70YO with no retirement(or any other) savings

[daisylu]

Scares me to think how many more of this type of people are in the making.

finance.yahoo.com/retirement/article/112417/homeowner-no-savings-some-options

This also disturbed me from the comments section of the article:

My mother is 70 and broke and unhappily married. She spent all her years working as a nurse LPN and after more school (more financial burden) RN. She calls my Sister, Brother and I crying. Her husband is cruel especially now that she is not a bread winner. It is sad because we dont have much to help with as we all have our lives with children. Personally, it scares me! I have decided to work extra hard, but I have spent most of my years paying rent and working on commission. I dont even have Social Security to rely on. Social Security has been awful to my Mother and has taken portions of her meager income even though she had a stroke and they know its illegal. I have scheduled a hearing, but she still has to survive on so little that it caused her continued health problems and stress. She filed Bankruptcy and that caused her weeks of depression. I was afraid she would have another stroke and die. She asks: "Why does Social Security treat me so poorly after working all my life since I was 16 years old?" . Social Security did not even give a cost of living increase in the last two years!! I cry as I write this, I also unfortantly am resigned at knowing nothing will be done unless I do something, I will try!

After the age of 70, my grandmother ALWAYS lived with one of her children. It used to be the norm to live in a multi generational house.

[Deleted]

I read the article and didn't find the quote in it. The article you cite is about a woman who was once a clothing designer. The financial planner suggested a reverse mortgage.

I'm guessing the quote is from another post on here somewhere? The comment that SS is taking portions of her meager income probably refers to the Medicare deduction. Yes, it hurts, but it would hurt more for the mother not to have health insurance of any kind.

Are you going to have your mother live with you, Daisylu? I guess I'm just confused as to what your point is.

[jitterbug]

I have collected Social Security twice already in my life - once as a dependent child, once as a widow and mother of a dependent child - and while Social Security sometimes does some idiotic things (like if you earn more than allowed, they completely withhold your check until it's paid back versus dividing it by 12 and still allowing you something to live on) they don't randomly make deductions or withhold money. So I'm sorry that your mom is in a bad situation, but it's not up to Social Security to fix it for your mom.

That said...my mom is 83 and has lived solely off of Social Security for almost 20 years - which is less than $1000/month. What I've learned is that once you truly hit this level, there are services out there that make your life easier. She now lives in a one bedroom senior citizen apartment that is subsidized by the government. She pays based upon her income - so pays $230/month and it includes all utilities except phone and cable. She's now on Medicaid, which pays most of her medical bills. She has an aide come in, which keeps her out of the nursing home.

So...maybe there are some alternative services available to your mom. Unfortunately, I don't know how to tell you where to find these services. We were guided by an employee at Mom's apartment.

[daisylu]

Mar 27, 2011 9:01:07 GMT -5 @southernsusana said:

I read the article and didn't find the quote in it. The article you cite is about a woman who was once a clothing designer. The financial planner suggested a reverse mortgage.

I'm guessing the quote is from another post on here somewhere? The comment that SS is taking portions of her meager income probably refers to the Medicare deduction. Yes, it hurts, but it would hurt more for the mother not to have health insurance of any kind.

Are you going to have your mother live with you, Daisylu? I guess I'm just confused as to what your point is.

I forgot to post that the quote was from the comment section of the article. I have edited my post.

While it is not ideal to have mom live with me, the household that I was raised in was extremely family oriented - everyone pitched in to help those who needed (provided that those who needed the help were also doing as much as they could to help themselves). During my time as a single parent I worked swing shifts - my parents helped me out by taking care of my children on the off shifts. Years later when I was lucky enough to get a straight day job, I in turn helped my sister by taking care of her child when she was stuck working the evening shift for 2 years.

We just always did what needed to be done. If it came down to my parent living in such an untenable situation, I would feel remiss if I did not offer her assistance.

[jitterbug]

I also just realized that you aren't talking about your mother! But it's sad to watch your parent struggle to survive. I have helped my mom over the years as she has needed it - but it's a little frustrating sometimes since she never asked my opinion before spending her money unwisely! So when she started having creditors calling her daily, my sister and I had to step in and pay off her debts with a home equity loan that she and I paid. Mom is honest but naive - she didn't intentionally spend more than she had...but never comprehended that she'd never be able to pay off what she owed.

[Deleted]

Mar 27, 2011 9:10:13 GMT -5 jitterbug said:

That said...my mom is 83 and has lived solely off of Social Security for almost 20 years - which is less than $1000/month. What I've learned is that once you truly hit this level, there are services out there that make your life easier. She now lives in a one bedroom senior citizen apartment that is subsidized by the government. She pays based upon her income - so pays $230/month and it includes all utilities except phone and cable. She's now on Medicaid, which pays most of her medical bills. She has an aide come in, which keeps her out of the nursing home.

