fixed income

[Deleted]

What is your definition of a fixed income? 

Oftentimes I see elderly people comment that they are on a fixed income. Aren't we all? My paychecks are about the same all of the time.

I have an empty house that I have not rented out yet. Yesterday a lady asked me if she could rent it because her landlord keeps raising her rent and she is on a fixed income, blah, blah, blah.

This is a small town and she heard I bought my dad's house. I told her it needs a new septic and a new roof so it is not ready to be rented.

The fixed income story does not make me feel sad for her. Is that bad?

[ken a.k.a OMK]

I think of fixed income as someone living on SS. When working there can be raises or overtime. 

[Deleted]

Apr 18, 2024 14:50:40 GMT -5 ken a.k.a OMK said:

I think of fixed income as someone living on SS. When working there can be raises or overtime. 

SS gets raises too.

[ken a.k.a OMK]

Apr 18, 2024 14:52:18 GMT -5 @blue said:

Apr 18, 2024 14:50:40 GMT -5 ken a.k.a OMK said:

I think of fixed income as someone living on SS. When working there can be raises or overtime. 

SS gets raises too.

That's true. They get COLA, but not the ability of someone working to ask for a significant raise.

[raeoflyte]

Fixed income= limited options to deal with increasing expenses.

I can get a better job or a 2nd job. Once you retire and if you don't have investments you're pretty much limited to cutting back and that only goes so far.

Doesn't mean you have to change your behavior or how you rent out your property but I have empathy for a lot of people in that boat.

[toomuchreality]

I'm not going to touch this.

You feel how you feel, whether it fits the definition of a fixed income, or not.

[NoNamePerson]

The only time in my work history that I wasn’t on a Fixed Income was when I sold real estate in the 70’s. Was on commission! I think the term is so over used. Heard a conversation a while back and lady was telling mechanic that she was on fixed income and he replied back “so am I” It took all I could do to keep from bursting out loud laughing. She was poor mouthing! 

[giramomma]

When i get my pension, I would consider that to be a fixed income.

The decade or so that I got 0 raises and/or was furloughed; I would consider my pay to be fixed. It was the same, except for when it decreased. 

Not everyone can work 2 or 3 jobs to make ends meet. I shouldn't be the standard.

Here's what the national counsel on aging says:
www.ncoa.org/article/what-does-living-on-a-fixed-income-mean 

I don't expect people to feel bad for me because I took a  job that does not routinely offer raises. It was by design; I'm playing the long game for the pension, and the health insurance. It still blows my mind likely 100K of cancer treatment cost me about 1K out of pocket. I am also aware that taking a job for the benefits is a sign of privilege.

I would expect that someone should feel some sort of empathy towards someone that is on disability or had an honest work career and is struggling to survive on social security. 

Is there more to the story, OP? 

[Tennesseer]

Apr 18, 2024 14:43:41 GMT -5 @blue said:

What is your definition of a fixed income? 

Oftentimes I see elderly people comment that they are on a fixed income. Aren't we all? My paychecks are about the same all of the time.

I have an empty house that I have not rented out yet. Yesterday a lady asked me if she could rent it because her landlord keeps raising her rent and she is on a fixed income, blah, blah, blah.

This is a small town and she heard I bought my dad's house. I told her it needs a new septic and a new roof so it is not ready to be rented.

The fixed income story does not make me feel sad for her. Is that bad?

Yes.

[Tennesseer]

Apr 18, 2024 14:52:18 GMT -5 @blue said:

Apr 18, 2024 14:50:40 GMT -5 ken a.k.a OMK said:

I think of fixed income as someone living on SS. When working there can be raises or overtime. 

SS gets raises too.

How much more money will I receive (with the 2024 Social Security 'raise'?
The average Social Security check will increase (for 2024) by about $55, from $1,705.79 in 2023 to $1760.37 in 2024.

This shouldn’t be considered a bonus, however, but an adjustment to keep benefits in line with rising prices. It’s still important to be financially responsible.

