Mother laid off without retirement savings

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Bwlonge
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Mother laid off without retirement savings

Post by Bwlonge » Thu Sep 26, 2019 7:36 pm

What can I do to help set my mom up for a reasonable 55+?

She worked for 25-30 years as one of the only employees for a small boiler distributor. Owner sold and retired, and my mom is laid off. She assures me she's getting some kind of severance, but even she knows its not guaranteed because there's nothing in writing.

In any case, she never saved for retirement and only just made her first IRA contributions last year. She lives a low expenses lifestyle in a rural suburb and she doesn't seem worried at all. She thinks she'll be able to easily find a job when she wants and she is fully expecting to work for a while longer and is looking forward to SS.

What can I do for this woman to help her manage her finances? I only recently came to find out just how unprepared she is with her finances, or at least unprepared compared to how I'm going about it. I just don't think she's prepared at all for end of life stuff and I want to get to a place where finances aren't going to be a concern over the next 20-30 years.

Goal33
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Re: Mother laid off without retirement savings

Post by Goal33 » Thu Sep 26, 2019 7:44 pm

Nothing she just needs another job.

If she owns a house help her make sure she decides to pay it off before she retires.

Ira contributions if any extra cash.

No debt, right?
A man with one watch always knows what time it is; a man with two watches is never sure.

CFM300
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Re: Mother laid off without retirement savings

Post by CFM300 » Thu Sep 26, 2019 7:46 pm

File for unemployment benefits.

123
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Re: Mother laid off without retirement savings

Post by 123 » Thu Sep 26, 2019 7:46 pm

She should explore potential unemployment benefits.

Since she worked for a small company it's probably a good idea for her to check her social security earnings record to ensure that all her earnings are posted. Sometimes small companies have difficulty reporting correctly and people who don't check may be surprised later on if there are missing periods of earnings.
The closest helping hand is at the end of your own arm.

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WoodSpinner
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Re: Mother laid off without retirement savings

Post by WoodSpinner » Thu Sep 26, 2019 7:46 pm

Not sure there is much you can do

Be part of her life, talk, have dinner, share adventures stay in contact. Be ready to help if you can. Let her set the pace and tone for what’s needed.

WoodSpinner

HomeStretch
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Re: Mother laid off without retirement savings

Post by HomeStretch » Thu Sep 26, 2019 7:57 pm

Your concern is understandable. But if your mom is not worried and plans to look for another job, then perhaps there is no need to worry just yet.

Investopedia quotes the Social Security Administration as saying 44% of single seniors rely on SS for 90% or more of their income. Your mom’s living expenses might be low enough that she can cover them with income from another job then after age 62 cover them with Social Security income plus maybe some part time work.

Help out however you can if she asks for your help.

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JoeRetire
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Re: Mother laid off without retirement savings

Post by JoeRetire » Thu Sep 26, 2019 8:06 pm

Bwlonge wrote:
Thu Sep 26, 2019 7:36 pm
e
What can I do for this woman to help her manage her finances?
Has she asked for your help?

Maybe you can help her file for unemployment. Maybe you can help her find a new job.
Very Stable Genius

Lalamimi
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Re: Mother laid off without retirement savings

Post by Lalamimi » Thu Sep 26, 2019 8:35 pm

I agree with the others, you can help her file for unemployment immediately, show her how to search for jobs (unemployment office has links usually) and offer support. I was laid off last year at 64. Nothing my kids could do but be supportive. Once she signs up, she may have to look for 3 or 4 jobs a week. Start with the company that acquired her old location. Maybe she has some connections from customers from there. Help her with resume, they have really changed the last few years. Take her to dinner or lunch, or take food over, to help her cut costs and for company.

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arcticpineapplecorp.
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Re: Mother laid off without retirement savings

Post by arcticpineapplecorp. » Thu Sep 26, 2019 8:44 pm

what will she do for health insurance? She's too young for medicare (and not disabled). Does your state have expanded medicaid? If so, encourage her to apply for that (it could be cheaper than buying it on the exchange or cobra).

