What really happens to people who run out of their money in retirement

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
littlebird
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Location: Valley of the Sun, AZ

Re: What really happens to people who run out of their money in retirement

Post by littlebird » Sun Jul 24, 2016 10:50 am

reneeh63 wrote:My fear is to get old and have dementia set in and not know WTH is going on around me - with no family or partner.


A solution for you, if you can possibly afford it, might be to move to a continuing care community (independent living>assisted living>skilled nursing) as early as feasible, before any disqualifying chronic disease symptoms appear. (Not implying that you're going to actually develop any, it's just that you may not be accepted if you're not going to have several years of living in the lower-cost independent living level)

joebh
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Re: What really happens to people who run out of their money in retirement

Post by joebh » Sun Jul 24, 2016 11:34 am

Shallowpockets wrote:We all save to preempt that sort of situation, but short of not having our life continue in normal comfortable means, we might have to do with a less than an optimal lifestyle. Not the end of the world.


I suppose that depends on what you think would be "the end of the world".

Relying solely on the kindness of family, friends and/or charity might be pretty bad for some folks used to living independently.

And unfortunately, we don't "all save to preempt that sort of situation". Some have nothing at all saved in their later years, no assets, little or no social security, and are reliant on poverty-level assistance to get by.

Maybe that's just something "less than optimal" or maybe it's much sadder than that.

It depends on your hopes and expectations for life.

frugalecon
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Re: What really happens to people who run out of their money in retirement

Post by frugalecon » Tue Jul 26, 2016 10:48 am

I have a friend who has now run out of money before retirement. He is 64, has been unemployed for > 2.5 years, is flat broke with no assets other than an 18 year old car, and lives in a HCOL area (though with a rent-controlled apartment). He has scraped by the last few months with help from family and friends, including me, but that is not a long-term solution. My fear is that he is effectively unemployable now, in part because he had a spotty work history to begin with and he has trouble getting along with people in positions of authority over him. I think his best case scenario is part-time work supplemented by early Social Security, as long as he can work, and then reliance on social safety net programs. I feel really bad for him, because it seems like his life is going to be pretty tough from here on out.

Engineer250
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Re: What really happens to people who run out of their money in retirement

Post by Engineer250 » Tue Jul 26, 2016 6:32 pm

frugalecon wrote:I have a friend who has now run out of money before retirement. He is 64, has been unemployed for > 2.5 years, is flat broke with no assets other than an 18 year old car, and lives in a HCOL area (though with a rent-controlled apartment). He has scraped by the last few months with help from family and friends, including me, but that is not a long-term solution. My fear is that he is effectively unemployable now, in part because he had a spotty work history to begin with and he has trouble getting along with people in positions of authority over him. I think his best case scenario is part-time work supplemented by early Social Security, as long as he can work, and then reliance on social safety net programs. I feel really bad for him, because it seems like his life is going to be pretty tough from here on out.


The HCOL and trouble getting along with people above him...I think I know this guy. Actually the guy I know owns a condo (I assume paid off), and had a small 401k to tap into in addition to SS so is doing okay. He is a friend but I'm not sure I'd financially help someone who couldn't put pride aside to get a job due to thinking they know better than their bosses etc.
Where the tides of fortune take us, no man can know.

mouses
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Re: What really happens to people who run out of their money in retirement

Post by mouses » Tue Jul 26, 2016 6:53 pm

scone wrote:What happens if you have Alzheimer's, no family, and no money?


You wind up sleeping under a bridge. Or in a shelter where you are preyed upon.

mouses
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Re: What really happens to people who run out of their money in retirement

Post by mouses » Tue Jul 26, 2016 7:02 pm

coachz wrote:Meds are often the first to go with many costing over $1000 a month.


Yeah, really. I am forking out about $800 a month. And a lot of that is drastic price increases for meds that have been around for years. The manufacturers raise the prices, and the Medicare Plan D people toss them into higher tiers. This is crazy, which is a polite word for it.

TerryDMillerMBA
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Re: What really happens to people who run out of their money in retirement

Post by TerryDMillerMBA » Tue Jul 26, 2016 7:14 pm

Katietsu wrote:If you are still able to live alone, you move into senior citizen subsidized housing. Your rent is capped at 1/3 of your income and includes utilities. You sign up for Medicare "extra help" and PACE which takes care of your medical costs. You sign up for free or reduced cost meal delivery or meals at the Senior Center. You sign up for free transportation to the Senior Center and doctors' appointments. Now you have got food, shelter and healthcare, and essential transportation taken care of. You sign up for SafeLink for free phone service. Most facilities also have social workers and volunteers to provide activity programs.

In the next stage, there are a limited number of programs that can provide housekeeping and caregiving or subsidize assisted living.

