What If You Run Out of Money?

[SoReadyToRetire]

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.

 

[bobandsherry]

Still have social security with medicare. If in their house they still have assets. So not sure how you define penniless.

 

[SoReadyToRetire]

Well, all these calculations we go through before retiring tell us when we'll "run out of money". That's what I'm referring to.

 

[RobbieB]

That's when you take out a reverse mortgage.

 

[NW-Bound]

Some retirees know how to adapt. Quite a few cut the cost of living by moving into an RV, and also doing part-time work at a campground or RV park for additional income. RV life can be cheap if you do not drive the 6-to-8-mpg monster around the country, and pay monthly space rental instead of the daily fee.

Recently, there was a thread about a woman who did the above and got some media coverage. She passed away some time later due to an illness.

 

[marko]

At least here in Mass, the social safety net is pretty good. Not great, but nobody is going to starve or go homeless.

In fact there are many decent programs that I wish I could take advantage of but one must qualify for what passes as welfare here. If one were to take full advantage of all benefits, the rough estimate is that it would be similar to having a job paying ~$50K a year.

The real trick is to find a coordinator to make you aware; in your example, our Elder Services is quite excellent with matching needs to services.

For example, my brother who is disabled but far from qualifying for welfare can take handicap transportation (essentially a specialized taxi cab) anywhere in a 50 mile radius for $3.00 each way; it picks you up at your front door and drops you off at the door of wherever you're going, even if it's to go out to a restaurant or to the mall.

He also gets a housekeeper once a week and someone to help him bathe every day. He pays nothing and as noted he is fairly well off. No game playing, no faking income; it's all part of what's out there.

But that's just this state. I suspect every state is different.

 

[marko]

Well, all these calculations we go through before retiring tell us when we'll "run out of money". That's what I'm referring to.

What that really means is that you're not ready to retire.

 

[MRG]

Medicaid and other social services. As mentioned upstream the difficulty is finding the services.

I remember in the 1960s relatives saying they received ~$65 monthly SS. None had been particularly high earners and some of their income was prior to SS.

 

[Just_Steve]

Section 8, SNAP and other programs out there.

 

[BigMoneyJim]

24 hours ago I realized that my "out of money" scenario results in my having a pension (in 6 years) plus SS (in 13 years) as lifetime payouts that put me around double the poverty line.

So if I "run out of money" I'll just have to budget a bit and maybe get a roommate.

 

[Aerides]

Between SS, Medicare, Medicaid, and other support that would help. Reverse Mortgage might be an option at that age. Or just sell the house, move to a cozy rental and conservatively invest the proceeds to work with the assets?

 

[W2R]

If you Google "homeless elderly" there are some articles that to me, are pretty hair-raising.

Honestly you just don't want to end up old and broke. And my belief is that you can't depend on anybody, or any government entity, to appear like a white knight and take care of you if you become destitute in your final years. You have to do this yourself, and make sure you don't end up in this situation.

Or at least, that is my viewpoint on it. In previous discussions here some people joked about suicide (half seriously?) but to me that is not an option.

 

[SoReadyToRetire]

OK, so the gist so far is that yes, there are programs out there that would hopefully keep such a person alive (though maybe with not much of a "life").

So if we wouldn't die if we ran out of money when we were, say, 87 (which is what FireCalc is currently showing for me, for example), why do we worry so much about those last few years? Is it worth taking a couple more years off THIS end of my life (by continuing to work, I mean) to make sure I have money at THAT end? (<--I know that's COMPLETELY subjective. But doesn't anyone else think about that?)

 

[HI Bill]

Does anybody actually know anybody who ran out of money after they retired because they didn't save enough?

No, not yet! If you run out of money (and SS is not adequate to pay the bills), and you own a house, but can't pay the property taxes, you may lose the house. Medicaid could step in and help with your medical care, but unless you qualify medically, would not pay for long time care.

Are you asking because you haven't saved anything, or don't want to save anything?

 

[NW-Bound]

OK, so the gist so far is that yes, there are programs out there that would hopefully keep such a person alive (though maybe with not much of a "life").

So if we wouldn't die if we ran out of money when we were, say, 87 (which is what FireCalc is currently showing for me, for example), why do we worry so much about those last few years? Is it worth taking a couple more years off THIS end of my life (by continuing to work, I mean) to make sure I have money at THAT end? (<--I know that's COMPLETELY subjective. But doesn't anyone else think about that?)

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.

 

[harley]

If I run out of money my plan is to get a reverse mortgage on any organs that are still functioning. I get to keep using them until I die, then the (organ) bank can foreclose.

 

[COcheesehead]

eBay baby. Selling anything I got.

 

[NW-Bound]

If I run out of money my plan is to get a reverse mortgage on any organs that are still functioning. I get to keep using them until I die, then the (organ) bank can foreclose.

What if the prospective buyer says your organs are worn out and not worth much?

 

[harley]

What if the prospective buyer says your organs are worn out and not worth much?

If they've survived what I've put them through they must be gold plated.

 

[NW-Bound]

Hmmm... Never thought that a smoker's lung and drinker's liver would be worth more than a teetotaler's organ, but I see your point.

 

[walkinwood]

It is an easy experiment.



Take a bus to some town where you know now one. Allow yourself just the amount of money you'd get from SS after medicare premiums. Take only jobs that an average 85 year old would get. See how you like living that way.


If you like it, you'll probably never have to worry about running out of money

 

[trumpeting_angel]

If your life expectancy is potentially beyond age 87, and you’re eager to leave the workforce, consider downsizing, getting more frugal, making energy-efficient changes, and w*rking part time. It can be done. But don’t just quit and hope for the best. That could make the later years pretty grim.

 

[RobbieB]

My mother in law died broke in the nursing home. We prepaid her funeral to get her net worth below 2 grand so Medical would take her.

So yeah, it happens and I know first hand. But she did not die in the street or starving or uncared for. She died of complications of heart failure.

 

[Just_Steve]

When 87 and broke, do a bank job. You might get three hots and a cot in club fed.

 

[Independent]

Social Security, Medicare, Medicaid (if your income is low enough), meals on wheels.

Most communities have subsidized elderly housing. We have possibility just a half mile from our current house, I believe the rent is capped at 30% of income.

I don't expect that I'd be starving, homeless, or dying of an easily treatable illness.

That's all fine until I need a nursing home. I'm not thrilled about ending my days in a Medicaid-only facility.