Family member with almost no retirement savings or assets, what to do?

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theducklives
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Family member with almost no retirement savings or assets, what to do?

Post by theducklives »

My uncle is at retirement age without a real retirement plan. Recently divorced, wife’s family had everything in their name. Main question is whether he is in a position to take on any risk with his meager savings (by risk meaning bond funds, equities, etc) or just try to build his cash position out of the red zone? Also any other advice is welcome. Here’s his current situation:

Age 61

On SSDI due to work injury (likely will never be able to go back to work)

Assets - $20k in high-yield savings account, $10k in 401k, No debt other than $8k auto loan

Income - $2000 per month via SSDI (long term disability), $3500 per month via temporary worker’s comp payments (lawsuit hasn’t been settled yet but he’s receiving payments in the interim). Unknown how long this will last or when settlement will happen. So total of $5400 per month, but could go back down to just $2000 per month any time.

Expenses - $2000 per month (covers rent in HCOL area, car payment, bills, food, daily expenses). Excludes healthcare costs...

He’s done everything he can to bring down his cost of living and is committed to being frugal. Therefore no easy way to further reduce expenses. But obviously he’s in trouble in terms of achieving a comfortable retirement. Can he do anything else other than try to improve his cash position? Thanks all for the input.
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Nate79
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Re: Family member with almost no retirement savings or assets, what to do?

Post by Nate79 »

Work.
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cookymonster
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Re: Family member with almost no retirement savings or assets, what to do?

Post by cookymonster »

Move out of HCOL area
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CAsage
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Re: Family member with almost no retirement savings or assets, what to do?

Post by CAsage »

Move. He needs to find a much lower COL area where he can afford on the expected income. Is there anyone in the extended family that he could move in with, sharing housing costs? Find a roommate. Strange about the divorce, I would not think it was that easy for the wife to walk off with everything.... but who knows the details and background there, not everyone can build assets.
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H-Town
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Re: Family member with almost no retirement savings or assets, what to do?

Post by H-Town »

It’s a really tough place to be. It’s going to feel like everything is against him. He’ll learn to make do with what he has without withdrawing from his savings. I don’t think any financial planning would make an impact at this point. Just try to survive for another day.
iamblessed
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Re: Family member with almost no retirement savings or assets, what to do?

Post by iamblessed »

There are parts of the country you can live on 2k a month.
Mr. Rumples
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Re: Family member with almost no retirement savings or assets, what to do?

Post by Mr. Rumples »

Sadly he is not alone. My guess is that there is county/city office for the elderly. They would be able to provide basic information about what govt. assistance is out there for food, housing and medical care and other local groups which might provide free assistance.

I'd also assess whether he can use mass transit either now or in the future when car expenses add up. Many mass transit companies have special resources for the elderly including picking them up at their home.
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JoeRetire
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Re: Family member with almost no retirement savings or assets, what to do?

Post by JoeRetire »

theducklives wrote: Sun Jan 12, 2020 6:43 pmMain question is whether he is in a position to take on any risk with his meager savings (by risk meaning bond funds, equities, etc) or just try to build his cash position out of the red zone?
He is not in a position to take any risk. No magic bullets here. He needs to stay safe.
Age 61
On SSDI due to work injury (likely will never be able to go back to work)
He is not physically able to do any work at all?
Assets - $20k in high-yield savings account, $10k in 401k, No debt other than $8k auto loan
He should not have an auto loan. Sell the car and get a cheaper one.
Income - $2000 per month via SSDI (long term disability), $3500 per month via temporary worker’s comp payments (lawsuit hasn’t been settled yet but he’s receiving payments in the interim). Unknown how long this will last or when settlement will happen. So total of $5400 per month, but could go back down to just $2000 per month any time.
He should be saving every penny of the "extra" $3500 each month in a low risk vehicle.
Expenses - $2000 per month (covers rent in HCOL area, car payment, bills, food, daily expenses). Excludes healthcare costs...
He should be living in a LCOL locale. Hopefully when his income drops to $2000 per month he can get Medicaid.
He’s done everything he can to bring down his cost of living and is committed to being frugal. Therefore no easy way to further reduce expenses.
Rice and Beans. Beans and Rice?
But obviously he’s in trouble in terms of achieving a comfortable retirement. Can he do anything else other than try to improve his cash position? Thanks all for the input.
Comfort in retirement may not be achievable. Hopefully, he can just get by.

