accommodations. We would pay for accommodations and of course this encourages employers to hire disabled people. The reason that the Feds created the nation wide program known as Vocational Rehabilitation was because the number of disabled people that were working was very low because of all the discrimination. It was not that they were lazy and did not want to work. I can also tell you that many people in the trades wear their bodies out and by 50's can't do it anymore. To compound the problem many of them were not good in school and don't read well enough to retrain for a sedentary job. I have seen lots of people lose homes, savings, marriages while fighting for SSDI over a 2 year period. No matter what you think they would rather be working.

 

[Teacher Terry]

TP: I can't remember exactly when that stopped but it was sometime after 1992 when I started to work in the field. Also they may be getting it for a different reason then drugs. So if they have brain damage or a mental illness from the drugs then they may qualify with a different diagnosis if it is severe.

 

[Teacher Terry]

Yes some kids with special needs may qualify mainly because of the huge expenses associated with a severe disability such as the costs of wheelchairs, in home care needed, etc. Still cheaper to help parents with services they need to keep them home versus an institution.