People who don't save for retirement

[Anonymous]

Anonymous wrote:I will be working until I die. I can't afford to retire. That's for rich people.

Same. I have bills now. I'm not spending it on frivolous things or vacations.

[Anonymous]

Anonymous wrote:DH is from a small town in PA. All of his relatives live off of Medicare and SS. Their houses are paid off by the time they retire, but they were like 50k. None of them have any issue living within what they get from SS. It's not a great life, but they still can afford to eat out and a trip every once in a while. In small towns I think SS goes pretty far.

DH's grandma needed a nursing home for her last 3 months and medicaid paid for it. It wasn't "nice" and did have 3 to a room, but she wasn't left out in the cold. Frankly I think that's how medicaid should be. No frills, but you still get care.

Yes, I was going to respond to the other poster who said retirement accounts are the first savings vehicle. I suspect the first savings vehicle is home equity.

Once you have a paid off house, expenses can be very low.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Those stats might not be accurate. Average 401k balance doesn’t mean total net worth.

I have a Roth IRA with only $7000 in it and another IRA with 60k. One of my 401k’s has 120k. Total net worth is in the millions.

But why didn't you take advantage of tax free growth for years?

I only directly contributed $2k to my Roth when I was in my mid 20’s and low earning. As soon as I became high earning I’m no longer eligible. I currently do a mega backdoor Roth 401k and contribute 20k a year into that. I could do a normal backdoor conversion to my IRA but I’m too lazy.

So why didn't you do a Roth until you got over the $160K+ and why didn't you do a reg Ira after taxes once Roth wasn't available. I too have a "small Roth" of $40k because it was only a few years i could contribute but I have a $400k+ Ira that is solely from Ira (not any rollover 401k --have about $500k for that and I haven't worked in 25 years (not yet 60)

But I get tax free growth for years by doing so

[Anonymous]

My mother, who is 78, is still working. She just historically makes so many horrible financial decisions, one after the other.

She does own a few properties other than her home and she has finally agreed to sell one. I am supporting her because I don't want her on the street (she was living in a hotel recently) but I gave her an ultimatum to sell a vacant rental property because I can't afford to keep floating her. She also cashed in some stock that she inherited from my father when he died.

[Anonymous]

Anonymous wrote:My mother, who is 78, is still working. She just historically makes so many horrible financial decisions, one after the other.

She does own a few properties other than her home and she has finally agreed to sell one. I am supporting her because I don't want her on the street (she was living in a hotel recently) but I gave her an ultimatum to sell a vacant rental property because I can't afford to keep floating her. She also cashed in some stock that she inherited from my father when he died.

If she is living in a hotel while her rental property sits empty, I'd worry about her mental acuity at this point.

[Anonymous]

I know many immigrants who came to the U.S. later in life to be with their adult kids.
They have section 8, SSI and Medicaid. Their adult kids help them with food and other essentials. They manage to save part of their SSI and their kids usually inherit a bunch of cash.

The worst situation is when someone works all their life and gets SS that is too high for Medicaid and other benefits but not enough to get by. I feel bad for Americans who are in this predicament.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My mother, who is 78, is still working. She just historically makes so many horrible financial decisions, one after the other.

She does own a few properties other than her home and she has finally agreed to sell one. I am supporting her because I don't want her on the street (she was living in a hotel recently) but I gave her an ultimatum to sell a vacant rental property because I can't afford to keep floating her. She also cashed in some stock that she inherited from my father when he died.

If she is living in a hotel while her rental property sits empty, I'd worry about her mental acuity at this point.

PP said she is prone to bad financial decisions, of course her mental acuity was never great to begin with!

[Anonymous]

My dad and his wife collectively bring in $4000 per month in SS. They have minimal savings and a paid-off house in a MCOL area. They are ok on $4000 per month now but their age gap is 10 years. If one of them dies, SS goes down to $2000 per month and that’s when things will get ugly.

Their options are: sell the house and move in with dad’s sibling and thereby pool SS three ways. Rent out the house and move in with the sibling, or somewhere else LCOL, and live off SS plus rental income. Live on $4000 and hope no one dies for a long time.

My mom is single and her SS is even lower. She has zero savings and has unwisely refinanced her house (purchased for $20K in 1990) over and over. She works part time. Any dollar she earns she spends. When I was a kid, she’d pocket my birthday money. When I was a teenager, she emptied my savings account.

