Last Ditch Emergency Income Options?

[mountainsoft]

We all plan for the future, saving money, reducing expenses, etc. However, despite our best planning, the unthinkable can still happen and we blow through our life savings. What then? What options do you have when you've spent all the money you set aside for retirement?


One of the obvious is to sell our home. Right now that would be very difficult for me to do as my wife and I built our home ourselves with our own hands. It's not just a house to us, but in an emergency I guess beggars can't be choosy.


Are there any other last ditch emergency income options I'm not thinking of?

 

[harley]

WHowever, despite our best planning, the unthinkable can still happen and we blow through our life savings. What then?

No it can't. I absolutely can't imagine a situation where we "blow through our life savings" short of a global catastrophe that would make the concept of retirement moot, as we would be either dealing with survival or more likely dead. Are you suggesting that we would just blithely sit around eating wagyu beef and ordering from Amazon until the last penny was spent? It won't happen.

 

[pacergal]

Return to work?
otherwise, probably sell the house and live w/i constricts of SS check plus proceeds of house. Or go live with one of the kids and hand over ss $ every month--have two great kids who both have said we could live with them, so that is a viable option if SHTF.

 

[marko]

Are you suggesting that we would just blithely sit around eating wagyu beef and ordering from Amazon until the last penny was spent? It won't happen.

I think the OP was asking more of a 'worst case scenario' plan beyond our control. Do any of us have some sort of fall-back should something go horribly wrong with our personal RE plan. Maybe like a massive 1929 depression, Argentina-like inflation or something like a wealth draining health situation.

At $100K+ per year for nursing homes, a modest portfolio could be challenged within a few years if one's spouse became so in need. Suddenly, you're 78 years old, Medicaid has taken over the costs but you're broke and too old to work. Now what do you do?

I don't have a plan myself were my portfolio to suddenly disappear or be notably diminished. Sell my house and live in my car? Not something I stress too much over but my cushion is fairly hefty.

 

[USGrant1962]

SS, medicare, sell primary home and move to the cottage; maybe move in with the kids. But with SS and home equity I could go a LONG time before burdening the kids.

 

[Dtail]

Would probably move to Mexico before it is too late, if the reasons were purely just financial.

 

[NW-Bound]

I think the OP was asking more of a 'worst case scenario' plan beyond our control. Do any of us have some sort of fall-back should something go horribly wrong with our personal RE plan. Maybe like a massive 1929 depression, Argentina-like inflation or something like a wealth draining health situation.

I don't have a plan myself were my portfolio to suddenly disappear or be notably diminished. Sell my house and live in my car? Not something I stress too much over but my cushion is fairly hefty.

In a catastrophic case, nobody would think of buying any home anyway. I bet real estate market did not do well in France when Germany was invading, or in Berlin when Allied bombs fell.

There's no point in worrying too much about this, as one would have to think of an escape route or survival tactic as the situation develops.

Hmmm.... If an asteroid strikes, what's your plan? I have a motorhome, but would they be able to predict where it is going to hit, so I could hightail out of Dodge, provided that I could find a safe place to head to.

 

[NW-Bound]

What concerns me more nowadays is a sudden health problem, which is a lot scarier than financial deterioration which takes time to develop.

Why, I have been through this 5 years ago, right after I started full retirement. Always been in good health, with the only minor issues being fasting blood glucose in the high 90s, and blood pressure often in the 130/90. My doctor told me my bloodwork was the best he had seen in a while. Then, one day I found myself with the strong likelihood of not even making it to claiming SS early.

Darn! What the heck could I do but to pursue surgery and treatment? One foot before the other, and I am still around with scars of surgery to remind me of the past problem.

Can't worry too much about financial problems, when you could get hit by a fatal health problem out of the blue. I have seen that with some former posters here, who were of the type to take care of their health. They were not as fortunate as I am. Life can be so unfair.

 

[W2R]

I could survive on what my SS and mini-pension provide, since my house is paid off and I have no debt. It would not be easy but I could do it. Luckily, cutting way back on my spending is something I have done before and I am pretty good at it.

My TSP "G Fund" is guaranteed not to lose share price value, so if inflation is not an issue I could supplement with cash and G Fund. Medicare is subtracted from my SS, and my supplemental BCBS is subtracted from my mini-pension, so my health care would be the same as always.