Social Security benefits have increased — here’s how much more you’ll receive

So for the average yearly increase for 2024 with the 'raise' (12 months x $55) is $660. That will buy you at least two 2024 Porsche Cayenne Coupes.

[NastyWoman]

Apr 18, 2024 14:55:52 GMT -5 ken a.k.a OMK said:

Apr 18, 2024 14:52:18 GMT -5 @blue said:

SS gets raises too.

That's true. They get COLA, but not the ability of someone working to ask for a significant raise.

There is that. However, while I was still working I never once received a COLA. And some years raises were skipped too because "we need to conserve cash". Not that much different from the years with 0% COLA on SS.  Mostly when people say this I (possibly falsely?) believe they are talking about a lower income than before they retired claiming financial restraints/poverty. This doesn't always mean a lot either. For instance my " fixed income",  which consists of SS and a small non-COLA adjusted pension, is less than half my last salary. That said I saved more than half of that salary so, without changing anything, I still have plenty 

[resolution]

Apr 18, 2024 14:43:41 GMT -5 @blue said:

What is your definition of a fixed income? 

Oftentimes I see elderly people comment that they are on a fixed income. Aren't we all? My paychecks are about the same all of the time.

I have an empty house that I have not rented out yet. Yesterday a lady asked me if she could rent it because her landlord keeps raising her rent and she is on a fixed income, blah, blah, blah.

This is a small town and she heard I bought my dad's house. I told her it needs a new septic and a new roof so it is not ready to be rented.

The fixed income story does not make me feel sad for her. Is that bad?

"Fixed income" carries the connotation of "low income" rather than just having an income that is the same every month. I told my mother-in-law that I was on a fixed income now that I retired, and she laughed at me and told me that I couldn't be on a fixed income since I am not struggling.

As far as feeling compassion, I do feel compassion for people who are on fixed incomes trying to get by with the crazy increases in rent and other living expenses. I think housing is in a terrible state in this country and I wish there were more assistance programs to help people at least get a modest apartment to keep them off the streets. However, I wouldn't rent out my home to someone that couldn't afford it, since I rely on rental income for my own expenses.

[TheOtherMe]

Many people with fixed incomes are elderly and barely make enough to survive.  People in their 80's and 90's can't work to get more income.  

People like my 90 year old cousin have a very low amount of Social Security.  She never made more than $2.50 an hour for her entire working career and she worked from the time she graduated high school until she retired in her 70's.  She spent her life living in studio apartments.  

She used the envelope method for her spending.  She had an envelope for saving.  She said that envelope was filled first when she cashed her check.  

She never had a credit card or a car.  

She scrimped and saved and finally bought a small one bedroom house near my high school with cash.  Then the freeway came and bought her out.  So she bought another one bedroom house even closer to my high school.  She rode the bus to work.  

Mom would drive her places where she wanted to go and we always took her with us when we went to visit mom's family.  

She must have bought groceries and brought them home on the bus.  I don't recall mom taking her grocery shopping.

When she retired, she had enough money saved up to buy a bigger house in a very small town.  That is the house that I hope closed on it's sale this week.  

Her fixed income is very low.  I'm told that she has savings, the house sale money and hopefully some money from her funeral fund, that she can stay where she is as self pay for about a year.  Then she will go on Medicaid.  

She wasn't well educated and the only jobs she could do were food service.  She spent her life working in buffets.  There are no tips working the buffet line and it is hard work.

I tend to think of people with fixed income as low income.  I know it's true in her case.  My mom waited tables her entire life.  Her social security was very small even getting half of dad's.  He didn't make big $$$ except at the end of his life.  As soon as I got promoted after college, he said I made more money than he did.  

Because of how my pension worked, I am not low income.  I am by no means wealthy, but I am definitely not low income.  

I do have compassion for people who live on a small fixed income.  

[TheOtherMe]

Apr 18, 2024 16:02:08 GMT -5 Tennesseer said:

Apr 18, 2024 14:43:41 GMT -5 @blue said:

What is your definition of a fixed income? 

Oftentimes I see elderly people comment that they are on a fixed income. Aren't we all? My paychecks are about the same all of the time.