If he can work at all and still collect SSDI, he should. In 2020, he could get $1,260 per month income without losing SSDI. Presumably he still drives. If so, something like Uber might work as an income source.
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AerialWombat
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Re: Family member with almost no retirement savings or assets, what to do?

Post by AerialWombat »

Is SSDI permanent? If so, he's fine. Just move to LCOL and sell the car to get out from loan. Poof, retired.
Sandwich
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Re: Family member with almost no retirement savings or assets, what to do?

Post by Sandwich »

As he ages, depending on where he is living, he may consider applying for government subsidized senior housing. Some programs may charge 30% or some other percent of his "income" for rent. Minimum age to apply may be as low as 62 in some areas. Maybe he could apply now based on his disability status. Waiting lists may be long.
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Watty
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Re: Family member with almost no retirement savings or assets, what to do?

Post by Watty »

If his ex wife had higher earnings then he may be able to get a larger Social Security amount based on her income when he switches over to Social Security retirement income.. I don't know how that works with SSDI but he might check with the Social Security office to get the details of what his options will be.

One ray of hope is that at least he has a positive net worth and no debt other than the auto loan.

There were several suggestions that he should try to work. He needs to be very careful about that since him working could impact the lawsuit and his ability to get the SSDI, he should clear any work plans with his lawyer.
RCL
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Re: Family member with almost no retirement savings or assets, what to do?

Post by RCL »

Will he get any Social Security?
smectym
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Re: Family member with almost no retirement savings or assets, what to do?

Post by smectym »

>>"Expenses - $2000 per month (covers rent in HCOL area, car payment, bills, food, daily expenses)..."

Several posters have seen red when they spotted the acronym "HCOL," and in substance urged that uncle "should move to LCOL-Land."

However, HCOL area rent is itself typically more than $2000 per month. But uncle is covering not only rent, but the car payment, food, all other bills and expenses with just the $2,000. Either uncle is prudently and frugally rooming with others, or he has a fantastic rent-controlled apartment he'd be foolish to give up.
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theducklives
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Re: Family member with almost no retirement savings or assets, what to do?

Post by theducklives »

cookymonster wrote: Sun Jan 12, 2020 6:47 pm Move out of HCOL area
He moved into a senior home, $950/month. He could probably finder cheaper in a LCOL area but not by much, and then he'd have no family support. But yes I agree being in a HCOL area makes it difficult.
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theducklives
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Re: Family member with almost no retirement savings or assets, what to do?

Post by theducklives »

RCL wrote: Sun Jan 12, 2020 7:41 pm Will he get any Social Security?
Yes, he worked his whole life, made good income. Should get around $2k in SS (the SSDI should just carry over once he's retirement age).
Topic Author
theducklives
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Re: Family member with almost no retirement savings or assets, what to do?

Post by theducklives »

JoeRetire wrote: Sun Jan 12, 2020 7:13 pm
theducklives wrote: Sun Jan 12, 2020 6:43 pmMain question is whether he is in a position to take on any risk with his meager savings (by risk meaning bond funds, equities, etc) or just try to build his cash position out of the red zone?
He is not in a position to take any risk. No magic bullets here. He needs to stay safe.
Age 61
On SSDI due to work injury (likely will never be able to go back to work)
He is not physically able to do any work at all?
Assets - $20k in high-yield savings account, $10k in 401k, No debt other than $8k auto loan
He should not have an auto loan. Sell the car and get a cheaper one.
Income - $2000 per month via SSDI (long term disability), $3500 per month via temporary worker’s comp payments (lawsuit hasn’t been settled yet but he’s receiving payments in the interim). Unknown how long this will last or when settlement will happen. So total of $5400 per month, but could go back down to just $2000 per month any time.
He should be saving every penny of the "extra" $3500 each month in a low risk vehicle.
Expenses - $2000 per month (covers rent in HCOL area, car payment, bills, food, daily expenses). Excludes healthcare costs...
He should be living in a LCOL locale. Hopefully when his income drops to $2000 per month he can get Medicaid.
He’s done everything he can to bring down his cost of living and is committed to being frugal. Therefore no easy way to further reduce expenses.
Rice and Beans. Beans and Rice?
But obviously he’s in trouble in terms of achieving a comfortable retirement. Can he do anything else other than try to improve his cash position? Thanks all for the input.
Comfort in retirement may not be achievable. Hopefully, he can just get by.

