When Friends Claim They Need to Keep Working...and You are Doubtful

[Qs Laptop]

This doesn't bother me much but it sure is a topic of conversation with my DW. We have friends that we always considered were better off than we are. The man is 66, is retired and drawing SS; his wife is 65, is still employed and we estimate earns about $95K to $100K per year. The woman also is drawing a pension from her previous job which we estimate to be about $50K per year.

They do not have a mortgage, in fact, they recently downsized housing and netted $150K in the process of selling their old house and buying the new place. Between his SS income and her pension we guess they are taking in $80K per year. Add on her job income and they are making about $180K per year.

When the guy retired four years ago he told me their retirement holdings at Fidelity was about $1.5M. (They have Fidelity advising their portfolio.) I am assuming this was a lowball number since when he was working (up til 2019) he was making $75K a year. We're estimating they were making a combined $150-160K for most of the 2010's, no mortgage, no car payments, no extraordinary expenses.

Before he retired five years ago he had both Fidelity and a different financial analyst run the numbers and was told they were just fine, in fact his wife could retire if she wanted to but that they would have to buy health care insurance.

The other day the woman told DW she might need to work another year--"just to be sure we have enough." My wife can't understand this since they have no mortgage, no car payment, no significant expenses, just food and utilities. They take an annual modest vacation within the US.

My explanation is that she likes her job and/or likes getting out of the house away from the husband. I tell my DW to let it go, but she seems stuck with the mystery of why they think they don't have enough money.

Thoughts?

 

[Dash man]

You don’t know what you don’t know.

 

[aja8888]

Maybe they have a gambling habit or big drinking problem, or both....

 

[Aerides]

I would just change the subject vs. pressing them. Perhaps they have old debts, or are helping another family member, or something else, private.

FWIW you know far, far more about their finances that I do of anyone else I know. More than my sister, my parents, my closest friends.

 

[ivinsfan]

You've been here since 2018 and don't know about the one more year syndrome?

 

[pacergal]

Do they have family members they help with financially?
Maybe they do have cc debt or other debt you know nothing about.
Maybe the wife is simply fearful of the unknown expenses of aging or LTC.

We have two neighbors who I swear keep local workers in business with constant home upgrades/work. DH and I always wonder how much they spend.
I just can't imagine having that much work being done constantly in my home.

But in the end, it is None of Our Business! lol.

 

[Qs Laptop]

You don’t know what you don’t know.

I've known him since grade school. I've known her since the 80's.

Maybe they have a gambling habit or big drinking problem, or both....

No gambling habit. She doesn't drink, though he might go through $50 a week.

I would just change the subject vs. pressing them. Perhaps they have old debts, or are helping another family member, or something else, private.

FWIW you know far, far more about their finances that I do of anyone else I know. More than my sister, my parents, my closest friends.

I don't press them about it, neither does my wife, although she wants to.

You've been here since 2018 and don't know about the one more year syndrome?

Yeah, I guess that's probably it.

Do they have family members they help with financially?
Maybe they do have cc debt or other debt you know nothing about.
Maybe the wife is simply fearful of the unknown expenses of aging or LTC.

We have two neighbors who I swear keep local workers in business with constant home upgrades/work. DH and I always wonder how much they spend.
I just can't imagine having that much work being done constantly in my home.

But in the end, it is None of Our Business! lol.

They don't have family members that they help with. Both kids are grown and have jobs. Can't see how they have CC debt, they don't spend money. Fear of aging expenses might be a factor. Their "downgraded" house is only 3 years old so nothing to be done their. Furnishings are modest, I can't imagine they spent more than $20K outfitting the house.

 

[aja8888]

They don't have family members that they help with. Both kids are grown and have jobs. Can't see how they have CC debt, they don't spend money. Fear of aging expenses might be a factor. Their "downgraded" house is only 3 years old so nothing to be done their. Furnishings are modest, I can't imagine they spent more than $20K outfitting the house.

Some people just like to live a simple life and have no interest in blowing money. Could be OMY syndrome and saving for the kids someday.

 

[Qs Laptop]

I think the reason my wife is concerned about it is that we are approximately at the same point they were at four years ago as far as retirement savings. We're both still working and are making more than they were.

So maybe DW is worried if they think they can't make it why do I think we can retire if we wanted to?

 

[Texas Proud]

IMO it is up to each individual to determine when they feel like they have 'enough'... two examples...


I have a friend who has worked for govmt for over 20 years and has a pension from a company he worked for before that... he can get SS now... just off the top of my head he would be getting more monthly if retired then he gets working... but he 'needs' to work 'another year'...