As has been pointed out before, either here or on the old Boards, people who live in government-subsidized housing and get Medicaid are not "living solely off SS". They're living off SS plus all kinds of other government programs. This scares me because as the baby boomers age, I think this is what they figure will happen to them. "With SS I can get a nice subsidized apartment and I'll be poor enough to qualify for Medicaid, so I really don't need to worry about saving for retirement after all." And then, of course, when you do need a nursing home, Medicaid pays for that.

As a baby boomer who actually has savings, I am worried about the confiscatory taxes that are going to be needed to support all these programs and I am truly scared for my son's generation, who will be taxed so badly they won't be able to save for their own retirement.

[zibazinski]

Those that are penalized for doing the right thing will start to figure out ways to beat the system that penalizes them for doing so.

[Formerly SK]

My mother is 64, in poor health, and has no savings. She's also never contributed to SS - has dealt drugs on/off most of her adult life. I've seen her twice in 13 years, but we talk a few times a year. I have NO IDEA what is going to become of her. She doesn't even have enough money to pay first/last to move to another rental. She's not welcome to live in my home and I don't have extra money to give her.

It's a sad situation, but on the other hand there are consequences to your decisions and she has made about 10,000 bad decisions.

[Deleted]

There was a blurb in the newest Money magazine by a financial planner. He mentioned that when he spoke to older folks they often said that they don't need to plan - they'll live with their kids when the time comes. Then these same individuals call him later to say that their kids are losing their jobs because they are spending so much time taking care of their parents.

[april47]

I read that article earlier. I didn't think that she was all that bad off. She had a $180,000 house that she inherited but owed about $5000 on a loan on it. She also sewed and made money on childrens fancy dresses. She also had some timber land she owned with her brothers that they were thinking about selling. Her SS was $900. I think that the whole point of this article was about reverse mortgages and how she was a perfect candidate for one. Most of the comments weresaying don't do it. I'm not sure if I agree with that if it would give her a better quality of life free of worry and she wasn't concerned with leaving a legacy.

[stats45]

Perhaps the children aren't allowing the mother to live with them unless she leaves her husband, and the mother refuses to do that. They may be willing to take her in but don't want her cruel husband around their children.

A bad, long-term relationship is often the worst financial, emotional, and overall mistake a person can make.

[jitterbug]

In my mom's case, she was basically a traditional housewife until she was widowed at age 49 and left with a part time retail job and no real job skills. They had insurance on their loans that paid off the house and car, plus about $30,000 in retirement that my dad had (this was in 1976, so that was a halfway decent sum). The main error my mom made was retiring at age 62 without figuring out what she'd have to live on the rest of her life. But from 62 until her mid-70's, she cleaned houses to earn her spending money. It was after she couldn't clean houses anymore that her debt started to gradually snowball.

I am very thankful that there ARE government programs for the elderly. Most of them are honest and have worked hard all their lives. It's the ones who are on welfare or disability who are capable of working some sort of job that annoy me!

[Poppet]

I read the article about the 70 year old woman who lives on $900 SS check and has a little side biz making and sellling dresses.
She has assets. 1. Her home and 2. some timber land.
I finished that article not feeling sorry for her at all. There are way worse situations.

[Havoc]

Yes, I do think it's nuts, but I suspect (hope?) that she can get the 14k from either selling the timberland, or her brothers buying out her interest in it.

That aside, while I sympathize with her situation, the article doesn't fill me with the urge to march on Washington demanding better aid programs... This lady made some significant money in her time, and I don't think it is the taxpayers responsibility to rescue her from her bad decisions (most notably, deciding to invest everything in her businesses instead of saving any portion).

Daisylu's right, though - we are going to be seeing/hearing a LOT of these stories in the near future...

[Deleted]

Mar 27, 2011 12:06:06 GMT -5 @tbird said:

A reverse mortgage is going to leave her completely destitute if she outlives the benefit.

Some reverse mortgages are structured in the form of a life annuity rather than just handing you a lump sum, so this wouldn't be a problem.

[cronewitch]

I went to a birthday party yesterday for a 80 year old. She gave birth to 6 children all over 50 now. The first two children were not raised by her. Nobody knows what really happened she says they were in fostercare or something and somehow someone adopted them without her permission. She may not know what happened but she didn't get to raise them. Then she was living in sin with my dad's cousin and had 4 children with him, the two older children found the family again but live in another state.

When this woman who really isn't related to me but her kids are has never worked that I know of and dad's cousin died but she isn't a widow since she never married. She isn't a surviving spouse or anything to get SS. Her daughter tried to find a marriage for her mom and couldn't find one so asked my mom if her parents had ever been married but they never were.

