retiring without saving

[livingalmostlarge]

The other thread about the CNBC article about young people don't need to save for retirement to be able to have the same standard/quality of life before and during working got me curious.

Couple of people posted about people being 70 and $500k in debt. Or being retirement age and having nothing. What happens to people then?

If you are 65 or 70 and retiring without a pension? Or do people who usually retire without any savings have a pension always? And what happens when SS is all they have? Do they normally have medicaid? And are living on so little that it's okay?

I've always thought that maybe people have paid for home they sell and use to fund retirement.

 

[cbo111]

Our country is full of seniors who retire exactly as you describe. Often, I suspect, they did not plan or desire retirement. Adjustments must be made, like finding roommates, moving to a lower-cost area, living with their adult children (yikes), eating crappy foods. Not optimum. But in the grand scheme, better than about 3/4 of the planet.

 

[Dreamer]

My father worked mostly low paying jobs. He worked on big farms out west and chicken farm in the east. He also had a drinking problem for part of his life. I believe that he lived paycheck to paycheck for most of his life. I did not live with him for the majority of my childhood. He became disabled and received his social security disability. He lived in an apartment for the disabled and aged that was based on income. He used a VA hospital for his medical. I worried about his financial situation, but he did not seem to worry about it. I was on his checking account and knew how little that he had. He seemed pretty content with his life. He ended up dying at age 61.

 

[athena53]

There are a ton of social programs- subsidized housing, Medicaid for LTC, "extra help" for Medicare (I believe this is a combination of Medicare/Medicaid), SNAP, Meals on Wheels.

A patchwork which probably requires jumping through a ton of hoops and not the lap of luxury but, as cbo111 said, better than 3/4 of the rest of the planet.

 

[daylatedollarshort]

Retirees without savings can live college kids style, like the Golden Girls or get government assistance. Even without subsidized housing, a room here rents for around $800 a month, but if you qualify for Medicaid, SNAP and a ton of other programs, use the library, belong to the senior center with free activities and meals, take the senior bus or use public transportation with senior discount cards, etc. one could get by without too many other out of pocket expenses besides rent.

 

[aaronc879]

My father worked mostly low paying jobs. He worked on big farms out west and chicken farm in the east. He also had a drinking problem for part of his life. I believe that he lived paycheck to paycheck for most of his life. I did not live with him for the majority of my childhood. He became disabled and received his social security disability. He lived in an apartment for the disabled and aged that was based on income. He used a VA hospital for his medical. I worried about his financial situation, but he did not seem to worry about it. I was on his checking account and knew how little that he had. He seemed pretty content with his life. He ended up dying at age 61.

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

 

[FLSUnFIRE]

I worried about his financial situation, but he did not seem to worry about it. I was on his checking account and knew how little that he had. He seemed pretty content with his life. He ended up dying at age 61.

Hedonic Adaption in action. We humans seem to get used to our new normal pretty well.



If I find myself going down mental "what ifs," I'll remind myself that it probably won't bother future me as much as it does present me worrying about it. For someone as anal as I can be, I am amazed at how stoic I am with regard to major changes/challenges.

 

[Teacher Terry]

My friend lives in a senior apartment building and although she pays market rates for rent some in there do not and are on all or some of the programs Athena described. These are people who only have SS.

 

[Sunset]

People with zero savings would be good candidates for Medicare advantage programs that cost $0 per month, and maybe even put $$$ back into your SS check each month !!

 

[Aerides]

People who retire with debt or little savings live very low cost-of-living lifestyles. Small senior-assisted apartments, probably some reliance on local social services, the lowest price medicare plans, etc.

And sometimes they depend on their family and adult children for help. There are some sad threads here about folks who want to retire, but feel trapped knowing their parents have no savings and will guilt them into helping out.

Planning for a shoestring retirement, when you have a long time ahead of you to save and avoid that, and doing it anyway, is kind of a gamble, and probably impacts others in negative ways.

 

[marko]

People who retire with debt or little savings live very low cost-of-living lifestyles. Small senior-assisted apartments, probably some reliance on local social services, the lowest price medicare plans, etc.

And sometimes they depend on their family and adult children for help. There are some sad threads here about folks who want to retire, but feel trapped knowing their parents have no savings and will guilt them into helping out.

Planning for a shoestring retirement, when you have a long time ahead of you to save and avoid that, and doing it anyway, is kind of a gamble, and probably impacts others in negative ways.

There's a whole (and growing?) sub-culture of folks on some weird 'dark' economy. Between social programs, a lot of 'free' stuff, bartering and 'social engineering' they manage to get by. Not a great way to live out one's last years.

Seems to me though, that the lifestyle that got them to that point in old age, tends to make them early candidates for a visit by the reaper, sadly ending the misery sooner than later.

 

[ncbill]

Well, the aunt I buried just a few years ago was a single mother raising multiple kids after divorcing her physically abusive husband.

Her parents helped some by buying a home, fixing it up some, and selling it to her for only a modest profit on their part.

She did the "right things" within the constraints of her modest salary...e.g. in her mid-50s she refinanced her home to a 15 year mortgage, planning on retiring around age 70 when it was paid off.

Unfortunately her company outsourced her department just a few years later so she had to cash in her pension plan to make it to SS at age 62, and immediately refinance her home to a 30 year mortgage.