I have an empty house that I have not rented out yet. Yesterday a lady asked me if she could rent it because her landlord keeps raising her rent and she is on a fixed income, blah, blah, blah.

This is a small town and she heard I bought my dad's house. I told her it needs a new septic and a new roof so it is not ready to be rented.

The fixed income story does not make me feel sad for her. Is that bad?

Yes.

[Deleted]

Apr 18, 2024 15:34:07 GMT -5 NoNamePerson said:

The only time in my work history that I wasn’t on a Fixed Income was when I sold real estate in the 70’s. Was on commission! I think the term is so over used. Heard a conversation a while back and lady was telling mechanic that she was on fixed income and he replied back “so am I” It took all I could do to keep from bursting out loud laughing. She was poor mouthing! 

That. Maybe that is my problem. The term "fixed income" is over used.

Again, this is a small town. I had an income tax client that wanted us to look at her taxes for free. She told me they are on a fixed income. I know she gambled away her husband's pension money from seeing the 1099s for the past 20 (?) years.

This other lady wants to rent my house for "cheap" because she is on a fixed income. I am replacing the septic and roof so I want to get a decent amount of rent. Isn't the goal of buying a rental to make money? 

ETA: I thought of fixed income as the literal meaning. To me, low income and fixed income mean two different things.

[Deleted]

Apr 18, 2024 15:53:42 GMT -5 giramomma said:

When i get my pension, I would consider that to be a fixed income.

The decade or so that I got 0 raises and/or was furloughed; I would consider my pay to be fixed. It was the same, except for when it decreased. 

Not everyone can work 2 or 3 jobs to make ends meet. I shouldn't be the standard.

Here's what the national counsel on aging says:
www.ncoa.org/article/what-does-living-on-a-fixed-income-mean 

I don't expect people to feel bad for me because I took a  job that does not routinely offer raises. It was by design; I'm playing the long game for the pension, and the health insurance. It still blows my mind likely 100K of cancer treatment cost me about 1K out of pocket. I am also aware that taking a job for the benefits is a sign of privilege.

I would expect that someone should feel some sort of empathy towards someone that is on disability or had an honest work career and is struggling to survive on social security. 

Is there more to the story, OP? 

It's fixed income vs. low income. I don't want to go into debt because this lady cannot afford her rent. (If it was a good friend or relative, I would help them out.)

[resolution]

Apr 18, 2024 19:33:16 GMT -5 @blue said:

Apr 18, 2024 15:34:07 GMT -5 NoNamePerson said:

The only time in my work history that I wasn’t on a Fixed Income was when I sold real estate in the 70’s. Was on commission! I think the term is so over used. Heard a conversation a while back and lady was telling mechanic that she was on fixed income and he replied back “so am I” It took all I could do to keep from bursting out loud laughing. She was poor mouthing! 

That. Maybe that is my problem. The term "fixed income" is over used.

Again, this is a small town. I had an income tax client that wanted us to look at her taxes for free. She told me they are on a fixed income. I know she gambled away her husband's pension money from seeing the 1099s for the past 20 (?) years.

This other lady wants to rent my house for "cheap" because she is on a fixed income. I am replacing the septic and roof so I want to get a decent amount of rent. Isn't the goal of buying a rental to make money? 

ETA: I thought of fixed income as the literal meaning. To me, low income and fixed income mean two different things.

I don't blame you for wanting to get market rate for your rental, although I do think it is bad to not feel empathy or compassion for her. It's kind of like the airplane thing where you are supposed to put on your own oxygen mask before you put one on a child. You have to look out for your own financial stability or else you won't have the resources to help others.

I ran into the same issue when I got married and moved out of my house and into my husband's house. My coworkers kept approaching me and asking me if I would rent it to another coworker that was getting evicted. She had this whole plan of having her boyfriend move in so they could afford the rent together, but I had done her taxes for her the previous year and knew how bad her finances were. So I signed a contract with a property manager and told her that I couldn't rent it to anyone that didn't meet the company's criteria. I felt bad, but within a year they had broken up and she was living with her mom after being evicted again.