With no income (for a time) she could qualify for food stamps. Could just be temporary (not likely if she gets unemployment compensation, but it depends on how much).

work for a while longer and then enjoy SS? She's only 55. At the earliest, she wouldn't qualify for another 7 years. And then, she'd be taking a permanently lower/reduction in SS amount which is not advised (she'd only get 70% of her full SS she'd be entitled to at age 67). So it'd be recommended she wait until at least her PIA (full retirement at 67) if not delayed credits, beyond age 67. That would be PIA at 67 for anyone born 1960 or after (she was born 1964 if she's 55, right?). source: https://www.ssa.gov/planners/retire/1960.html

So waiting til 67 means she has 12 more years to work. That's way to long to be thinking about/looking forward to SS.
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

make_a_better_world
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Re: Mother laid off without retirement savings

Post by make_a_better_world » Thu Sep 26, 2019 10:49 pm

I'm sure we each have different relationships with our mothers. With mine, it would be tough for me to know if she genuinely isn't worried or just doesn't want me to worry. I can only tell you what I would do:

Make sure she has a house that is paid off. You can help her pay it.
If she works, help her start auto-saving in a 401k if available and pick the funds. Make IRA contributions for her and let her save what she makes.
Make sure you're in a good enough financial place to be there for her down the line if needed.
I'd probably find out her cash balance and always make sure she has some minimum in there, including now.

California88
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Re: Mother laid off without retirement savings

Post by California88 » Thu Sep 26, 2019 11:02 pm

Maybe brush up on her skills - like taking a couple of computer classes at local colleges ... Microsoft Word, etc.

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SevenBridgesRoad
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Re: Mother laid off without retirement savings

Post by SevenBridgesRoad » Thu Sep 26, 2019 11:51 pm

I agree with the advice upthread. In addition, you might include in your financial planning the ability to provide at least some support for her in the coming years. My sibs and I provide almost total financial support for our mom. She didn't plan well at all.

At age 55, your mom may not be able to recover financially enough to cover her living expenses later in life.
Retired 2018 age 61 | "Not using an alarm is one of the great glories of my life." Robert Greene

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Nate79
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Re: Mother laid off without retirement savings

Post by Nate79 » Fri Sep 27, 2019 6:16 am

She still has 10-15 years of work ahead of her so she could still save a substantial amount of money.

jharkin
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Re: Mother laid off without retirement savings

Post by jharkin » Fri Sep 27, 2019 7:52 am

The reality is your mom just needs to keep working as long as she can. If anything encourage her to delay taking SS as long as she can and try to save as much as reasonable.

FWIW my mom is in her 70s, zero savings and still works. She also took SS immediately at 62 so its not really enough to live on when she cant work anymore. I've tried to offer advice in the past but she has made it clear she doesn't want to hear it so I stopped.

carolinaman
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Re: Mother laid off without retirement savings

Post by carolinaman » Fri Sep 27, 2019 8:03 am

SS covers most or all of retirement needs for many people. The system is skewed towards lower income folks. I am not sure what your mother's living expenses are, but SS may cover most of it.

I agree with others that she needs to keep working for now. Also, she should try to work to at least FRA so as to maximize her SS.

Topic Author
Bwlonge
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Re: Mother laid off without retirement savings

Post by Bwlonge » Fri Sep 27, 2019 8:40 pm

Thanks everyone, helping me worry a little less. My own goal has been being FI ASAP and I assume nothing from SS, so good to hear there's reason to be more optimistic in this case.

texasdiver
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Re: Mother laid off without retirement savings

Post by texasdiver » Sun Sep 29, 2019 2:08 pm

I agree with the others here. She needs to continue working until full retirement.

Meanwhile one think you can do is plan ahead to be a safety net in the future. When my wife and I shopped for our current house we specifically looked for houses that could accommodate a future MIL suite with a guest bedroom and bath on the main floor with no stairs. We have no immediate plans to use it as such. It's just a guest bedroom and extra bath for now as both our sets of parents are independent and doing fine financially. But there is some peace of mind in knowing that we are set up to take in an elderly parent some day down the road without needing to move or remodel.

We live in a fairly hilly area and a large number of houses we looked at had no bedrooms or full baths on the ground floor. Everything was either upstairs or downstairs in a basement level. So this criteria limited our options but we found a house we liked that met this criteria and are happy with it.

wolf359
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Re: Mother laid off without retirement savings

Post by wolf359 » Sun Sep 29, 2019 2:13 pm

Bwlonge wrote:
Fri Sep 27, 2019 8:40 pm
Thanks everyone, helping me worry a little less. My own goal has been being FI ASAP and I assume nothing from SS, so good to hear there's reason to be more optimistic in this case.
Keep on this track. The better off you are in terms of taking care of yourself, the more slack there will be so you have the additional resources to help out your Mom if needed. There will come a point where your Mom will be unable to work longer. However, you might be in a position to help out.