If he can work at all and still collect SSDI, he should. In 2020, he could get $1,260 per month income without losing SSDI. Presumably he still drives. If so, something like Uber might work as an income source.
Thanks for the feedback. He's coming off a string of surgeries due to injury from last job. Low likelihood he'll be able to get back to work. A lot will depend on how the lawsuit goes. RE: the auto loan, his last car broke down and he bought a new low-end Kia for $12k. Not much he could do to go further down-market without buying older/used and therefore maintenance costs. He can't pay the loan off quicker without compromising his cash cushion. Agreed on the beans/rice thing. That's more of a personal decision but I agree there are ways to reduce cost with these types of sacrifices.
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theducklives
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Re: Family member with almost no retirement savings or assets, what to do?

Post by theducklives »

smectym wrote: Sun Jan 12, 2020 7:51 pm >>"Expenses - $2000 per month (covers rent in HCOL area, car payment, bills, food, daily expenses)..."

Several posters have seen red when they spotted the acronym "HCOL," and in substance urged that uncle "should move to LCOL-Land."

However, HCOL area rent is itself typically more than $2000 per month. But uncle is covering not only rent, but the car payment, food, all other bills and expenses with just the $2,000. Either uncle is prudently and frugally rooming with others, or he has a fantastic rent-controlled apartment he'd be foolish to give up.
Yeah he just moved into a 55+ senior living place in the least desirable corner of the HCOL area. $950 per month, includes all utilities. Relocating away from family is likely a non-option, especially if he's only gaining a few-hundred a month in further reduced living expenses.
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cookymonster
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Re: Family member with almost no retirement savings or assets, what to do?

Post by cookymonster »

There are reliable vehicles available for <$5k. If he is not working, I question whether it is worth having a vehicle at all. Can he rely on public transportation and family for rides? Even Uber may be more cost-effective if used infrequently.
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ram
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Re: Family member with almost no retirement savings or assets, what to do?

Post by ram »

Possibly Walmart greeter. Some salary plus store discounts for grocery.
House sitter.
Dog walker.
"Plant waterer" ( I pay good money for somebody to come to my house and water the plants when away for a few weeks.).
"Patient transporter" . Take patient to the doctor appointment, wait, then take them back, then call the daughter 500 miles away and report that mom is safely back in home. Pays much better hourly rate than Uber driver. Needs to be able to do it reliably.

I know somebody who makes decent money as a "driver for the Amish"

He needs to justify the need for that car (to himself/you). For occasional rides Uber may be cheaper and public transportation will be cheaper than usual for any body on disability.
Ram
OnTrack2020
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Re: Family member with almost no retirement savings or assets, what to do?

Post by OnTrack2020 »

I'd say his retirement plan is what it is, given what the OP has mentioned. Do not have him move, that will only add more expense. It seems he can pay all his bills and has family support in the area. It is what it is. My guess is that on his income, that his health care costs through Obamacare are not going to cost that much. Have you/he looked into that? He could also possibly look into Meals on Wheels or some other type of senior meal service--a local Office on Aging might have more information.

My MIL, when she was alive, lived on a very small amount--her social security and her late husband's pension. Both combined could not have been more than $1,000 per month. She owned a small house, old vehicle, etc. But she did just fine. We supplemented things she needed occasionally, such as a washer/dryer and had some carpet put in a room in her home. Otherwise, she really didn't want for much.
quantAndHold
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Re: Family member with almost no retirement savings or assets, what to do?

Post by quantAndHold »

It sounds like he’s doing exactly what he needs to be doing. Eventually, he’ll get a settlement that’s >$0 and know where he really stands financially, but if he can live frugally and manage his cash, it sounds like he’ll be okay.
Yes, I’m really that pedantic.
fuddbogle
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Re: Family member with almost no retirement savings or assets, what to do?