Now she is 80 living with an old dude she met at the senior center in his house. I looked on zillow and his house sold in 2004 for 81,500. She is fine so far 22 grandkids and a bunch of great grands but most live in a poor small town in cheap little houses and are working at the senior center or local high school or some other low paid work.

What should a old woman do when she didn't save, didn't marry, didn't work under SS so won't get any? Maybe she can marry the old dude she lives with even if he leaves his house to his kids she could collect on his SS.

[Deleted]

Mar 27, 2011 13:53:16 GMT -5 cronewitch said:

What should a old woman do when she didn't save, didn't marry, didn't work under SS so won't get any? Maybe she can marry the old dude she lives with even if he leaves his house to his kids she could collect on his SS.

Well, at that point it's a bit late to do any retirement planning. Why did it never occur to her over the last 50 or so years that she would never be able to collect SS because she had no work record of her own and didn't marry? I guess it was the old, vague, "I'll think about it tomorrow" or "the government won't let me starve".

If there's anything more pitiful than a 30-something golddigger (of either sex), it's a 70-something golddigger.

[Phoenix84]

This caught my eye

"Ms. Baer, who is 67 and single, said there were particular financial difficulties facing single people as they aged. Even people in a relationship should make financial plans that can work even if they were to be single during retirement, she said, adding, “Nobody knows who’s going to be there at the end.”

It's exactly this type of thinking that lands women in these types of situations. I got news for you ladies, a man is NOT a retirement plan. It's sad to think how many women out there think that saving for their future is their husband's job. Most women on this board know better, but in the general population......

[Phoenix84]

I have a hard time feeling sorry for people who are old and don't have anything saved. I understand bad circumstances can happen to good people, but in the overwhelming majority of cases, it's simply poor planning and laziness (or, as I mentioned above, relying on someone else like your husband or kids to take care of you). If you can't save anything for your golden years then you should just be happy with whatever scraps the government, charities can throw your way.

I also had a hard time feeling sorry for the woman in the article. She had a place to live and food to eat, as well as a SS check and supplimental income from making dresses and working at a jewelry store. I can think plenty of worse fates.

[april47]

I think people here are being a little harsh on older people especially older women. Future old people have the benefit of growing up in a world where girls are taught from the start to stand on their own.The internet and other media resources teach about money, investing, and budgets.
Times were so different in the 50's and 60's. Nobody encouraged women to save for the future. Women grew up thinking their husbands would take care of it. They had a rude awakening only after it was too late for the advantages of compounding. What is second nature to those on these boards and others who have grown up in the enlightend world of technology was not even comprehensible to most of those raised in earlier generations.

[gooddecisions]

I don't see why a reverse mortgage would be a bad decision. It would net her about $500/month for the next 25 years to supplement her $1400/month income. Her kids obviously don't care about her enough to help her, so what does she need the equity in her home for- certainly not to leave for her kids. She could either sell her home to repay the debt or after she dies the estate will take care of the debt via the sell of her home. She wouldn't owe any additional fees or payments until that point.

[cronewitch]

Times were so different in the 50's and 60's. Nobody encouraged women to save for the future. Women grew up thinking their husbands would take care of it

I learned my lesson in 1967 when I was 18. I met old women who were living where I was living. It was an old house divided into apartments, I had 3 rooms and shared a bath with the other apartments on my floor. So three units to one bathroom. It wasn't bad and you could afford it on minimum wage with no car or health insurance. I was 18 and it was an adventure walking and taking subways, carrying food up flights of stairs.

These women were widows who had husbands tell them not to worry their pretty little heads about money he would support the family. As long as he lived they were fine. When he died his pension and SS went too. They got a little widow SS since they hadn't had covered employment so here they were too old to learn a trade, no job skills and stuck the rest of their life in 2-3 rooms with a parakeet paying the grocery delivery boy .50 cent to deliver the groceries.

I imagined how I would feel to be 70 or so and facing 30 years of living in poverty so the grocery delivery expense was a line item in a budget. I decided I didn't want to depend on a man.

When I was married I made sure to think about my welfare. He had a pension and was 17 years older than me. His retirement plan was I would be working and with his income he would be fine. It was up to me to plan my own retirement, I planned to be a widow before I was 70 and if he needed care might not be able to work to 65. I insisted he buy a house when he rather rent so I would at least have a paid off house. I paid the bills and saved money without telling him how much and if I stayed married much longer would have started a IRA even if he said I was too young.

[midjd]

I agree with April - though certainly some situations like this could have been prevented, women who grew up more than half a century ago were not given the same "instructions" they are today. Though sometimes I doubt things will be much different when the younger Boomers are 70...