The DW of another friend is a senior director of a LARGE national company so has to be making bookoos of money... they are not spending anywhere near what she earns as they have a simple lifestyle... I talked to hear a year ago and she said she was 'tired'... so I asked her if she had enough... she thought about it and I think a light went on... but she did say she had accepted a new position and was going to honor her commitment... so this year when I saw them after Christmas she is starting to process to retire... but again it will be 'one more year'... now, I can understand a bit as she has a bunch of stock options and has to wind down but still...


ME, I just worry about myself unless someone asks me for my opinion on their situation....

 

[GenXguy]

I don't worry about it. I have enough on my own plate without worrying about why other people keep working vs. retiring.

 

[folivier]

beaucoup, sorry, can't help it.

 

[OldShooter]

... Thoughts?

Why is this an important question for you and DW? Worrying about other people's business Is not something of any importance for me, especially when I have not bee asked for an opinion.

 

[Sunset]

Maybe they are better at hiding their spending than you know.

They could have made very bad investments. I know a guy who lost $4M

The savings they told you seems very tiny considering their income levels prior to him retiring.

Ages ago when I was working, a coworker who made exactly the same as me, couldn't understand how I could buy a condo while she had no money left at the end of each month. She had no clue where her money was going, could see the cumulative effect of restaurant eating 3x per week, etc.

 

[karen1972]

Some people are just more risk adverse..

They may want a more elaborate retirement

They may have made a bad decision, I know a few people who took out at 30% hair cut and went to bonds when COVID hit and they are just now moving it back into the market, that is a monumental change in what they might have.

They could have legitimate concern over health care or if they stay another year it improve their pension or other retirement benefits, etc.

The only time I've gotten involved is when a friend stated the reason being something that was typically a misunderstanding of tax law, how the ACA works, or how to draw funds prior to 59.5. Then I stated the facts and if they wished to discuss further I would, else I dropped it.

Retiring early is something I planned a long time for and I was very nervous about doing, thus I assume others are equally as nervous so no reason to push them if they are not ready.

 

[jollystomper]

In these situations I never assume I have all of the information. So I choose not to cast doubt on my friends in these situations. I have received, in the last year, new information from two couples that are friends, whom one would think could retire, that made me understand completely why they had not. In truth, it was brave of them to choose the share the information with me.

 

[Montecfo]

Well I have noticed that people seem to misunderstand what they need.

I had a buddy tell me he thought he needed $10m to retire.

I assume he wants to live off interest and divs.

Meantime he is a new grandfather punching a clock instead of hanging with grands.

In summary people are bad at simple math and have not studied retirement finance.

 

[freedomatlast]

If the $100,000 before taxes that she makes for another year of working, is going to make or break being able to retire, perhaps they aren't ready.

 

[GrayHare]

I don't worry about it. I have enough on my own plate without worrying about why other people keep working vs. retiring.

+1

 

[marko]

Maybe they just need an introduction to this forum. Lots of people have no clue how ER is possible or how to do it, despite all the 'experts' they sit with at Fido et. al.

They might have this magic number they think they need when they're already well beyond the threshold.

Regardless, none of anyone's business IMO

 

[Katiek]

People evaluate risk very differently and the same number can be either far too much, just enough or not nearly enough depending on who is doing the evaluation.



Plus you never know what else may be going on that you don't know.

 

[Mr. Tightwad]

Maybe they are better at hiding their spending than you know.

They could have made very bad investments. I know a guy who lost $4M

The savings they told you seems very tiny considering their income levels prior to him retiring.

Ages ago when I was working, a coworker who made exactly the same as me, couldn't understand how I could buy a condo while she had no money left at the end of each month. She had no clue where her money was going, could see the cumulative effect of restaurant eating 3x per week, etc.

I'd like to hear the $4M story.

 

[Gumby]

I don't worry about it. I have enough on my own plate without worrying about why other people keep working vs. retiring.

Very wise.

 

[Aerides]

Well I have noticed that people seem to misunderstand what they need.

And a lot of people "need" to work for their social/status/enjoyment. Not everyone hates it.

Back in 2009 I had to do layoffs. One woman was already in her early 60's and she had money and didn't mind telling people. She had investment properties, her DH had a very good pension, and she was also going to get a retiree pension and great healthcare as she was grandfathered into them. She got a great severance package as well.

Within a year, she was back as a contractor. I think the office was her favorite place to be.

 

[Stormy Kromer]

I FIRED at age 50 in 2015. My best friends are about 7-8 years older. They had much higher standards of living and envied my simple country style of living. 8 years later they're working to pay off the houses they built in their 60's. One hopes to retire at 70, the other hasn't thought about it yet.

They all had higher paying jobs than me.

I'm waiting for them to retire FILA (Financially Independent Late Arrival) so we can go fishing when they have time to go fishing.