Post by fuddbogle »

Just an FYI to all, if he's in litigation for a work-related injury, he's not going to be working until the case is settled. No Work Comp attorney in the world will go into settlement negotiations with a client that can't work, yet, working. The work part may/may not come after the settlement.
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Re: Family member with almost no retirement savings or assets, what to do?

Post by Grt2bOutdoors »

Is your family in any position to provide a financial backstop in form of $50-100 a month?
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Financologist
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Re: Family member with almost no retirement savings or assets, what to do?

Post by Financologist »

Sorry your uncle is going through tough times.

Considering current income level, save as much as possible for now. Wait for information regarding the settlement. Make no drastic moves until more info is available. Between divorce and disability, uncle has much on his emotional and financial plates. Encourage him to spend time with those willing to give him love and support to help him stay positive. As info emerges please share.

If uncle would benefit from additional companionship, perhaps consider a roommate situation (share costs etc..) but again, with everything going on, it would be hard to imagine any further significant change benefiting uncle right now.

Good luck
lifeisinmirrors
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Re: Family member with almost no retirement savings or assets, what to do?

Post by lifeisinmirrors »

Only on this board is a single person making $5400 a month considered to be in poverty. That is more than most households make. He doesn't need to eat beans and rice, doesnt need cash from family members, and certainly won't qualify for government assistance.

With rent of $950 a month, he should be able to invest at least $1500 a month while having a decent lifestyle that is just less than he is used to. Vanguard Balanced Index might work; how much he invests is a lot more important than his choice of investments at this point.
McDougal
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Re: Family member with almost no retirement savings or assets, what to do?

Post by McDougal »

You mention he worked his whole life, made good money, and ex-wife family had everything in their name so got it all. Any chance to revisit their divorce settlement agreement? Or did the medical bills take most of that out? Might be worth looking at that.
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Nate79
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Re: Family member with almost no retirement savings or assets, what to do?

Post by Nate79 »

lifeisinmirrors wrote: Mon Jan 13, 2020 6:17 am Only on this board is a single person making $5400 a month considered to be in poverty. That is more than most households make. He doesn't need to eat beans and rice, doesnt need cash from family members, and certainly won't qualify for government assistance.

With rent of $950 a month, he should be able to invest at least $1500 a month while having a decent lifestyle that is just less than he is used to. Vanguard Balanced Index might work; how much he invests is a lot more important than his choice of investments at this point.
$3400 of the 5400 is temporary workers comp injury income and unknown future. So his real income is $2000 for the long term future without knowing what will happen with the injury lawsuit.
TresBelle65
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Re: Family member with almost no retirement savings or assets, what to do?

Post by TresBelle65 »

Even though he's already on it - I would suggest he join some extreme frugality groups to work the expense side of the situation. Lots of them on Facebook. People getting free meals, groceries and the like - all the time in these groups.

As far as the income side of the situation, if he cannot work a regular job, again, frugality groups have lots of ideas for bringing a few hundred bucks a month by doing non-physical work online - surveys, cash back, ad clicks, teaching English online, etc.

Does it seem feasible that his free time can be used productively? how is he using his free time now?
furwut
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Re: Family member with almost no retirement savings or assets, what to do?

Post by furwut »

See about qualifying for Medicaid.
Do away with the car. They are wealth absorbers.
FI4LIFE
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Re: Family member with almost no retirement savings or assets, what to do?

Post by FI4LIFE »

He drives a more expensive car than I do. He has not addressed his two biggest expenses. While he has extra money now he should put it to work. Keep some in cash for emergencies and invest the rest 40/60 stocks/bonds.
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JoeRetire
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Re: Family member with almost no retirement savings or assets, what to do?

Post by JoeRetire »

theducklives wrote: Sun Jan 12, 2020 8:03 pmThanks for the feedback. He's coming off a string of surgeries due to injury from last job. Low likelihood he'll be able to get back to work. A lot will depend on how the lawsuit goes.
Hmm. That tells me that he could work, but that he is waiting to see if a successful result in the lawsuit means that he won't have to work.

Those are different things.

IMHO, people who have almost no retirement savings or assets should work as long as they are physically capable, assuming they want to do more than just subsist.
Last edited by JoeRetire on Mon Jan 13, 2020 8:32 am, edited 2 times in total.
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Re: Family member with almost no retirement savings or assets, what to do?

