explaining how to retire poor

[Nutria]

Fishindude's MIL is my grandma. ... live with my aunt.

Elderly people living by themselves is definitely a recent (compared to how long people who survive childhood have been living into their 70s) societal aberration, as is super-expensive medical care.

That means the need to have lots and lots of money saved up is also a recent societal aberration.

[LivingAlmostLarge]

Fishindude's MIL is my grandma. She lives on $1100/month I think SS and that's it. She has medicare and medicaid and live with my aunt. She SNAP and anything else they cover based on income. Never owned property, no savings, nothing.

[disneysteve]

if I was getting assistance for many of the basic things, I would find it very uncomfortable and very worrying.

My mom lives in subsidized housing, gets a break on her electric bill and phone bill, gets prescription assistance through PAAD, and I think gets a few other discounts based on her income. She lives quite comfortably and has everything she needs or wants.

Her situation is different than Fishindude77's MIL though because my mom does have savings of about 400K last time I checked. She gets SS but also draws some income from her investments but her taxable income still qualifies her for a variety of assistance programs. I certainly wouldn't classify her as "poor and broke" though.

[LivingAlmostLarge]

I agree with you that retirement goals are individual. But, if I was getting assistance for many of the basic things, I would find it very uncomfortable and very worrying.

It really depends I'm starting to think on how you are used to living pre-retirement.

[Like2Plan]

That can only be answered once you define "comfort". More importantly, must retirement have to be comfortable, or does it have to be just good enough to meet the bottom few layers of Maslow's hierarchy?

I agree with you that retirement goals are individual. But, if I was getting assistance for many of the basic things, I would find it very uncomfortable and very worrying.

[Nutria]

But, is it a comfortable retirement?

That can only be answered once you define "comfort". More importantly, must retirement have to be comfortable, or does it have to be just good enough to meet the bottom few layers of Maslow's hierarchy?

[Fishindude77]

My mother in law has zero savings, gets about $900 per month SS and lives quite well. She lives in a really nice newer, subsidized housing, apartment complex, with very cheap rent, her utility bills are subsidized, she gets SNAP benefits for way more than she can eat, federal healthcare, etc. She has money to take care of all of her needs, pay car insurance, go out to eat and shop, etc. She's happy.

My wife and I do subsidize her a bit; bought her a cheap car, she's on our cell phone plan, have paid a few bills here and there, but otherwise she has what she needs. There are also a lot of other freebee programs out there such as public transportation, things at the senior centers, etc. that she doesn't use. You can live pretty decent in America poor and broke.

Having said the above, I would not discourage a 73 year old from continuing to work and contribute. In many cases it's the work that keeps them going and gives them purpose.

[Nutria]

She does own her home and have a car.

What happens when they need repair?

[LivingAlmostLarge]

It looks like this might vary from state to state.

https://www.chcs.org/media/Medicaid-Adult-Dental-Benefits-Overview-Appendix_091519.pdf

Anyway, I wouldn't wish retiring poor on anyone. I know why the kids are are concerned. Are there safety nets in place if you don't have any choice in the matter? I believe there are. But, is it a comfortable retirement?

I don't know. I guess it's not exactly comfortable living on $1300 a month a couple. But when she can get say $1500 for a single it seems a lot more comfortable. I quite get it either.

[Snicks]

I think she would like to retire but they took her to their CFP who scared her into she could never retire. Truth is that she lives so simply that she doesn't need much. She doesn't earn much or spend much. She does own her home and have a car. I don't think she earns much is they imply but she lives super simply. And I know that dentures and hearing aides have been covered by medicaid (grandparents had both). I dont know what she nets but they worry about her so much and I really wonder what for?

That's my point. The CFP has an expectation of a middle class lifestyle so she can never retire. But she doesn't live middle class now. She lives very "poorly" but more than enough for her now so why does she need more? I bet what she makes in SS would cover how she lives now.

My point is that we make retirement this huge deal of saving but in some ways retirement is like college. Does everyone need the same amount? Does everyone have the same wants and needs? How are some people able to retire and live on so little? Is it they just live cheap? Where they live? Or is it that retirement is really dependent on what you expect of it? Like college. Does everyone have to go? What happened to people not going and still doing okay?

