Wants To Retire, No residual Income

[james.hendrickson]

Guys

A friend of mine on Facebook reached out with a question:

Here is our Facebook messenger exchange.

In effect, she is asking how her friend can retire in a few years with no residual income.

This isn't a question I've come across a lot, so I wanted to post it here for the forum's feedback.

[ua_guy]

I understand residual income to be money that flows after an initial investment. Like a rental property that generates more money than expenses.

If he doesn't have that or anything else, then I hope he has a bunch of saved up money? Else, no retirement.

[bjl584]

Keep working until SS kicks in?

Not really enough info here to provide a good answer.

[disneysteve]

Need more info. What does “no residual income” mean exactly? Does he have any savings or investments? Any retirement plan? Any pension?

If there’s truly nothing put away, there’s really no choice but to work until SS. That’s what millions of people do. And even then many have to keep working because SS isn’t enough for them to live on.

[crazyliblady]

Guys

A friend of mine on Facebook reached out with a question:

Here is our Facebook messenger exchange.

In effect, she is asking how her friend can retire in a few years with no residual income.

This isn't a question I've come across a lot, so I wanted to post it here for the forum's feedback.

What about being a building supervisor in an apartment building in exchange for free rent? That could seriously cut expenses and enable him to save up some money.

[myrdale]

He is 59 and wants to retire. Does that mean he wants to retire right now or in 6 years?

I hate always responding with "they need a budget" but here I think it is even more so. Does he rent or live in his own home? Is it paid off and a how about taxes and utilities? Basic living expenses? Medical cost? And for discretionary spending, does he plan to sit on the front porch for the next 25 years or does he want to travel (or what ever)?

If he has a decent job/income, he can start packing away into a Roth IRA or 401k for the next few years maybe.

If he wants to retire in 6 years I think we can get there.

If he wants to retire tomorrow, I'll leave my response as good luck.

[myrdale]

I did find one source that said the average annual income from social security is $22,000. Assuming he has no other sources of income, that about what he will have to work with, assuming he has paid into the system.

Honestly if he can buy 1 acre of land for $10k, and purchase a used trailer for $10k, that would have his living arrangements resolved. I'd consider setting up somewhere in the south to save on the heating bills during the winter and somewhere with a low cost of living.

[Petunia 100]

I hope that the friend will supply more details. This could be a very interesting discussion.

[bjl584]

This honestly looks like a spam message. Has this person ever responded to you, and are you having an active discussion with them, or was it just a one off message?

[james.hendrickson]

This honestly looks like a spam message. Has this person ever responded to you, and are you having an active discussion with them, or was it just a one off message?

Yeah, we are friend on Facebook and we've chatted a couple of times. Its a legit question.

[bjl584]

Yeah, we are friend on Facebook and we've chatted a couple of times. Its a legit question.

Do you have any more details from them that you can share?
Everyone has stated that we need more info to be able to answer their question.
Thanks

[LivingAlmostLarge]

If you only make SS, depending on how much he will likely qualify for medicaid depending on where he lives. Then he can get section 8 housing, food stamps, and no medicare payments. It really depends on what he has. No house? Only rented. No savings only SS.

Now it's not exactly a fabulous life but it's not exactly terrible if that's what life has dealt you. My great grandmother made $514 from SS. My grandma now around ~$900 plus a small pension of $114. Both have all the welfare benefits. So it can work out. You just life super simply and hope your family can help. PS knowing how to apply for all the benefits help. My grandma now makes like $500 a month food stamps (COL adjustment for hawaii). She lives with my aunt and gets 28 hours of free home health aide care a week. She also has medicaid for her supplemental and doesn't have to pay for medicare. So it's all relevant. Her $1000/month income is worth a lot more because she isn't paying out anything and gets lots of "perks".

[QuarterMillionMan]

I can retire today at age 60, my pension would be $2920 a month but it would be tough to live with such a paltry amount but I'm lucky to be getting it. If I can work another 4 years and retire at 64 my pension would be over $4000 a month. If I retire today for health insurance I would have to pay 12% of $1000 for my health insurance. At 61, I'd pay 8% for health insurance. At 62, I'd pay 4% for health insurance. At 63, my health insurance would be covered in full at 100% covered. Age 63 would be my ideal retirement but if something happens before then, I'd go today if needed.

[QuarterMillionMan]

$4460 would be my pension in 2030.

[ua_guy]

I can retire today at age 60, my pension would be $2920 a month but it would be tough to live with such a paltry amount but I'm lucky to be getting it. If I can work another 4 years and retire at 64 my pension would be over $4000 a month. If I retire today for health insurance I would have to pay 12% of $1000 for my health insurance. At 61, I'd pay 8% for health insurance. At 62, I'd pay 4% for health insurance. At 63, my health insurance would be covered in full at 100% covered. Age 63 would be my ideal retirement but if something happens before then, I'd go today if needed.

The world is your oyster. Does it feel good to know you've made it to a level where you can retire today if you needed to?

What will you do once you retire?