Over the next decade or so she also had to cash in her modest retirement savings...remember, single mother with multiple kids, so her 401k was never worth much in the first place.

IMHO, having a home helped significantly...by sucking out as much equity as possible via the mortgage refinance & later adding a HELOC she managed to stay in her home of nearly 35 years until just a few months before her death from terminal cancer.

And while it wasn't a priority for her to leave any estate I did manage to get roughly half of her home's sale price to her beneficiaries, who were very happy with what they got.

Her retirement was modest but she still enjoyed spending time with local family/friends & even managed to fly out-of-state to see her grandkids a couple of times annually.

Apart from SS/Medicare, the only benefit she received was having her annual property tax cut in half since her income was under $30k annually.

 

[karen1972]

I have a ton of family that retired with $50k or less going into retirement due to a myriad of issues. The biggest thing is you utterly give up choice at that point and are at the mercy of the state. So dental care is almost non-existent, hearing aids were not an option, you can get into housing but who knows where its located, usually no where near friends/family/church so you get isolated. You are not allowed to have any money as it all goes to pay your bills, so things like getting hair cuts becomes a trade-off to maybe buying shampoo or deodorant as you are usually allotted some tiny tiny amount for personal things, one couple said they get $20/month. They also were told they couldn't keep a quarter they won at the bingo because of the rules. Good thing the government got back their 25 cents from this old couple.

 

[jim584672]

Work until 70 and take Social Security at 70, have a paid off home, it can be done with minimal savings. Wouldn't be a lot of fun, but not impossible.

 

[aja8888]

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

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.

 

[Dreamer]

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

I don't know if he ever applied for VA disability or not. He used the VA hospital and received his medication in the mail from the VA. I helped him with his annual certification or whatever it was called for his apartment and social security disability was all that he had. His apartment was in the hometown where he was born. He died back in February 1989.

 

[Sunset]

...... They also were told they couldn't keep a quarter they won at the bingo because of the rules. Good thing the government got back their 25 cents from this old couple.

This seems like an exaggerated tale, as how would the gov't know they won 25 cents, who would even know. Where was this Bingo where the prize is 25 cents...

They need to find another Bingo hall if this is the size of the prizes!!

I'm sure it varies a LOT by State, my Social work experience was that people on disability were allowed to keep a small amount in the bank. One client was so cheap (frugal) that his account would slowly build up over time. I had to convince him to spend some of it by pointing out, once he was over the limit, they would cut off his check. It was a nicer problem to solve, than the clients who ran out of money 2 weeks into the month.

 

[jollystomper]

My observation is that if you have very little or no money, there are enough social programs (varies by state and location, of course) and subsidized/shared living options that you will not find yourself homeless, starving, or without medical care.

Of course, when you have lots of money, you have the flexibility to choose among many options for those items.

The challenge is when you have enough to be ineligible for the social programs, but not enough to have options.

 

[NW-Bound]

Retiring without saving? Does not sound like a nice and comfortable retirement to me.

Perhaps people are afraid of "saving without retiring". That is not nice either.

Most of us chose: "saving then retiring". Ah, that works out so well for me so far. Highly recommended.

 

[youbet]

My observation is that if you have very little or no money, there are enough social programs (varies by state and location, of course) and subsidized/shared living options that you will not find yourself homeless, starving, or without medical care.

.

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.

 

[EastWest Gal]

And some are priced out of their homes. This article is four years old but it still applies. She spent too much for her master's degree, for one thing.

https://tinyurl.com/mtj9fzea

 

[Walt34]

I have and had several relatives who lived and retired in absolute poverty. My paternal grandparents did have a paid-for house but it was in the little town of Tyrone, PA and when Grampa sold it in 1970 because he couldn't stay by himself any longer he got the now-equivalent of $55k for it. (Grandma had passed a few years earlier.) I didn't find out until after he died that even the living room couch was borrowed, and to my knowledge they never had a car. His one luxury that I knew of was once or twice a month walking down to the pub for a beer. That's "a beer" as in one.

Even when I was in high school it seemed a very depressing existence to me. Dad did help out with $10 or $20 now and then but we weren't exactly rolling in dough ourselves.

 

[NW-Bound]

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.

People with physical issues are easier to help.

Mental people, particularly those with drug addiction, need incarceration. This is not a simple matter to administer.

 

[NW-Bound]

And some are priced out of their homes. This article is four years old but it still applies. She spent too much for her master's degree, for one thing.

https://tinyurl.com/mtj9fzea

Yes. What she gets out of her Master degree is not worth the $140K she borrowed and spent to get it. I wonder how much of that money is for tuition vs. living expenses.

I don't know how much my wife's niece borrowed to get her MD, but her parents probably cosigned for the loans. When she was in school, she stayed in a 2-bedroom apartment, no roommate, because her dad said "it costs just a bit more than a single bedroom". They expected her to make beaucoup money when she finished school. I only listened, and made no comments.

 

[jollystomper]

And some are priced out of their homes. This article is four years old but it still applies. She spent too much for her master's degree, for one thing.

https://tinyurl.com/mtj9fzea

I find it interesting that there is no mention of what work (if any) her spouse does.