People who don't save for retirement

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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?

NP. The PP didn't articulate it well, but there are a lot of retirees who have too many assets to qualify for Medicaid (which is different than Medicare) but need long-term nursing home care. These people need to spend down all their assets until they qualify for Medicaid. Working hard all your life to amass modest savings to then fork it over to the nursing home is painful. There are ways to get around this if you plan ahead of time, but most people don't.

How do you get around it?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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?

NP. The PP didn't articulate it well, but there are a lot of retirees who have too many assets to qualify for Medicaid (which is different than Medicare) but need long-term nursing home care. These people need to spend down all their assets until they qualify for Medicaid. Working hard all your life to amass modest savings to then fork it over to the nursing home is painful. There are ways to get around this if you plan ahead of time, but most people don't.

How do you get around it?

https://www.medicaidplanningassistance.org/asset-protection-trusts/

[Anonymous]

Anonymous wrote:

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?

I said Medicaid not Medicare.
If you are low income you qualify for Medicaid and then your Medicare is free too (no premium) and you can get caregiver hours and “hire” someone to care for you. If you hire your own relative, the income stays in the family.

I feel bad for people who spent their lives working low paid jobs and their SS is above that Medicaid threshold but too low to live comfortably. Say, they get $2000 and the cutoff for Medicaid is $1800. Some states have workarounds for that but some don’t.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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?

NP. The PP didn't articulate it well, but there are a lot of retirees who have too many assets to qualify for Medicaid (which is different than Medicare) but need long-term nursing home care. These people need to spend down all their assets until they qualify for Medicaid. Working hard all your life to amass modest savings to then fork it over to the nursing home is painful. There are ways to get around this if you plan ahead of time, but most people don't.

Maybe I didn’t articulate it well but you are talking about something entirely different, the assets. I am talking about income, like monthly SS benefit.
Assets are another problem but it’s easier to solve, just deed your house to your kids while still healthy, done.
However your ss benefit is what it is.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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?

NP. The PP didn't articulate it well, but there are a lot of retirees who have too many assets to qualify for Medicaid (which is different than Medicare) but need long-term nursing home care. These people need to spend down all their assets until they qualify for Medicaid. Working hard all your life to amass modest savings to then fork it over to the nursing home is painful. There are ways to get around this if you plan ahead of time, but most people don't.

How do you get around it?

The rich people way is setting up a special trust. The poor people way (popular with immigrants) is gifting one’s assets to the kids.
There is a look back period but if you do it early enough you can beat it.

[Anonymous]

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.

Really most people don’t have net worths in the millions.

[Anonymous]

Anonymous wrote:Everytime I look up what I should have saved up, I get stats on what the average American actually has. And they don’t have much. So what do all these people actually do when they reach their 60s and 70s?

I think about 8% of adults aged 50-65 already are living off of SSI or SSDI, which isn't a large benefit to begin with. So if they do not have any retirement savings or pension income coming in, they will just continue to live off of their Social Security monthly benefit.

In other cases, they continue working perhaps under the table, provide baby sitting for family members, move in with kids. Or if they have a paid off house or trailer, they allow kids, nieces and nephews or others to move in with them to have a free place to live. The younger generation hopefully can help with expenses.

If they are low-income and over 65, they can qualify for assistance with food (SNAP) and sometimes utilities.

[Anonymous]

Under 65 quantify for snap as well if they are low income.
There are some work rules that are starting this year, but there are workarounds depending on the state

[Anonymous]

Based on the small sample of my parents/their friends, they didn't need huge retirement savings because:
1. They paid $40-50K for the homes where they raised their kids in the 80s-90s and sold for $400K+ ten years ago. And most had been paid off for a long time before they sold.
2. They took the money and bought a smaller place in a lower COL area. No mortgage and their taxes and utilities plummeted.
3. Many of them have pensions from jobs, military, etc. So they add that to SS, they can cover their bills.
4. A few of them inherited some money/homes from their parents--none are rich off of that but it helped.
5. They aren't paying for the kinds of things we are in our 40s/50s raising kids--no college savings, summer camps, sports dues, etc.
6. They have no commuting costs--yes, they have to pay for gas but only if they want to go somewhere. Most of their social activities take place within 5 miles of their homes. And their cars last longer because they don't use them as much.
7. When they go out to eat, they go during the day for the lunch specials and cook simple meals for dinner. So much less expensive and they can sit and chat for awhile because restaurants aren't itching to get them out the door at 2pm.
8. They can travel on off times and aren't stuck going on vacation during the small windows of school breaks.
9. In addition to their primary homes, many also had small vacation homes that they bought for under $50K and are now worth 5-10x that. A lot of them moved into the vacation homes that, again, they had paid off well before they retired.

The short answer is, they didn't need a lot of retirement savings because they don't have a lot of expenses. And they held their assets elsewhere.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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?