Post by Strayshot »

Everything else aside, why would someone with 20k in the bank carry an 8k auto loan? Unless loan is at 0% that is a net loss proposition from the interest. Regardless of anything else, use money from savings to pay off the car loan and save the interest.

There are resources to support low income disabled seniors, but they take time to find and access. Since this person is not working and has all the time in the world, I would suggest the best return they can get on their time right now is to look for free supporting resources from fed, state, local and nationwide nonprofit groups, AARP, and others to improve their situation.

If and when there is a settlement, that money should be allocated and managed appropriately as a rainy day fund.
Shallowpockets
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Re: Family member with almost no retirement savings or assets, what to do?

Post by Shallowpockets »

He is in a new 55+ community. Maybe he should find a women to take up with. Two can live cheaper than one. If she has 2k month, that is 40k a year. Myself and DW live on that and that includes many vacations.
Otherwise he has 1k month after a damn good rent price of $950, utilities too!
Seems like a single person could live on that.

A $15 minimum wage is $31200 and working all 52 weeks of the year. And that is if someone is making a $15 minimum wage which many are not. So he is not too far below that.
Plus, some of the minimum wage workers have families to support.
So let’s not have too much worry about this. Live within your means on the $1k a month. If others say it can’t be done then don’t ever ever not support a $15 minimum wage. That’s you, all you BHs with annual expenses > $100,000 would have money problems and poor-mouth themselves on this forum.
Get a grip.
mnnice
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Re: Family member with almost no retirement savings or assets, what to do?

Post by mnnice »

furwut wrote: Mon Jan 13, 2020 8:10 am See about qualifying for Medicaid.
Do away with the car. They are wealth absorbers.
His present income is 5x poverty, I didn’t think any state is going to deem him eligible for Medicaid.

I do think no car if he lives where there is ridesharing or a cheaper car would be in order.
Last edited by mnnice on Mon Jan 13, 2020 10:13 am, edited 1 time in total.
Lafder
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Re: Family member with almost no retirement savings or assets, what to do?

Post by Lafder »

Expenses 2000/month, SSDI 2000/month, plus extra income more than 100% of this for now, with implication of more to come, plus savings.

His financial situation is quite good!

He has some savings. I would suggest saving every bit of what he can for future emergencies.

I would not suggest the expense of a move or buying an older less reliable car.

If he can get expenses to 1800-1900/month, he can save the extra and build an extra buffer even once workman's comp ends.

He can also ask family for help if needed if his savings run out.

:)
Spirit Rider
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Re: Family member with almost no retirement savings or assets, what to do?

Post by Spirit Rider »

OP, ignore the miserly cadre minority of Bogleheads on the car. They are in a competition and humble brag of how little they can spend on transportation.

Your uncle should not sell his car and buy something really cheap. He has had all of these surgeries and may need more and he is a senior citizen. He needs good reliable transportation that will last him several years. He has already received a blow to his life, he needs something to hang onto. Not to mention, he will probably take a bath downgrading so very little. It is not like he spent $25K - $30K+. Despite the protests of the cadre, $10K is an entirely reasonable amount for a vehicle in his circumstances.
Jags4186
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Re: Family member with almost no retirement savings or assets, what to do?

Post by Jags4186 »

Does he have children? If so, let them worry about it.
HomeStretch
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Re: Family member with almost no retirement savings or assets, what to do?

Post by HomeStretch »

quantAndHold wrote: Sun Jan 12, 2020 9:40 pm It sounds like he’s doing exactly what he needs to be doing. Eventually, he’ll get a settlement that’s >$0 and know where he really stands financially, but if he can live frugally and manage his cash, it sounds like he’ll be okay.
+1

Once the settlement, if any, is reached, he will know the income/asset side of the equation and can adjust expenses, if necessary.
chevca
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Re: Family member with almost no retirement savings or assets, what to do?

Post by chevca »

Strayshot wrote: Mon Jan 13, 2020 8:31 am Everything else aside, why would someone with 20k in the bank carry an 8k auto loan? Unless loan is at 0% that is a net loss proposition from the interest. Regardless of anything else, use money from savings to pay off the car loan and save the interest.
This is exactly what I think too. I'm surprised it was only brought up one other time.