My mom is 53, and the last time we discussed it she had about $15K in her 401(k) and was contributing "the minimum" (I assume 3%...of a ~$50K salary). I also suspect she borrowed against it - or maybe just withdrew money - to help with my brother's college expenses. She spent two-thirds of her earning years making <$20K, so there won't be much SS. She freely admits that she will never be able to retire, but (I think unwisely) assumes she'll be able to work until she dies. Not more than a day or two passes in which I don't spend some time thinking about what will happen in another 15 years or so when she can't work and can't afford to live on SS. It is going to be a problem for a lot of families.

If there is any bright side, I think the children in these situations will be given a real kick in the pants to save for their own retirements - that is, if they don't spend the funds subsidizing their parents' retirements.

[Plain Old Petunia]

Mar 27, 2011 15:57:47 GMT -5 gooddecisions said:

I don't see why a reverse mortgage would be a bad decision. It would net her about $500/month for the next 25 years to supplement her $1400/month income. Her kids obviously don't care about her enough to help her, so what does she need the equity in her home for- certainly not to leave for her kids. She could either sell her home to repay the debt or after she dies the estate will take care of the debt via the sell of her home. She wouldn't owe any additional fees or payments until that point.

Gooddecisions, I agree. I think if she wants to stay in her house, then a revese mortgage makes a great deal of sense.

[Deleted]

Mar 27, 2011 17:05:39 GMT -5 midjd said:

I agree with April - though certainly some situations like this could have been prevented, women who grew up more than half a century ago were not given the same "instructions" they are today. Though sometimes I doubt things will be much different when the younger Boomers are 70...

My mom is 53, and the last time we discussed it she had about $15K in her 401(k) and was contributing "the minimum" (I assume 3%...of a ~$50K salary). I also suspect she borrowed against it - or maybe just withdrew money - to help with my brother's college expenses. She spent two-thirds of her earning years making <$20K, so there won't be much SS. She freely admits that she will never be able to retire, but (I think unwisely) assumes she'll be able to work until she dies. Not more than a day or two passes in which I don't spend some time thinking about what will happen in another 15 years or so when she can't work and can't afford to live on SS. It is going to be a problem for a lot of families.

If there is any bright side, I think the children in these situations will be given a real kick in the pants to save for their own retirements - that is, if they don't spend the funds subsidizing their parents' retirements.

At least yours does not think she will retire early (62) without making any sacrifices like my mom. My mom is paying the max into her 401k but won't even do the paperwork to open a Roth IRA and wants to retire in 9 years.

[Deleted]

Mar 27, 2011 16:56:18 GMT -5 cronewitch said:

Times were so different in the 50's and 60's. Nobody encouraged women to save for the future. Women grew up thinking their husbands would take care of it

I learned my lesson in 1967 when I was 18. <snip>

I'm only a little younger than you (58). First of all, as you pointed out, there were always sad stories around us. The mother of one of my classmates used to visit my grandmother, who lived nearby, and ask if she had any "irons", e.g. laundry that she could iron to make money. I don't know if she was widowed, divorced or abandoned, but she had a pile of kids to support and always looked haggard and underfed. (My grandmother shushed me when I said my Mom was always complaining about how much she had to iron so maybe she could iron for Mom.) A friend of my brother's was also raised by a struggling single mother- Dad abandoned the family.

So, we knew it didn't always end like the fairy tale. In addition, by the 1970s the feminist movement was making a lot of noise and more opportunities were open to women. Still, I saw the women in my dorm who didn't take their education seriously and had no real intention of ever having to use the degree to actually support themselves. I'm sure that many are happy suburban grandmothers if they married a good guy and the marriage lasted. Not sure about the rest, but sometimes poverty in your old age is the result of living in la-la land your whole adult life and thinking someone else will take care of you.

[Phoenix84]

"At least yours does not think she will retire early (62) without making any sacrifices like my mom. My mom is paying the max into her 401k but won't even do the paperwork to open a Roth IRA and wants to retire in 9 years."

So your parents think they will retire at 62 because they are at the magic age? I can see how that would concern you. It's sad how many people just think retirement is something you get by living to a certain age instead of something you earn by sacrifice and saving.

[Phoenix84]

"there were always sad stories around us."

Exactly, that's why I don't think we're being "too hard" on these elderly for not saving. The stories and examples of struggling elderly widow(er)s is nothing new. Some people think there weren't poor elderly in the 50's and 60's? Not to mention the feminist movement happened more than 40 years ago. The idea of women supporting themselves didn't just come about in the last 10 years....

[stantonjane]

I am thinking the woman in the articles house has more than one bedroom, so why not get a boarder or roommate. This should net her at least $500 more a month.