I have a friend that rented to another coworker and she lived there for years without paying any rent. He was afraid to evict her because she was popular at work and he didn't want everyone to get mad at him.

[giramomma]

Apr 18, 2024 19:33:16 GMT -5 @blue said:

Apr 18, 2024 15:34:07 GMT -5 NoNamePerson said:

That. Maybe that is my problem. The term "fixed income" is over used.

Again, this is a small town. I had an income tax client that wanted us to look at her taxes for free. She told me they are on a fixed income. I know she gambled away her husband's pension money from seeing the 1099s for the past 20 (?) years.

This other lady wants to rent my house for "cheap" because she is on a fixed income. I am replacing the septic and roof so I want to get a decent amount of rent. Isn't the goal of buying a rental to make money? 

ETA: I thought of fixed income as the literal meaning. To me, low income and fixed income mean two different things.

Re renting= making money. it just depends.

What will the market bear? 

So, homes like what my family currently lives in rents for about 2800 a month.

If someone bought our house with 10% down, and then tried to rent it, they would have to rent it out for $3300 a month just to cover PITI. If you also want your renters to be paying for home maintenance on the rental, then you are talking 3800. Plus, if you want to make money, I suppose you'd need to charge what 500 or so a month? Honestly, I would want to make 750 or so. Renting is work. Actually, I'd want more than 750/month. I think our dividends are nearing that on a monthly basis. And we do exactly 0 work for our dividends.  So, if I actually have to work hard...I'd better be paid very well for it.

Who in their right mind is going to pay 4500+ for renting a house to cover someone else's cost and profit, when other places can be had for less?  Do you think the market would bear that kind of mark up? I don't think so.

I mean, if you fix the house up and price it so that no one can afford it and no one rents it...how is that exactly achieving your goals?

[busymom]

Apr 18, 2024 20:22:53 GMT -5 resolution said:

Apr 18, 2024 19:33:16 GMT -5 @blue said:

That. Maybe that is my problem. The term "fixed income" is over used.

Again, this is a small town. I had an income tax client that wanted us to look at her taxes for free. She told me they are on a fixed income. I know she gambled away her husband's pension money from seeing the 1099s for the past 20 (?) years.

This other lady wants to rent my house for "cheap" because she is on a fixed income. I am replacing the septic and roof so I want to get a decent amount of rent. Isn't the goal of buying a rental to make money? 

ETA: I thought of fixed income as the literal meaning. To me, low income and fixed income mean two different things.

I don't blame you for wanting to get market rate for your rental, although I do think it is bad to not feel empathy or compassion for her. It's kind of like the airplane thing where you are supposed to put on your own oxygen mask before you put one on a child. You have to look out for your own financial stability or else you won't have the resources to help others.

I ran into the same issue when I got married and moved out of my house and into my husband's house. My coworkers kept approaching me and asking me if I would rent it to another coworker that was getting evicted. She had this whole plan of having her boyfriend move in so they could afford the rent together, but I had done her taxes for her the previous year and knew how bad her finances were. So I signed a contract with a property manager and told her that I couldn't rent it to anyone that didn't meet the company's criteria. I felt bad, but within a year they had broken up and she was living with her mom after being evicted again.

I have a friend that rented to another coworker and she lived there for years without paying any rent. He was afraid to evict her because she was popular at work and he didn't want everyone to get mad at him.

   Yup.  Never do business with family or friends.  It's sad that they're the ones most likely to mess with you, but it's true.  I believe in giving, but NOT in being played for a fool.  


    I like the idea of having a property manager independent of you.  Then he/she can be the "evil" one who actually requires that the rent be paid every month.

[Deleted]

Hmmmm. This real estate is paid for. I inherited 1/3 and had to buy out my two siblings. It is on 60 acres with a private lake in rural Wisconsin. The main reason I bought it is because it adjoins the 5 acres my house is on. I have had people offer to lease it just for deer hunting season. I am leaning towards a short-term rental for people that want to vacation "up north" in a quiet secluded area. I won't be charging $4500 a month. That's ridiculous in this area. I would maybe consider long-term rental for the right person and I would charge $800 at the most.