Pay the car off from savings. He doesn't need as much of a "cushion" without a car payment. The SSDI already covers expenses, it would only do so easier without a car payment. Build savings back up while getting the worker's comp money. Simple.

Or, pay the car off in the next couple/few months with the extra money coming in. Get rid of that debt though.

He may end up doing well with the settlement? Wait until that is finalized to start figuring out what he should do.

I don't see any reason to take any risk with his minimal savings. He's 61... he just doesn't have the time to let a minimal amount grow and compound, and if he's not still contributing. I'd just leave it in savings since he may need it any time. If he gets a big settlement, then revisit if it should be invested.
FI4LIFE
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Re: Family member with almost no retirement savings or assets, what to do?

Post by FI4LIFE »

I disagree with paying off the car. It puts him in a vulnerable position with a small emergency fund. Better in an extreme emergency to simply stop making payments and allow repossession. Just my opinion. But I will reiterate that I think he needs to start putting his money to work 40/60. He should be putting away a couple thousand per month right now based on the information given.

I do not judge those who have been injured and cannot work. You can't understand unless you have been there yourself. Chronic pain can be even more mentally debilitating than it is physically. Add in financial stress and people can really feel stuck. This is especially true if all of their money earning skills require some physical labor. Good luck to him. If he gets his settlement he will be fine.
crake
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Re: Family member with almost no retirement savings or assets, what to do?

Post by crake »

My advice would be save as much as possible as he awaits the results of the settlement. Practice living on 2k per month and put the rest in the bank.

The situation does not sound dire. He has his housing costs under control, assets>debt, and a guaranteed income stream for the rest of his life. Worst case scenario is he has to learn to live on on 1050 dollars per month after paying for housing. If spent thoughtfully this could provide enough for a content life.

The more likely scenario is he collects and saves the additional 3500 dollars he's receiving for a while and accumulates some savings. He will probably get something from the settlement when the case resolves. My recommendation would be to annuitize the majority of the savings and settlement once the dust settles and enjoy a happy retirement. Hopefully, his injuries don't effect his ability to do the things he enjoys.
ponyboy
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Re: Family member with almost no retirement savings or assets, what to do?

Post by ponyboy »

He's going to have to move to a LCOL area and rent for the rest of his life. Plenty of places for sub $600/month in rent.
crake
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Re: Family member with almost no retirement savings or assets, what to do?

Post by crake »

ponyboy wrote: Mon Jan 13, 2020 1:21 pm He's going to have to move to a LCOL area and rent for the rest of his life. Plenty of places for sub $600/month in rent.
Assuming OP's uncle likes where he lives and is around family/friends I'm going to have to disagree. OP's uncle is currently paying $950/month. $350/month is worth it to live near family/friends in a location that you like.
Retired2013
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Re: Family member with almost no retirement savings or assets, what to do?

Post by Retired2013 »

My wife’s aunt (turning 89 next week) receives about $700 SS and a $50 monthly pension. She worked minimum wage jobs her whole life and never legally married her husband. For the past 34 years she has lived in HUD housing and the rent is based on her income. She pays around $100 per month for a very nice two-bedroom apartment. She’s on Medicaid, and received food stamps. She has never driven a car so she used family, friends and public transportation her whole life.

Not my life style but she makes due with what she has for the past 34 years. Her real problem is that she wants to help her grandchildren. When you help her, she passes it on to her grandchildren. That’s another long story.
Stormbringer
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Re: Family member with almost no retirement savings or assets, what to do?

Post by Stormbringer »

Honestly, I think the best thing for him is to date and marry again. Even if she is in roughly the same financial situation, the cost-sharing benefits would be substantial. Also, he is only 61 and could live for several decades. That is a long time to be lonely.
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Bernard
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Re: Family member with almost no retirement savings or assets, what to do?

Post by Bernard »

My wife has a very good friend who had a car accident many years back when she was rear-ended and accepted a way too low settlement. She's 62 now, looks 82, bent over, and can't even wash herself. She has a multitude of severe health problems, among others sleeps for years in a chair as she can't lie down for longer than an hour.