NO WAY am I selling my Dream Home, though! No way, no how, huh-uh, not gonna DO it until exhausting all other options. Besides, if the economy became that bad, I am thinking that home buyers would be few and far between.

 

[mountainsoft]

I absolutely can't imagine a situation where we "blow through our life savings" short of a global catastrophe

I was thinking along the lines of an accident, illness, or medical condition that would require expensive care, medications, and possibly ongoing long term care. Even with health insurance that could drain our meager savings quickly.


In any case, it's more of a theoretical thought than an actual concern. I was reading a book lately talking about selling your home to pay for long term care and it had me wondering what other income options there were if I couldn't work anymore and had no more assets.

 

[Sunset]

apply for many credit cards and rack them up.

Then rob banks, get arrested, go to prison and demand medical care.

 

[RobbieB]

True story. I worked with a guy who was in his 50's, a degreed mechanical engineer who was making good dough and he picked up cans and bottles (from the street and park garbage cans) to recycle for dough.

 

[Dtail]

apply for many credit cards and rack them up.

Then rob banks, get arrested, go to prison and demand medical care.

Methinks one will need extra medical care in prison.

 

[Scuba]

A reverse mortgage is an option we would consider rather than selling our home. Hopefully never will be necessary but we aren’t concerned about leaving an estate behind. Our beachfront So CA condo is already worth about $1.5 million so plenty of borrowing power there.

 

[RobbieB]

Yeah, same here. If the feces gets deep reverse mortgage and stay for life. No heirs.

 

[Hermit]

One of the guys out here lives on a little over $12K/yr. My SS will be 3 times that when I am 70. I should be good.

 

[Bir48die]

Wife and I discussed this. Short of a global war starting we have about $77k between SS (at FRA for me). We would divorce and she would add $5k onto pension (non survivorship) and she could get $14k non taxable veteran benefit from her late husband. That is if there was a very long and deep crash. Outside of that I have a pickup and a camper to head to the hills

 

[aja8888]

Move to LA, beg for pocket change. That seemed to work for a lot of people when I was in LA (working).

 

[Another Reader]

My only back up plan is for a major earthquake that destroys the California properties. It involves moving into one of the Arizona rentals with whatever has ended up in the storage unit in the way of furniture and appliances.

A couple of weeks ago, the emergency planners over there had a planning session/drill where the scenario was 400,000 Southern Californians invading after a destructive earthquake. How do you feed and house 400,000 people that suddenly show up at your door with nothing but their cars and whatever is in them?

 

[4legsgood]

If the goal is to keep your home if SHTF, is there some way to turn your house or property into a money maker? Airbnb, pet sit, rooming house, rent garage for storage. Maybe it would be easy to turn it into a multifamily unit. Etc.

I occasionally temp rent out a room and also dog sit. It makes me feel good to verify that I could ramp either of these up and at least cover some of my bills. Plus, it's fun

 

[RunningBum]

My only back up plan is for a major earthquake that destroys the California properties. It involves moving into one of the Arizona rentals with whatever has ended up in the storage unit in the way of furniture and appliances.

A couple of weeks ago, the emergency planners over there had a planning session/drill where the scenario was 400,000 Southern Californians invading after a destructive earthquake. How do you feed and house 400,000 people that suddenly show up at your door with nothing but their cars and whatever is in them?

Houston evacuated more than a million people for Hurricane Rita, I believe. The issue, by far, was the absolute traffic mess it created. As far as taking care of them, they spread them out, either naturally or by plan, to major inland cities like Austin, San Antonio, and Dallas. I was living in the Austin area at the time. I don't know how many made it there, but I don't recall it being a problem. A few hundred came to the middle school a couple of blocks from me.

Back to the question at hand, one method would be to delay SS to 70 so you have that bigger check coming in, even if your investments are wiped out due to market performance or the need to spend. AFAIK if you have to declare bankruptcy you'll still get your SS benefits, so it'd be better to have the larger benefit.

 

[joeea]

Are there any other last ditch emergency income options I'm not thinking of?

There are plenty of options beside the obvious (sell the house you are emotionally attached to)
- work
- get help from relatives
- reverse mortgage
- rent part of your house
- sell your home to a relative, rent it from them
- sell other possessions
- collect money from charity
- some or all of the above
- learn to get by on a significantly reduced income
- etc