What happens to people who saved nothing for retirement?

[Anonymous]

We're heading in a few decades toward a situation where there will be many homeless elderly people on the streets, man and women. No one will bat an eye, either. These homeless elderly people either had no children, or didn't value developing strong, close, positive relationships with their children, and are now navigating old age all alone. If you don't have the money, you'll end up on the streets. Elderly care is expensive.

[Anonymous]

This is my parents. They live off their SS and my mom's meager 401k. My dad always had blue collar jobs without any benefits or 401k matching. My mom always had office jobs for insurance and 401k matching, but she never got to max out the matching potential because we were a paycheck-to-paycheck family.

They were never able to buy a house so they still pay rent. They left the NOVA area this past spring when their 1 bedroom apartment rent jumped to $2175. I think my mom gets around $1600/mo and my dad around $1100/mo in SS. They owe back taxes too so some of the SS money gets pulled automatically each month to pay towards taxes.

They now live in Southern VA in a lower COL area. The apartment they rent now is 2 bedrooms for $800-something/month. They are much happier down there. I wish I could have afforded to keep them in this area because all of my dad's doctors up here are amazing, but it is what it is. My therapist helped me realize that if I didn't put myself first thing I'd end up in the same place as them in the future. I needed to break the cycle. It's very hard.

[Anonymous]

Anonymous wrote:I just looked up the social security estimator recently and we are going to get 70k with only 25 yr of work history. Our house is paid off and we are quite frugal,
so the SS alone would cover a big portion of our expenses even though we also have 5m in retirement savings.

Watch out on the calculator. I find the SSA calcs quite deceiving.

Ultimately, SSI requires 40 quarters for base eligibility. But for calculating your total benefit, it looks at your highest 35 years.

I have 23 years of work history, though 6 were very low (25k in my post-college years). I've maxed out my contributions since.

Annoyingly, the SSA calculators force you into two buckets: (i) work until age 67 based on your current income and then start pulling SSI; or (ii) stop working on a prior date, and the calculator assumes you start pulling SSI on the earlier date (no earlier than age 62). In my case, i would like to retire by 50 or 55, so less than the full 35 years. If i plug into the calculator a retirement date at age 50, it's only 30 years of income plus 5 years of $0 income pulling down the average, and then it has me drawing on SSI at age 62, so a much lower number (in my case $2400).

The alternative is to use a retirement age of 67 in the calculator, but that means it assumes i continue to make $200k+ every year until i'm 67. Because several of my years in my 20s were well below $100k, the calculator relies on those $200k+ years in my 60s to provide me with my expected benefit of $3700.

What the calculator does not permit is choosing a retirement date now, but draw at age 67.

In the PP's case, if it is telling you you are both eligible for $3000 per month, i'm guessing the calculator option you used has you continuing to work until age 67. And that, if you retired tomorrow, you would not be eligible for $3000 per month, either at age 62 or 67. You have to keep working at your current income to stay on target for that number.

[Anonymous]

Anonymous wrote:I have about $150k and am 46. I will never retire. I'll work until I drop dead.

What? I can turn that money into a million in under ten years.

[Anonymous]

Anonymous wrote:We're heading in a few decades toward a situation where there will be many homeless elderly people on the streets, man and women. No one will bat an eye, either. These homeless elderly people either had no children, or didn't value developing strong, close, positive relationships with their children, and are now navigating old age all alone. If you don't have the money, you'll end up on the streets. Elderly care is expensive.

This is the biggest load of crap I've heard in a while.

1. Children have zero obligation to take care of you at any time regardless of how nice you were (or more likely think you were) to them. Children don't get to make the decision to exist, so when you make the decision to bring them into existence the onus of you providing for them falls 100% on you and 0% the other way around. Children can certainly choose to support parents but if they do not it is not a failing of obligations, a failing of morals, or anything else. You don't get to throw someone into a life sentence prison term against their will and have the audacity to say I fed and clothed you, provided you a cell, now you owe me for everything I did for you!

2. Children cost about a quarter million dollars apiece to raise to 18. Anyone who decides not to have children had automatically given themselves the biggest leg up for a healthy retirement imaginable. You're acting like not having kids is automatically dooming yourself to a life of poverty, but I'll tell you the same thing I tell everyone who asks me "you aren't having kids? who will take care of you in your old age?" The person I hire to take care of me with all the money I saved not having kids, that's who.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I have about $150k and am 46. I will never retire. I'll work until I drop dead.

What? I can turn that money into a million in under ten years.

You can average 21%+ gains YOY for a decade straight?

Mmhmm, sure you can. Taking a break from your job at Renaissance Technologies to help out the plebs?

[Anonymous]

Anonymous wrote:The person I hire to take care of me with all the money I saved not having kids, that's who.

AI-powered assistants and humanoid robots will be part of our daily lives and quite affordable.