When I retire and get too old to maintain it, I should be able to sell it for a hefty price. 

[Knee Deep in Water Chloe]

While I agree with much of blue is saying, I have a few additional thoughts.

Much of my definition of “fixed income” stems from which economic theory were basing this conversation in. If we’re talking about true capitalism, a merit-based economy, active and passive income opportunities, then there is no such as a fixed income.

However, if one is not granted the same opportunity to earn money as another, then that person’s income is definitely limited if not fixed based on minimum social services.

My bias stems from my mother saying things like “I’m on a fixed income” when really, she has refused to work for pay the majority of her life. She relied on my grandfather and father to financially provide for her. So, she has limited her income based on her own (stubborn) choices.

However, if someone is born with eg, cerebral palsy, or Down’s syndrome, or an IQ below 70, then That person is going to likely be on a fixed income.

Generational poverty is another facet that makes this definition ambiguous. A person born into generational poverty may not have any physical or mental disabilities, but that doesn’t mean they have the same opportunities to earn income as someone born into the middle class or above.

[Knee Deep in Water Chloe]

Apr 18, 2024 14:55:52 GMT -5 ken a.k.a OMK said:

Apr 18, 2024 14:52:18 GMT -5 @blue said:

SS gets raises too.

That's true. They get COLA, but not the ability of someone working to ask for a significant raise.

Ooh, there’s another angle! As a teacher I am in a union and cannot ask for a raise on my own or get a merit -based raise. (Yes, some places have tried merit raises and test score raises, but let’s set that aside for the moment.) is a union, salaried position a fixed income? I don’t HAVE to teach, so maybe it’s not technically fixed?

[raeoflyte]

Apr 18, 2024 21:08:40 GMT -5 Knee Deep in Water Chloe said:

Apr 18, 2024 14:55:52 GMT -5 ken a.k.a OMK said:

That's true. They get COLA, but not the ability of someone working to ask for a significant raise.

Ooh, there’s another angle! As a teacher I am in a union and cannot ask for a raise on my own or get a merit -based raise. (Yes, some places have tried merit raises and test score raises, but let’s set that aside for the moment.) is a union, salaried position a fixed income? I don’t HAVE to teach, so maybe it’s not technically fixed?

You have skills and abilities to move into other positions- so I definitely wouldn't call that fixed income. That's just being on a salary.

[resolution]

Apr 18, 2024 21:22:58 GMT -5 raeoflyte said:

Apr 18, 2024 21:08:40 GMT -5 Knee Deep in Water Chloe said:

Ooh, there’s another angle! As a teacher I am in a union and cannot ask for a raise on my own or get a merit -based raise. (Yes, some places have tried merit raises and test score raises, but let’s set that aside for the moment.) is a union, salaried position a fixed income? I don’t HAVE to teach, so maybe it’s not technically fixed?

You have skills and abilities to move into other positions- so I definitely wouldn't call that fixed income. That's just being on a salary.

So if someone retires, do they not count as being on a fixed income if their skills and abilities make them employable? Or do they count as a fixed income as soon as they retire with the intention of not going back to work?

[raeoflyte]

Apr 18, 2024 21:44:21 GMT -5 resolution said:

Apr 18, 2024 21:22:58 GMT -5 raeoflyte said:

You have skills and abilities to move into other positions- so I definitely wouldn't call that fixed income. That's just being on a salary.

So if someone retires, do they not count as being on a fixed income if their skills and abilities make them employable? Or do they count as a fixed income as soon as they retire with the intention of not going back to work?

Imo the distinction comes from choice or lack thereof. Trying to pass off a salary as fixed income is laughable. I wouldn't call retired with investments as fixed income even if you're living on just your SS income, because you have more options available if and when they're needed.

