Social Security

[wnlbutterfly]

I think I just shocked my DD (20) today. I told her I took my aunt to the Social Security office and they got the paperwork done for her to start getting her retirement. After working all these years, mostly home health care for elderly, she is going to get $665 a month.

I told my daughter this is why you have to plan for your own retirement. Not to mention that it might not be there for her when she retires.

I don't want to start a debate about SS, but I thought it was a great lesson for her to hear REAL numbers and to realize that isn't enough. Nothing like reality to open your eyes.

At some point my aunt had money into a 401k, but she had to leave that job. My mom said "but you could have put it into an IRA", and my aunt said "well...I needed the money then". I turned around and said "yeah...and look now....you NEED the money NOW don't you?". One of those family members that is "poor me" all the time.

[myrdale]

The fact your aunt did not have the indenpendence to make it to the social security office on her own tells me she has an uncomfortable retirement ahead of her.

Her inability to drive herself is due to health or finances I assume. At 65 health really shouldnt be an issue if she'd taken care of herself.

I'm also assuming she is either divorced or widowed. And not receiving any retirement either way from the ex-spouse. But more importantly has no partner to walk with her on the road ahead.

The "poor me" attitude suggest she isn't all that happy of a person either. Additionally it sounds like she doesn't have the best of relationships with you or your mother either.

Please forgive me if I do have the situation pegged wrong. My over all point is not so much directed at her, but a suggestion to your daughter, and it is this. Having a good retirement includes more that the number of dollars she is collecting each month. Though out her life, in addition to investing in the IRA, she could also invested in her health, and marriage, and family and her overall happyness. Doing this and she will retire wealthy beyond all measure.

[asmom]

Originally Posted by myrdale

At 65 health really shouldnt be an issue if she'd taken care of herself.

My goodness, that's quite an assumption, isn't it? You do realize all health problems are not the result of not taking care of oneself? I don't know about this lady's situation but just so you know........


As for the rest of the situation, the take away lesson for me is: take care of your business so that in the future you don't have to rely on family members who will only judge you and make you feel worse.

[myrdale]

Yes, as I said I was making quite a few assumptions.

Of course there are hundreds of thousands of people who are handicapped because of disease, birthdefects, accidents, and many things beyond their control. But I have had several family members who were handicapped because they smoked and didnt watch what they ate thoughout life. They abused themselves to the point that retirement was not an issue.

[Ima saver]

Well, I am getting social security and I receive $581 a month, a few dollars less than the aunt. I have never worked anywhere to get a pension and neither has my husband. I always knew that I would going to have to save a great deal of money in order to be able to afford to live in my old age.
Since my husband is still working, I am saving every dime of that social security check that I get every month.
It certainly pays to start saving early!!

[maat55]

Social Security should be discussed on this forum, from time to time, just for those lurking that think SS is a major part of retirement. SS was designed to be only a supplement to ones own retirement plan.

I'm not looking forward to needing the money. If I get it, it will be for splurging. Both of my older brothers are going to be in for a big surprise, but one that I have warned about.

[Inkstain82]

With a paid-off house, one person should probably be able to scrape by on that if need be.

Not that the OP's point is missed.

[disneysteve]

Originally Posted by Inkstain82

With a paid-off house, one person should probably be able to scrape by on that if need be.

That assumes a great deal. We live in a very modest home in NJ. Our property taxes are just over $7,000/year. That's $583/month right there. No way could someone survive here on $665/month if they own a home.

[Inkstain82]

Originally Posted by disneysteve

That assumes a great deal. We live in a very modest home in NJ. Our property taxes are just over $7,000/year. That's $583/month right there. No way could someone survive here on $665/month if they own a home.

That's true. I'm assuming the person doesn't live in a high-cost area.

Actually, that's not even true. I've spent my entire life in very low-cost areas, so that colors my perception quite a bit.

[marvholly]

Couple other points for OP to review w/ aunt:

is there a late/ex spouse on whose account she might qualify for a higher benefit. I know for me there is a $400/month difference in qualifying on my own vs. late hubby's account.

Is the $665 her ENTIRE income (or nearly)? If yest then she should qualify for SSI.

She/you should also explore getting her food stamps and see if she can get help w/ her utilities.

There are MANY programs out there. Try to make contact w/ a social worker from her town/city.

[wnlbutterfly]

Okay...a few more facts. My aunt can drive (but about the worse driver in the world...seriously), but she gets lost easy and she puts things off. She is still working for home health but they moved her into the office for most of her hours because she just can't do the heavy lifting. We think most of the "poor health" is in her mind. You know, the kind of person that watches a medical ad on TV and then thinks she has whatever it is and needs meds for it. She will have to cut her hours down a little bit next month. So there will be more money coming in than just the SS.

No drugs, no smoking, no alcohol.