[Anonymous]

My MIL is in this situation in her early 70s and she is thriving!
+ She inherited a fully paid off house from her mother in a HCOL area
+ She moved in with her best friend into this
house and they split expenses. Her best friend has her own paid off condo in the same HCOL area that they could rent for cashflow, but right now they don't even rent it out. They both enjoy the companionship of living together and frequently hosts friend together etc.
+ She has a long-time therapy practice that she enjoys and maintains on a very scaled back schedule (10-20 hours a week). I think she gets a decent high five figure income from this (much of it directly in cash) but she doesn't prioritize saving for retirement.
+ She does not save anything for retirement and plans to work on her current schedule as long as possible by choice but maybe also necessity?
+ She travels a ton, has a better social life than we do, and seems to have a lot of leisure time. Honestly it seems like a great life despite her having made very different choices than I would.

[Anonymous]

Anonymous wrote:We're heading in a few decades toward a situation where there will be many homeless elderly people on the streets, man and women. No one will bat an eye, either. These homeless elderly people either had no children, or didn't value developing strong, close, positive relationships with their children, and are now navigating old age all alone. If you don't have the money, you'll end up on the streets. Elderly care is expensive.

No, we have social programs for elderly people to provide them with a basic standard of living.

[Anonymous]

Anonymous wrote:My MIL is in this situation in her early 70s and she is thriving!
+ She inherited a fully paid off house from her mother in a HCOL area
+ She moved in with her best friend into this
house and they split expenses. Her best friend has her own paid off condo in the same HCOL area that they could rent for cashflow, but right now they don't even rent it out. They both enjoy the companionship of living together and frequently hosts friend together etc.
+ She has a long-time therapy practice that she enjoys and maintains on a very scaled back schedule (10-20 hours a week). I think she gets a decent high five figure income from this (much of it directly in cash) but she doesn't prioritize saving for retirement.
+ She does not save anything for retirement and plans to work on her current schedule as long as possible by choice but maybe also necessity?
+ She travels a ton, has a better social life than we do, and seems to have a lot of leisure time. Honestly it seems like a great life despite her having made very different choices than I would.

I love the idea of a Golden Girls-type setup in my 70s and beyond in a nice house with multiple master bedrooms. It sounds fabulous. I hope I can find like-minded girlfriends who would make good roommates.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We're heading in a few decades toward a situation where there will be many homeless elderly people on the streets, man and women. No one will bat an eye, either. These homeless elderly people either had no children, or didn't value developing strong, close, positive relationships with their children, and are now navigating old age all alone. If you don't have the money, you'll end up on the streets. Elderly care is expensive.

No, we have social programs for elderly people to provide them with a basic standard of living.

Lol, we can't even house our homeless. How the hell do you think we'll have enough beds for all of them when they're old PLUS all the currently housed middle-aged people who will become elderly and too unwell to work and will need housing? Your math isn't mathing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We're heading in a few decades toward a situation where there will be many homeless elderly people on the streets, man and women. No one will bat an eye, either. These homeless elderly people either had no children, or didn't value developing strong, close, positive relationships with their children, and are now navigating old age all alone. If you don't have the money, you'll end up on the streets. Elderly care is expensive.

No, we have social programs for elderly people to provide them with a basic standard of living.

Lol, we can't even house our homeless. How the hell do you think we'll have enough beds for all of them when they're old PLUS all the currently housed middle-aged people who will become elderly and too unwell to work and will need housing? Your math isn't mathing.

Taxes. We're not, as a nation, going to let mentally stable elderly people go homeless.

[Anonymous]

I’m a nanny, and if it wasn’t for my mum, I’d be completely screwed. I am 48, paid legally, so at least I’ll get social security. My mum bought me a condo 10 years ago (currently worth 500k) and I have about 100k in savings. I live in an extremely HCOL city in California and even with my condo paid off, it’s hard to get by. My mum is planning to leave me half her estate, worth about 2 million. I know that after taxes, it won’t be enough to retire, but I’m so grateful if I’ll be able to get 500-600k from my mum. I have a learning disability and never graduated college (tried and flunked out 5 times) so nannying is really the only job I can do that pays well. I love kids, so is a great job, but sadly doesn’t pay well. I’ll work as long as families will hire me. I plan to retire in North Carolina or Mexico, because I can’t afford California.

[Anonymous]

Anonymous wrote:I’m a nanny, and if it wasn’t for my mum, I’d be completely screwed. I am 48, paid legally, so at least I’ll get social security. My mum bought me a condo 10 years ago (currently worth 500k) and I have about 100k in savings. I live in an extremely HCOL city in California and even with my condo paid off, it’s hard to get by. My mum is planning to leave me half her estate, worth about 2 million. I know that after taxes, it won’t be enough to retire, but I’m so grateful if I’ll be able to get 500-600k from my mum. I have a learning disability and never graduated college (tried and flunked out 5 times) so nannying is really the only job I can do that pays well. I love kids, so is a great job, but sadly doesn’t pay well. I’ll work as long as families will hire me. I plan to retire in North Carolina or Mexico, because I can’t afford California.

You know a $2 million inheritance wouldn’t be taxed, right?

[Anonymous]

Anonymous wrote:

Anonymous wrote:My 78 year old MIL works part time in the dressing room at Target. She says she does it because she likes interacting with people every day, and I think she does, but I also think it’s the only thing that supplements her SS and she gets a discount on groceries.

There are a lot of studies out there that those who keep working live longer.

I have healthy retirement savings but DH and I both plan to die at the office. At 105.