NP. The PP didn't articulate it well, but there are a lot of retirees who have too many assets to qualify for Medicaid (which is different than Medicare) but need long-term nursing home care. These people need to spend down all their assets until they qualify for Medicaid. Working hard all your life to amass modest savings to then fork it over to the nursing home is painful. There are ways to get around this if you plan ahead of time, but most people don't.

How do you get around it?

Isn’t the point of working and saving for retirement to have money to care for your care as you age? You pay for that care with the money you earned. Why should the government pay for care when someone has the money to pay for it?

[Anonymous]

Anonymous wrote:Based on the small sample of my parents/their friends, they didn't need huge retirement savings because:
1. They paid $40-50K for the homes where they raised their kids in the 80s-90s and sold for $400K+ ten years ago. And most had been paid off for a long time before they sold.
2. They took the money and bought a smaller place in a lower COL area. No mortgage and their taxes and utilities plummeted.
3. Many of them have pensions from jobs, military, etc. So they add that to SS, they can cover their bills.
4. A few of them inherited some money/homes from their parents--none are rich off of that but it helped.
5. They aren't paying for the kinds of things we are in our 40s/50s raising kids--no college savings, summer camps, sports dues, etc.
6. They have no commuting costs--yes, they have to pay for gas but only if they want to go somewhere. Most of their social activities take place within 5 miles of their homes. And their cars last longer because they don't use them as much.
7. When they go out to eat, they go during the day for the lunch specials and cook simple meals for dinner. So much less expensive and they can sit and chat for awhile because restaurants aren't itching to get them out the door at 2pm.
8. They can travel on off times and aren't stuck going on vacation during the small windows of school breaks.
9. In addition to their primary homes, many also had small vacation homes that they bought for under $50K and are now worth 5-10x that. A lot of them moved into the vacation homes that, again, they had paid off well before they retired.

The short answer is, they didn't need a lot of retirement savings because they don't have a lot of expenses. And they held their assets elsewhere.

People like this are well above the median American in income and assets. Your sample is tilted by who your parents are friends with.

[Anonymous]

I used to manage a couple of people who worked way too long because they had to. One issue affecting both of them was having to give half their pension and/or SS to an ex after divorce. I think this affects many people and leaves them with much less in old age.

[Anonymous]

Anonymous wrote:Based on the small sample of my parents/their friends, they didn't need huge retirement savings because:
1. They paid $40-50K for the homes where they raised their kids in the 80s-90s and sold for $400K+ ten years ago. And most had been paid off for a long time before they sold.
2. They took the money and bought a smaller place in a lower COL area. No mortgage and their taxes and utilities plummeted.
3. Many of them have pensions from jobs, military, etc. So they add that to SS, they can cover their bills.
4. A few of them inherited some money/homes from their parents--none are rich off of that but it helped.
5. They aren't paying for the kinds of things we are in our 40s/50s raising kids--no college savings, summer camps, sports dues, etc.
6. They have no commuting costs--yes, they have to pay for gas but only if they want to go somewhere. Most of their social activities take place within 5 miles of their homes. And their cars last longer because they don't use them as much.
7. When they go out to eat, they go during the day for the lunch specials and cook simple meals for dinner. So much less expensive and they can sit and chat for awhile because restaurants aren't itching to get them out the door at 2pm.
8. They can travel on off times and aren't stuck going on vacation during the small windows of school breaks.
9. In addition to their primary homes, many also had small vacation homes that they bought for under $50K and are now worth 5-10x that. A lot of them moved into the vacation homes that, again, they had paid off well before they retired.

The short answer is, they didn't need a lot of retirement savings because they don't have a lot of expenses. And they held their assets elsewhere.

And now most of us in our 50s don't have pensions, even federal pensions are just a small percentage of what they were.

Most of us have had to move to get jobs, so paid the same higher prices for houses that younger people did (although not as much as they are selling for now.)

Our retirement is mostly tied to the stock market.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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?

NP. The PP didn't articulate it well, but there are a lot of retirees who have too many assets to qualify for Medicaid (which is different than Medicare) but need long-term nursing home care. These people need to spend down all their assets until they qualify for Medicaid. Working hard all your life to amass modest savings to then fork it over to the nursing home is painful. There are ways to get around this if you plan ahead of time, but most people don't.

How do you get around it?

Isn’t the point of working and saving for retirement to have money to care for your care as you age? You pay for that care with the money you earned. Why should the government pay for care when someone has the money to pay for it?

Exactly!

And don't expect "Cadillac care" if you didn't manage to save. That's for people who planned accordingly

[Anonymous]

Anonymous wrote:I used to manage a couple of people who worked way too long because they had to. One issue affecting both of them was having to give half their pension and/or SS to an ex after divorce. I think this affects many people and leaves them with much less in old age.

SS is never given to an ex, at least not directly.
Maybe it’s used to cover their settlement agreement amount but they need to go to court and review it.
Workaholics or those who are afraid to become irrelevant if they stop working often use it as an excuse.
They either “have to pay their ex wife” or “have to support their young adult kids”.