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tennisplyr
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Re: Mother laid off without retirement savings

Post by tennisplyr » Sun Sep 29, 2019 2:15 pm

Has she thought about medical insurance/expenses which can be appreciable.
Those who move forward with a happy spirit will find that things always work out.

montanagirl
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Re: Mother laid off without retirement savings

Post by montanagirl » Sun Sep 29, 2019 2:18 pm

California88 wrote:
Thu Sep 26, 2019 11:02 pm
Maybe brush up on her skills - like taking a couple of computer classes at local colleges ... Microsoft Word, etc.
If she's been front office then she probably knows this stuff. It's a good time to apply but it's all online now, please don't drop in etc. Our local job service was helpful with all that.

I took a bookkeeping class and at the time there seemed to be a lot of demand and I got a job at 68.

finite_difference
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Re: Mother laid off without retirement savings

Post by finite_difference » Sun Sep 29, 2019 2:21 pm

carolinaman wrote:
Fri Sep 27, 2019 8:03 am
I agree with others that she needs to keep working for now. Also, she should try to work to at least FRA so as to maximize her SS.
+1. 8% guaranteed return or something per year, so if able and willing to work that helps a lot!

Could offer to help cover expenses to make it easier to delay.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh

deikel
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Re: Mother laid off without retirement savings

Post by deikel » Sun Sep 29, 2019 3:17 pm

carolinaman wrote:
Fri Sep 27, 2019 8:03 am
SS covers most or all of retirement needs for many people. The system is skewed towards lower income folks. I am not sure what your mother's living expenses are, but SS may cover most of it.

I agree with others that she needs to keep working for now. Also, she should try to work to at least FRA so as to maximize her SS.
Do you have any evidence for these assumptions/political talking points ?

I assume you don't and I would encourage to read the SS website, which starts with this:

'If you start benefits
at “full retirement age” (see chart on page 7), this
percentage ranges from as much as 75 percent for very
low earners, to about 40 percent for medium earners, to
about 27 percent for high earners. If you start benefits
after full retirement age, these percentages would be
higher. If you start benefits earlier, these percentages
would be lower. Most financial advisers say you will
need about 70 percent of pre-retirement income to live
comfortably in retirement, including your Social Security
benefits, investments, and personal savings.'

Note that the majority of SS recipients starts at 62 (drawing early), so clearly the vast majority of recipients of SS are underfunded and SS is no where near enough to cover the 'needs of most people'
Everything you read in this post is my personal opinion. If you disagree with this disclaimer, please un-read the text immediately and destroy any copy or remembrance of it.

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whodidntante
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Re: Mother laid off without retirement savings

Post by whodidntante » Sun Sep 29, 2019 4:02 pm

Hopefully, she can find work quickly. She needs it. If not, unemployment, food stamps, housing assistance, and Medicaid should all be considered. Some people retire once their health fails, not because they have "enough."

3-20Characters
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Re: Mother laid off without retirement savings

Post by 3-20Characters » Sun Sep 29, 2019 4:49 pm

Financially speaking, there’s not much to advise as she has no assets to speak of. You say that “She lives a low expenses lifestyle in a rural suburb” but that doesn’t tell us her expenses, or how much SS she can count on, etc. Is the house paid off?

My best advice would be to get her expenses nailed down so you know her monthly number, find out what she can do about health insurance, and get signed up for unemployment benefits. As for a job, does she have a network of friends / ex-coworkers that can hook her up? The fact that she’s not worried could mean she has good prospects through friends or it could mean that she’s in shock or denial. In any case, she could be looking at low wage work for another 10 years—which won’t be as pleasant as her former long time gig.

InMyDreams
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Re: Mother laid off without retirement savings

Post by InMyDreams » Sun Sep 29, 2019 9:38 pm

Various groups may offer assistance to 50+ job seekers. I thought AARP had such a program, but you'll need to search their website. The state work force office (or whatever the term is in your state) may offer some training as well.

It must be a blow for her! I hope she can get a glowing letter of recommendation from her former employer, as well as his phone number to give to potential future employers when they call for references. She must have a lot of experience, and she may need help making her skills stand out in a resume. She may also need coaching about finding a new job in a world of online searching and applying.

Best wishes to you both.

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