She is married, he is on disability payments. He gets just a little over $1,000 on that a month. They still have house payments, but not very high (lets guess $400 if that). They have a poorly insulation house with a very bad heating system and end up with $400+ gas payments a month during the winter. But yet they will say they can't "afford" a new heater or "afford" to have insulation installed.

Even though they aren't making a lot of money (she gets $9 an hr). Their son that makes $18 an hr still borrows money from them. And some of her husband's family comes through and borrows money. She doesn't loan money but her husband does. I think it makes him feel like a big man, maybe feel needed, but it is keeping them strapped. OH, and he works for the same home health care (which is owned partly by his sister) doing paperwork and answering phones but he won't accept any wages because he is afraid of losing disability payments. Even though we have told him he could earn money and not lose it. They don't listen nor bother to find out the facts.

The car is almost paid off and the husband said "guess we will have to start looking for another car". She said "I don't think we need another one". But he is the type that thinks they HAVE to have a car payment. I am hoping we convinced her she is right and it can wait.

He even borrowed $300 from the bank to give to his son, just because his son was overdrawn. Son is 26ish, married, 2 kids and already filed bankruptcy once.

Yes, low-cost area. I would guess property taxes on their dump, I mean house, would be maybe $800 a year.

My aunt isn't a happy person and never has been. Always sees the negative in everything instead of the positive. She could have 10 good things happen in a day, and 1 bad, and it would only be that one bad thing she would tell you about.

She would always say she can't afford to retire and we would try to tell her that there is no way she would end up being 90 yrs old and still cleaning houses for the "elderly", like 70 yr olds. My mom would try to tell her if she had the house paid off and the car paid off, that they would do okay, but that would mean not handing out money to family that knows you don't really expect it back.

[wnlbutterfly]

A report should be coming out about SS/Medicare. This was also in the article:

"For years, the Social Security trust fund has taken in more than it spent on benefits, resulting in a cushion of billions of dollars that the government could spend on other programs while giving the trust fund an IOU."

To me this is the problem, they could have used all that "cushion" and earned money on it to keep SS fully funded. The article went on to say that in 2017 they will pay out more than they take in and by 2041 it will be depleted unless something is done. Of course the new numbers could say otherwise, they expect it to be worse due to the recession (less people working, less money going into SS).

2017 isn't that far down the road.

[techguru]

I'm mad because I can't put the article link in here yet, but I just read on WiredNews that medicaid and Social Security are both struggling. Google it and i'm sure you'll find it.

[myrdale]

Originally Posted by disneysteve

That assumes a great deal. We live in a very modest home in NJ. Our property taxes are just over $7,000/year. That's $583/month right there. No way could someone survive here on $665/month if they own a home.

Obviously it is not like this everywhere, but I believe in Alabama, after 65 you are no long required to pay property taxes. I will confirm that this evening.

To the OP, it sounds like most of my assumptions were not valid in your aunts case. Glad to hear.

[disneysteve]

Originally Posted by myrdale

Obviously it is not like this everywhere, but I believe in Alabama, after 65 you are no long required to pay property taxes.

NJ has a property tax rebate program but budget cuts have been gradually cutting into that program. I think the average rebate for senior homeowners last year was about $1,200. That wouldn't make a whole lot of difference if your taxes are $10,000 or more. As I said, our taxes are $7,000 but our home is on the low end. I know plenty of people who are paying $12,000 and up.

[swanson719]

I don't plan on SS being there, but as it was earlier mentioned, it's intended as a supplement to ones own retirement plan. As to Disneysteve's comment that it would pay property taxes and not much more in NJ, while that's true, I think a lot of people retire to low(er) COL areas. You can still be within driving distance of family and not be in a high COL area if that's where you're from.

[disneysteve]

Originally Posted by swanson719

I think a lot of people retire to low(er) COL areas.

True, but how many do it because they want to and how many do it because they have to? There's a big difference between the two.

In this area, many seniors have no choice but to move as they simply can't afford to stay where they are. Even with a paid off home, SS, maybe a pension and a decent sized nest egg, the property taxes drive them out of the state.

[swanson719]

It all depends on what you do during your working age. It's not like property taxes or other fixed things go up at an unpredictable rate. They may get raised a percent or two every few years, but that's part of retirement planning. If someone wants to live in a high COL area, they need to save more during their career. So if you know property taxes are $7,000 a year, then you need to add at least $175,000 to the amount you need to retire, planning for a 25 year retirement. If they are happy moving to a lower COL area, then they can live higher on the hog throughout life and not save that $175,000+.

There was a thread a few weeks ago about this generation needing an average of $3 Million to retire comfortably, but I don't imagine 3 million will be enough if you live in the strip from Boston to D.C. or other major urban areas. A million might be enough in Wyoming, but that might only last a few years in NYC 40 years from now.