Fixed income to me is living on what you get from SS or disability, maybe a pension, but there is no rainy day fund. There isn't even an oh shit fund. There's little if any way of getting any other income. There's the money that's deposited on the first and you hope it lasts till the next deposit.

[Knee Deep in Water Chloe]

Apr 18, 2024 21:22:58 GMT -5 raeoflyte said:

Apr 18, 2024 21:08:40 GMT -5 Knee Deep in Water Chloe said:

Ooh, there’s another angle! As a teacher I am in a union and cannot ask for a raise on my own or get a merit -based raise. (Yes, some places have tried merit raises and test score raises, but let’s set that aside for the moment.) is a union, salaried position a fixed income? I don’t HAVE to teach, so maybe it’s not technically fixed?

You have skills and abilities to move into other positions- so I definitely wouldn't call that fixed income. That's just being on a salary.

(I’m really just arguing for argument’s sake.).
Technically, isn’t that true for anyone because they can change jobs? And for those who have retired?

And regarding the teaching portion—it’s really hard to have a second job when a 1.0FTE teacher. When people say “oh, you knew what you signed up for” when going into teaching, how is that different than someone not saving anymore retirement than social security?

[Knee Deep in Water Chloe]

Apr 18, 2024 21:44:21 GMT -5 resolution said:

Apr 18, 2024 21:22:58 GMT -5 raeoflyte said:

You have skills and abilities to move into other positions- so I definitely wouldn't call that fixed income. That's just being on a salary.

So if someone retires, do they not count as being on a fixed income if their skills and abilities make them employable? Or do they count as a fixed income as soon as they retire with the intention of not going back to work?

Please know that I’m not trying to be disrespectful—I love debating the meanings of words and phrases. And I’m really not in any way disparaging those who have true limitations.

What’s the difference between retirement and choosing not work?

[The Walk of the Penguin Mich]

Apr 18, 2024 14:52:18 GMT -5 @blue said:

Apr 18, 2024 14:50:40 GMT -5 ken a.k.a OMK said:

I think of fixed income as someone living on SS. When working there can be raises or overtime. 

SS gets raises too.

SS raises are usually offset by equal increases in Medicare premiums.

[resolution]

Apr 18, 2024 22:52:28 GMT -5 Knee Deep in Water Chloe said:

Apr 18, 2024 21:44:21 GMT -5 resolution said:

So if someone retires, do they not count as being on a fixed income if their skills and abilities make them employable? Or do they count as a fixed income as soon as they retire with the intention of not going back to work?

Please know that I’m not trying to be disrespectful—I love debating the meanings of words and phrases. And I’m really not in any way disparaging those who have true limitations.

What’s the difference between retirement and choosing not work?

I've been struggling with that distinction. I am officially retired because I met my employer requirements for separation from service by retirement based on my age and length of service, and I receive retirement income from them. But I feel kind of like I just am choosing not to work.

Some extended family are disbelieving that I am retired because I am not close to social security age, but I don't want to just say I quit my job because I don't feel like working anymore, since there are a ton of value judgements in that.

[giramomma]

Apr 18, 2024 22:52:28 GMT -5 Knee Deep in Water Chloe said:

Apr 18, 2024 21:44:21 GMT -5 resolution said:

So if someone retires, do they not count as being on a fixed income if their skills and abilities make them employable? Or do they count as a fixed income as soon as they retire with the intention of not going back to work?

Please know that I’m not trying to be disrespectful—I love debating the meanings of words and phrases. And I’m really not in any way disparaging those who have true limitations.

What’s the difference between retirement and choosing not work?

I'll bite.

Some people retire, and then work in retirement. While I wouldn't call that retirement, you do hear the phrase "having a job in retirement". You also can search on "retirement jobs" on indeed, and legit jobs come up.

AARP has a list of 25 jobs for retirees.

When I was 25, 30, and even 35, I would still teach even though I would be retired from my dayjob.

At 40, the switch happened. When I retire, I don't want to work anymore. I will be choosing to stop all work.

Someone I know retired from their dayjob only to start up a business. They joke about how busy they are working in retirement. 

I know very few people that actually stopped working completely in retirement.