Finally, you end up on Medicaid in a nursing home. Your lack of funds may reduce your options for more moderate assistance and lead you to the home sooner than otherwise.

But, yes, our safety net for seniors exceeds that for the rest of the population.


From experience with work and some family members, I know this post is EXACTLY how it goes down. Exactly.

(My only quibble is the SafeLink thing is one brand name; the actual program is called Lifeline, (and was in place even before cell phones were very popular -- 1985. It started with basic landline phone service).

frugalecon
Posts: 228
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Re: What really happens to people who run out of their money in retirement

Post by frugalecon » Tue Jul 26, 2016 7:28 pm

Engineer250 wrote:
frugalecon wrote:I have a friend who has now run out of money before retirement. He is 64, has been unemployed for > 2.5 years, is flat broke with no assets other than an 18 year old car, and lives in a HCOL area (though with a rent-controlled apartment). He has scraped by the last few months with help from family and friends, including me, but that is not a long-term solution. My fear is that he is effectively unemployable now, in part because he had a spotty work history to begin with and he has trouble getting along with people in positions of authority over him. I think his best case scenario is part-time work supplemented by early Social Security, as long as he can work, and then reliance on social safety net programs. I feel really bad for him, because it seems like his life is going to be pretty tough from here on out.


The HCOL and trouble getting along with people above him...I think I know this guy. Actually the guy I know owns a condo (I assume paid off), and had a small 401k to tap into in addition to SS so is doing okay. He is a friend but I'm not sure I'd financially help someone who couldn't put pride aside to get a job due to thinking they know better than their bosses etc.


Yes, it is hard to help someone who just refuses to suck it up and do what needs to be done. I have offered help at key points of need for him, but I don't anticipate being very accommodating in the future. I will offer advice, but probably no more cash. Unfortunately, no strings cash is usually more welcome than advice.

Barefootgirl
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Re: What really happens to people who run out of their money in retirement

Post by Barefootgirl » Wed Jul 27, 2016 12:23 pm

I live and work in a state that is pro-business, conservative, moderate in overall taxation and with a lower than average jobless rate. This is good during one's working years - looking back over this thread, I am wondering if it wouldn't be a good idea - if the day were to arrive - when one has depleted their resources and needs care - to consider those states that cast wider and deeper safety nets - provided there are no intervening issues - such as proximity to relatives....hmmm. So, perhaps a person who is close to running out of money in old age would be better off in a generous state, in a rural area of that state where the local population is incented to want to keep their jobs and keep the operation going.

I've heard of people moving for welfare benefits, so I guess this is similar....
How many retired people does it take to screw in a lightbulb? Only one, but he takes all day.

WasabiOsbourne
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Re: What really happens to people who run out of their money in retirement

Post by WasabiOsbourne » Wed Jul 27, 2016 12:44 pm

interesting subject...

i think people adjust their spending to their income very well......... and as mentioned, government ensures your income isn't zero.

reminds me of "where did all the criminals and panhandlers from NYC go when guiliani cleaned up?"

bhsince87
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Re: What really happens to people who run out of their money in retirement

Post by bhsince87 » Wed Jul 27, 2016 12:47 pm

I know quite a few retirees who live on Social Security alone, with some assistance from other government programs.

I also have a family member who gets NO Social Security. She's 84 or 85. She worked as a part time care giver until she was about 75.

She owns her house and lives there. In theory, she could get a reverse mortgage, but she wants to leave it to her children. In return, they pay for maintenance, taxes and electricity. She gets food stamps, free phone, Medicaid, etc., and that seems to be enough for her to live on.
BH87

couponhead
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Re: What really happens to people who run out of their money in retirement

Post by couponhead » Tue Aug 09, 2016 10:02 pm

SouthernCPA wrote:I believe you don't see many instances of elderly (80 y/o+) homeless people on the streets because those that started out homeless earlier in life, probably don't live that long. Those that had traditional retirement vehicles, SS, etc just get used to living on a reduced lifestyle as their supply dwindles.

I have no problem with SS as it was setup to be an insurance policy for situations like this. I've seen the finances of many elderly people and I think you'd be surprised at what the reality is for a "nest egg" that a lot of people retire on vs what bogleheads consider adequate. If you hit the boglehead goals, you're going to be more than fine in retirement.


Most elderly people who have worked "in the system" throughout their lives are eligible for social security and medicare. Its not enough for a comfortable life, but its enough to keep people out of homelessness. As far as I know, the only way to lose your social security payments is to owe on child support.

Many of the elderly homeless have spent their productive years in jail (see: war on drugs) and thus have too few social security and medicare credits to qualify for benefits. Unfortunately, they dont last that long...

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