Her husband, turning 65 next month, was once doing well with his own business, but he made a series of bad choices, had an addiction problem, and worked illegally as a contractor, which brought him in front of a judge with the IRS sitting in the spectator rows.

He works as an assistant manager in a hardware store, and after wage garnishing brings home $850 every 2 weeks. Their rent in a subsidized senior apartment (awful!) is $1,150. Based on his income before IRS garnishing, they don't qualify for Medicaid, so another $350 goes for her health care premium. Now we have spent $1,500 of the $1,700 coming in. He has to drive to work, drives for weeks on the spare donut. The car consumes gas, and they have no money for food. The fridge is sometimes totally empty. We help them a bit, their 2 struggling children help them, but it's so sad I can't even think about it for too long or I get depressed.

Now that you heard what living on little money is like, you may understand who great it is to make ends meet on $2K, including a car loan, plus being able to put $3,400 per month away. For how long I don't know, but every month counts.

Know that MMM spends about $2K per month, a total of $24K per year, and he has to buy his own health insurance as well. Once can live a good life in Portugal on $1,500 per month, and $1K in Thailand and Mexico. But even in the US, there are many seniors who have less than $2K to live on, so he is in a better position than many. Since the HCOL doesn't really effect his costs this much, I think he should stay put. Every penny he has left should go into savings for a rainy day. And he should try to make a few bucks on the side. I'm sure there's something he can do for minimum wage.
fyre4ce
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Re: Family member with almost no retirement savings or assets, what to do?

Post by fyre4ce »

If he can drive he can work. Uber? Taxi? Delivery? He would probably need to avoid lifting heavy items but that should be doable. Every little bit helps. I wonder if it would reduce his benefits.
123
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Re: Family member with almost no retirement savings or assets, what to do?

Post by 123 »

Housing costs are likely his biggest expense. Those can be reduced by relocating or finding subsidized public senior/disabled housing or getting into a roommate situation.
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Herekittykitty
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Re: Family member with almost no retirement savings or assets, what to do?

Post by Herekittykitty »

Watty wrote: Sun Jan 12, 2020 7:39 pm If his ex wife had higher earnings then he may be able to get a larger Social Security amount based on her income when he switches over to Social Security retirement income.. I don't know how that works with SSDI but he might check with the Social Security office to get the details of what his options will be.

One ray of hope is that at least he has a positive net worth and no debt other than the auto loan.

There were several suggestions that he should try to work. He needs to be very careful about that since him working could impact the lawsuit and his ability to get the SSDI, he should clear any work plans with his lawyer.
Great advice.
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Herekittykitty
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Re: Family member with almost no retirement savings or assets, what to do?

Post by Herekittykitty »

Lafder wrote: Mon Jan 13, 2020 10:13 am Expenses 2000/month, SSDI 2000/month, plus extra income more than 100% of this for now, with implication of more to come, plus savings.

His financial situation is quite good!

He has some savings. I would suggest saving every bit of what he can for future emergencies.

I would not suggest the expense of a move or buying an older less reliable car.

If he can get expenses to 1800-1900/month, he can save the extra and build an extra buffer even once workman's comp ends.

He can also ask family for help if needed if his savings run out.

:)
Agreed!

Although it did look to me like the expenses were $2,000 plus medical expenses. We don't know how much the medical expenses are. So:
SSDI income - Total expenses = $2,000 - ($2,000 + medical expenses) = a negative number. But the exact figures don't change the advice above, which is very good.

Current (Temporary) Workman's Comp income = $3,500. Some of this will have to cover medical expenses plus any necessities inadvertently not accounted for in the $2,000 a month expense figure. The rest needs to go to savings. Keep it in a separate account (plain savings account is fine for this at least for now) so it doesn't get mixed in with the spending account.

Leave the $20,000 alone. Leave the $10,000 in the 401k alone except be sure it is invested reasonably conservatively.

Right now Uncle cannot afford to take risk. And he needs to build up savings. He also should not be making changes such as in living situation or in vehicle at this time and maybe never.

He should keep doing the above as long as his financial situation is subject to significant change one way or another. Should there become clarity as to what is financial situation is going to be, or should his financial situation change significantly one way or another, the answers to any financial questions could be different.
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