Unfortunately I am not rolling in cash and live far away. I have kids, some student loans, and an underfunded retirement account. I can’t afford to help them unless my plan is to depend on my kids when I’m old.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Those stats might not be accurate. Average 401k balance doesn’t mean total net worth.

I have a Roth IRA with only $7000 in it and another IRA with 60k. One of my 401k’s has 120k. Total net worth is in the millions.

But why didn't you take advantage of tax free growth for years?

I only directly contributed $2k to my Roth when I was in my mid 20’s and low earning. As soon as I became high earning I’m no longer eligible. I currently do a mega backdoor Roth 401k and contribute 20k a year into that. I could do a normal backdoor conversion to my IRA but I’m too lazy.

So why didn't you do a Roth until you got over the $160K+ and why didn't you do a reg Ira after taxes once Roth wasn't available. I too have a "small Roth" of $40k because it was only a few years i could contribute but I have a $400k+ Ira that is solely from Ira (not any rollover 401k --have about $500k for that and I haven't worked in 25 years (not yet 60)

But I get tax free growth for years by doing so

Income climbed quickly and I couldn’t really spare the few thousand a year back then

[Anonymous]

Anonymous wrote:

Anonymous wrote:My mother, who is 78, is still working. She just historically makes so many horrible financial decisions, one after the other.

She does own a few properties other than her home and she has finally agreed to sell one. I am supporting her because I don't want her on the street (she was living in a hotel recently) but I gave her an ultimatum to sell a vacant rental property because I can't afford to keep floating her. She also cashed in some stock that she inherited from my father when he died.

If she is living in a hotel while her rental property sits empty, I'd worry about her mental acuity at this point.

I already worry about that, but you cannot force someone to make better decisions. I’ve tried all of my adult life. She was sleeping on a blow out mattress in the vacant house (because her main house had no heat) but eventually went to a hotel. She now has heat and is back in her main house but while her heat was out her pipes froze and now she has no water. She is dragging her feet getting it fixed. So this is what I deal with and probably better for a separate thread. So in summary, there are people out there who have no retirement savings.

[Anonymous]

Anonymous wrote:I will be working until I die. I can't afford to retire. That's for rich people.

Actually, rich people don’t retire, they keep working. People who dream about retirement are poor people with bad jobs.

[Anonymous]

Anonymous wrote:I know many immigrants who came to the U.S. later in life to be with their adult kids.
They have section 8, SSI and Medicaid. Their adult kids help them with food and other essentials. They manage to save part of their SSI and their kids usually inherit a bunch of cash.

The worst situation is when someone works all their life and gets SS that is too high for Medicaid and other benefits but not enough to get by. I feel bad for Americans who are in this predicament.

l don’t understand your statement about the worst situation. Don’t retirees 65+ regardless of income get Medicare? If someone chooses to retire early they didn’t “work all their life” - why do you feel bad for them?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Those stats might not be accurate. Average 401k balance doesn’t mean total net worth.

I have a Roth IRA with only $7000 in it and another IRA with 60k. One of my 401k’s has 120k. Total net worth is in the millions.

But why didn't you take advantage of tax free growth for years?

I only directly contributed $2k to my Roth when I was in my mid 20’s and low earning. As soon as I became high earning I’m no longer eligible. I currently do a mega backdoor Roth 401k and contribute 20k a year into that. I could do a normal backdoor conversion to my IRA but I’m too lazy.

So why didn't you do a Roth until you got over the $160K+ and why didn't you do a reg Ira after taxes once Roth wasn't available. I too have a "small Roth" of $40k because it was only a few years i could contribute but I have a $400k+ Ira that is solely from Ira (not any rollover 401k --have about $500k for that and I haven't worked in 25 years (not yet 60)

But I get tax free growth for years by doing so

Income climbed quickly and I couldn’t really spare the few thousand a year back then

Ok, but why no regular Ira? It still grows tax free

[Anonymous]

Anonymous wrote:

Anonymous wrote:I will be working until I die. I can't afford to retire. That's for rich people.

Same. I have bills now. I'm not spending it on frivolous things or vacations.

And if you don't want to work until you die, you need to find a way to reduce expenses. Or increase income, but you need a budget that includes some retirement planning.

[Anonymous]

My mom had a pension and social security. She paid for all her bills like rent, utilities, groceries. But I paid for extras like her cable subscription, newspaper subscription, and took her out to dinner/brunch once a week once she moved near us when I had my daughter. I think that is what lots of middle class families do.