What If You Run Out of Money?

[daylatedollarshort]

When i worked in downtown LA years ago, I met many homeless during our lunch hour walks. It's a good place to be homeless as panhandling (begging) pays well, and purses were easy to snatch. Plus, the park areas are inviting. Many of the homeless in LA are transitory and come from colder climates when the weather is bad for them.

They used to ask us walkers for quarters back then, but by now it's probably a dollar due to inflation.

Also, all day parking back then was $1.00 in the remote lots so it didn't cost the homeless a lot. Now, many of those lots have been developed and they probably park farther out and take a bus into town.

Many of the homeless these days are children, the elderly, working poor, mentally ill or physically disabled. San Francisco has 3,000 homeless children.

 

[aja8888]

Many of the homeless these days are children, the elderly, working poor, mentally ill or physically disabled. San Francisco has 3,000 homeless children.

Yes, it's a sad dilemma. I was referencing the LA area where most were adult men and women in the 1980's. Besides mentioning the ones you did, let's not forget many of my generation of Vietnam veterans and other military.

 

[karen1972]

An excellent point!

I know of several people who have been gobsmacked by that little trap when they found out the size of their SS check. From what I can tell their tax 'savings' went for motor-homes, boats and very fancy household furnishings.

Yeh I know a few business owners that are like, look I wrote everything off.. um yep and paid zero or near zero. Construction workers come to mind, lots of tools to write off, nice fancy trucks, etc. They are always shocked when they find out how little their check will be after making "SO MUCH" money over their career and somehow it is the govt that is hosing them.

 

[joeea]

A couple of women on the Widows/Widowers Board I frequent were saying that they worked off the books to save on taxes.

Yup, breaking the law can sometimes save on taxes...

 

[imoldernu]

How about a first person (not you) story of someone who is in his/her seventies or eighties and is totally broke, no food and no place to sleep.

How did he/she get there?

 

[Souschef]

How about a first person (not you) story of someone who is in his/her seventies or eighties and is totally broke, no food and no place to sleep.

How did he/she get there?

If you google "Spirit of Santa Paula", there are many stories of the local homeless and near homeless. I volunteered in the kitchen and also preparing reports for grants for this group.
Bless them for trying to help these people.

 

[Tracer]

If you don't have insurance for it, long term care can wipe out savings. In my case, I self-insure for that, so it's a big concern for me. IMO purchasing an annuity should be at least a part of every retirement program. If you blow your entire life savings, between that and your SS, you'll at least have an income that will be there every month that you can't outlive.

 

[97guns]

If we totally ran out of money, my daughter and son-in-law plan that we can move into their guest suite any time we want. .

That’s my cousins retirement plan who hasn’t saved a dime for retirement, his son got an engineer job and he was pushing him to buy a piece of land to build a house with in laws quarters but instead the son bought a track home, retirement plans down the drain

 

[mountainsoft]

I know of several people who have been gobsmacked by that little trap when they found out the size of their SS check.

I've worked all my life but the jobs were always low pay, zero benefits. Then I started my own business about 25 years ago. I have really enjoyed it and it gives me a lot of freedom, but it has never been all that profitable. So even though I've worked my entire life, my SS check is going to be quite small. Knock off 25% for the "haircut" in 2034, and it's downright pitiful (about $600/mo at FRA - age 67). Every little bit helps, but I certainly wouldn't be able to live on SS alone.

 

[Huston55]

I've worked all my life but the jobs were always low pay, zero benefits. Then I started my own business about 25 years ago. I have really enjoyed it and it gives me a lot of freedom, but it has never been all that profitable. So even though I've worked my entire life, my SS check is going to be quite small. Knock off 25% for the "haircut" in 2034, and it's downright pitiful (about $600/mo at FRA - age 67). Every little bit helps, but I certainly wouldn't be able to live on SS alone.

Based on this, as someone with a small SS check & not a lot of FIRE income, I would expect you would not be in the cohort that is most affected by any means testing reduction of SS.

If, on the other hand, SS cuts are just ‘straight across the board’, then everyone would be affected.

 

[joeea]

If you don't have insurance for it, long term care can wipe out savings. In my case, I self-insure for that, so it's a big concern for me.

I'm assuming you put aside enough money to cover your long-term care, as part of your self-insure process? So why would it still be a big concern?

 

[joeea]

Then I started my own business about 25 years ago. I have really enjoyed it and it gives me a lot of freedom, but it has never been all that profitable. So even though I've worked my entire life, my SS check is going to be quite small. Knock off 25% for the "haircut" in 2034, and it's downright pitiful (about $600/mo at FRA - age 67). Every little bit helps, but I certainly wouldn't be able to live on SS alone.

Sure. But this was a conscious decision, so you aren't gobsmacked, right?

 

[mountainsoft]

Based on this, as someone with a small SS check & not a lot of FIRE income, I would expect you would not be in the cohort that is most affected by any means testing reduction of SS.
If, on the other hand, SS cuts are just ‘straight across the board’, then everyone would be affected.

I'm just planning for the 25% reduction (I think it was quoted at 21% last I heard). If the reduction is less or they fix SS it will be a welcome surprise.

 

[mountainsoft]

Sure. But this was a conscious decision, so you aren't gobsmacked, right?

I'm gobsmacked I didn't strike it rich with my own business! Honestly though, I never went into it thinking I was going to make a lot of money. I wanted to do something I enjoy and have the flexibility to take care of other projects we would otherwise have to pay someone else to do.

 

[razztazz]

I'm assuming you put aside enough money to cover your long-term care, as part of your self-insure process? So why would it still be a big concern?

I would suspect it is not actually possible to "put aside enough" because you cannot know what "enough" will be. Not including the megawealthy et al. Just normal hard working, people, doing the best they can and giving a sufficient damn to actual try and cover these things.

You put enough aside to cover what is doable.

 

[mickeyd]

If the person was living in a CCRC (Life Plan) that was a tax-exempt facility they would be allowed to stay and all fees waived as long as they lived. One of the many benefits of a CCRC with a benevolent clause..

 

[imoldernu]

If you google "Spirit of Santa Paula", there are many stories of the local homeless and near homeless. I volunteered in the kitchen and also preparing reports for grants for this group.
Bless them for trying to help these people.

thanks... I read the most recent overview article, and it does hit home. In our relatively small town, we have three organizations geared to help for those in very similar situations... the homeless. In the first 15 years of my own retirement, I also helped with this, mostly in counseling and then in computer classes to help the homeless find jobs.

I read the thread as being more of a situation where running out of money was more a matter of time and bad financial luck, than situations brought on by bad decisions, drugs, alcohol or psychiatric situations, though I also agree there's often a fine line.

There are Government programs that are designed to help. I posted this link in one of the above posts, but I doubt that many here, could explain what the criterion is for eligibility for these benefits. Unfortunately, we often "know what we know" and don't get the full story.

https://www.thebalance.com/welfare-programs-definition-and-list-3305759

Welfare has become a bad word in America. Most know it as aid to "freeloaders". Fewer see it as a possible safety net if their plans go awry. Not all those who are down on their luck, are drinking their life away, or living under bridges.

Fortunately, although under attack, many of the Federal and Local Government programs are still being funded.