73, unemployed, and $80,000 underwater on home, with more debt on the side

[MrMoneyMullet]

This isn't funny. This is sad. I'm afraid this is the type of situation almost every Boomer and Millennial is going to be in if most people don't change their ways:

Glen emails: I am 73 years old, and have been unemployed for over 3 years. My retirement savings and unemployment benefits have been exhausted and all I have now is Social Security. My wife is working 30 hours a week for $11 an hour. Our home is underwater by about $80,000 but moving to a smaller place would only save about $200 a month. We did a loan reorganization a couple of years ago to get the interest down to 2%. Also, since my hip replacement surgery, I am not physically capable of doing some jobs that are advertised. Some people have said our situation is hopeless. What should I do?

Check out the full article if you want the response (basically, he says to keep making the house payments and find a way to work from home):
  http://finance.yahoo.com/news/ask-farnoosh--i%E2%80%99m-unemployed-and-underwater--is-my-situation-hopeless--151431080.html

Not once does the columnist mention trimming expenses, and I find it rather annoying that they don't state the actual financials of the situation. What's the house payment? What's the monthly SS payment? What are their loan balances?

Side note: You probably already knew this, but don't go to Yahoo's personal finance section unless you're looking for antimustachian comedy and/or advice.

[the fixer]

Sounds like another good candidate for disability! :)

https://forum.mrmoneymustache.com/off-topic/the-startling-rise-of-disability-in-america/

[gdborton]

Finally a shame post that I can get behind!

I want to know how people get into these situations... like what goes through a person's mind while the world crashes around them, and yet they don't react until it is too late?

[mpbaker22]

Our home is underwater by about $80,000 but moving to a smaller place would only save about $200 a month.

If I could save 20+% of my monthly budget, I'd jump all over it!  How can someone act as if $200/month is trivial when they are less than broke!?

[MrMoneyMullet]

Finally a shame post that I can get behind!

I want to know how people get into these situations... like what goes through a person's mind while the world crashes around them, and yet they don't react until it is too late?

I read a psychology article a few months ago about this... I think it basically said that it is human nature to avoid pain in any form. Even a mild pain in the present (which could avoid a significant amount of pain in the future) is often enough to stifle action. So, basically, people just pretend everything's going to be OK or hope that it's going to be OK until there is absolutely no other option. I'll post the link if I can remember where the heck that article was...

[gdborton]

Our home is underwater by about $80,000 but moving to a smaller place would only save about $200 a month.

If I could save 20+% of my monthly budget, I'd jump all over it!  How can someone act as if $200/month is trivial when they are less than broke!?

Ironically $200 a month works out to $60,000 of retirement savings at a 4% withdrawal.  Almost as much as his :underwaterOHNOES: amount.

[SMMcP]

[/quote]

Ironically $200 a month works out to $60,000 of retirement savings at a 4% withdrawal.  Almost as much as his :underwaterOHNOES: amount.
[/quote]

Very good point.  This is one thing I learned from Jacob on Early Retirement Extreme, how to look at monthly expenses in terms of how much savings/investment it would take to generate the required income.

[SwordGuy]

I bet they were "surprised" to find themselves in this mess.  Totally unexpected.  Someone else must surely be to blame for it.

[MrMoneyMullet]

I bet they were "surprised" to find themselves in this mess.  Totally unexpected.  Someone else must surely be to blame for it.

Well yeah, they've been unemployed for three years and applying to jobs online, so it's obvious that there are NO JOBS anywhere, ever. And with the economy the way it is, how is anyone going to get ahead? Don't you watch the news? [/sarcasm]

[mobilisinmobili]

When I used to work at a bank, I'd see this all the time.

75 years old.. overdraft maxed, CCs maxed, personal line of credit maxed, huge mortgage. Unless you can start some kind of income generating business at that age you can be pretty much hosed.

Often accompanied by seeing lots of lottery / gambling charges on their account.

[MrMoneyMullet]

When I used to work at a bank, I'd see this all the time.

75 years old.. overdraft maxed, CCs maxed, personal line of credit maxed, huge mortgage. Unless you can start some kind of income generating business at that age you can be pretty much hosed.

Often accompanied by seeing lots of lottery / gambling charges on their account.

That is really sad. I wish I was better at influencing my friends and family in making better decisions so they don't end up broke.