Maybe we don't need to save as much as people think. I constantly think of MonkeyMama saying they save less than what others do because they turbo charged in 20s. They also live on less so they need less, so the amount needed seems a lot smaller. I'm coming to that realization even for myself. Before a year ago I would have said I definitely need a lot. Now I'm seeing that it's not that hard to live on less. And need for less taxes because we live on less.

That is a good point. A CFP is probably always going to tell someone "oh you don't have enough".

[myrdale]

No retirement savings is only part of the picture.

Is she debt free or is there $50,000 in credit cards and car payments? Is she renting or does she own her home? Does she have money in savings, or is she completely broke living paycheck to paycheck?

[Like2Plan]

And I know that dentures and hearing aides have been covered by medicaid (grandparents had both). I dont know what she nets but they worry about her so much and I really wonder what for?

It looks like this might vary from state to state.

https://www.chcs.org/media/Medicaid-Adult-Dental-Benefits-Overview-Appendix_091519.pdf

Anyway, I wouldn't wish retiring poor on anyone. I know why the kids are are concerned. Are there safety nets in place if you don't have any choice in the matter? I believe there are. But, is it a comfortable retirement?

[disneysteve]

I bet what she makes in SS would cover how she lives now.

You said that she is working and collecting SS and has no savings. That implies she is spending all that she makes. If she loses the work income and only has SS, how do you know that would be enough?

My point is that we make retirement this huge deal of saving but in some ways retirement is like college. Does everyone need the same amount? Does everyone have the same wants and needs? How are some people able to retire and live on so little? Is it they just live cheap? Where they live? Or is it that retirement is really dependent on what you expect of it?

Maybe we don't need to save as much as people think.

Certainly how much you need depends on how much you want to have. That's the point of the 25x expenses estimate. If you want to be able to spend 100K/year, you need $2.5 million. If you only want to spend 10K/year, you only need 250K. And both of those numbers get adjusted for SS and any other income sources.

Before a year ago I would have said I definitely need a lot. Now I'm seeing that it's not that hard to live on less. And need for less taxes because we live on less.

This is a great point. I think COVID "broke" a lot of us and fundamentally altered our concepts of how much we need to live happily. In 2019, our average monthly spending was around $7,000. In 2020, 9 month of which was "COVID time", our monthly spending was about $6,000. In 2021 YTD, all "COVID time", our spending has been just over $5,000/month. We are now spending $2,000/month less than we did 2 years ago. Are we unhappy? Not at all. Yes, I miss dining out. Yes, I miss traveling. But not nearly as much as I thought I would. If I had to live the rest of my life like this, that wouldn't be all that bad. The $24,000/yr difference in spending means $600,000 less needed in savings to support our lifestyle. That's a big deal and could clearly alter retirement planning.

[LivingAlmostLarge]

I think she would like to retire but they took her to their CFP who scared her into she could never retire. Truth is that she lives so simply that she doesn't need much. She doesn't earn much or spend much. She does own her home and have a car. I don't think she earns much is they imply but she lives super simply. And I know that dentures and hearing aides have been covered by medicaid (grandparents had both). I dont know what she nets but they worry about her so much and I really wonder what for?

That's my point. The CFP has an expectation of a middle class lifestyle so she can never retire. But she doesn't live middle class now. She lives very "poorly" but more than enough for her now so why does she need more? I bet what she makes in SS would cover how she lives now.

My point is that we make retirement this huge deal of saving but in some ways retirement is like college. Does everyone need the same amount? Does everyone have the same wants and needs? How are some people able to retire and live on so little? Is it they just live cheap? Where they live? Or is it that retirement is really dependent on what you expect of it? Like college. Does everyone have to go? What happened to people not going and still doing okay?

Maybe we don't need to save as much as people think. I constantly think of MonkeyMama saying they save less than what others do because they turbo charged in 20s. They also live on less so they need less, so the amount needed seems a lot smaller. I'm coming to that realization even for myself. Before a year ago I would have said I definitely need a lot. Now I'm seeing that it's not that hard to live on less. And need for less taxes because we live on less.

[Snicks]

I would be a bit leary of telling someone "oh yeah you can retire on nothing and get Medicaid". There are all kinds of expenses in life. Could she do and it survive? I suppose. Maybe she LIKES working. It gives her purpose, something to do, a way to contribute, etc. If she is getting health insurance as well, that is a big plus and a lot of value.