What happens to people that don't save for retirement?

[BPA]

I agree with the Greaper that many people find themselves in bad circumstances due to no fault of theer own.  I was a social worker at one point in time.  Yes we all know some people that blew all their $ but many have had devastating medical bills, illness, un or under employment, etc.  I spent the last 24 years of my working career helping people with disabilities return to work.  By the time we saw these people they usually had lost everything due to not being able to work, not having necessary resources to help them find work.   WE provided the necessary services that got them back to work. Sure some were losers but MOST were not!  I always used to say "there but for the grace of God go I."   It doesn't matter how much education you have-one accident or illness can take away your livelihood.

Thank you so much for this post. 

[fartface]

Did anyone ever have any luck convincing spendthrift parents at or near retirement age to reduce spending? If so, any tips? :)

SH!T-- I cannot imagine this. And yet, several MMM posters, share this about their very own parents.

My parents both retired before age 50 (a dozen or more years ago) due largely in part to my Dad being able to claim his pension after 25 years of service + medical. That, coupled with a home that had been paid off 20 years prior, set the stage for their ER.

Last spring, my Dad was FINALLY eligible for SS at age 62 after being 12+ years retired already.

 

[mindaugas]

My mom lives with me in my basement and works part time online.

[OutBy40]

They end up doing what my grandfather did - live entirely off of social security and pull out way, way more than he ever put in.  Basically, getting supported by the taxpayer.

[FarmerPete]

My in-laws are approaching this issue right now.  My FIL was self employed for most of his working career.  He had a failing business pretty much that entire time.  He stuck it out and ended up hardly being able to put food on the table and shuffling around payments to the different providers to stay 1 step away from getting the utilities turned off.  Obviously, retirement wasn't an option for him.  He decided to retire in his early 60's and closed the business.  He was probably losing money anyways.  My MIL was a SAHM and helped out at the business when she could.  The last 10-15 years, she's been working as a LPN at a nursing home pulling a modest wage.  They are currently living off his SS and her paycheck.  The problem is, they live in a nice town in NJ right outside NYC.  Their property taxes alone are 10k a year.  I hardly pay 10k for my mortgage+insurance+taxes living in the midwest!  Basically, they are going to have to move when my MIL retires.  It would have been a tough situation, but unfortunately, my FIL had a brain tumor and while it's been removed, he's not fully there.  They spend money recklessly, and their house is falling apart.  Their only hope is that they can sell their house for decent money.  The house is a pit, but the land has value to a developer.  They could tear down their hobble and build a 1m home on it easily.  If they can sell it for ~300-400k, they could turn that into an annuity* and get 2k a month for life.  Mix that in with SS, and they should be in decent shape.

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*I don't typically recommend annuities, but in this case I think it's a good plan.  My FIL is the kind of guy that if he had access to $300-400k would blow it all in a year.  I like that buying an annuity locks in the income and removes most of the risk, especially if you split the investment between multiple companies.  Even if we could keep my FIL away, my MIL would probably spend more than the SWR would allow.  I just don't see themselves limiting themselves to 2k a month if they have that much in the bank.

[MrFancypants]

They end up bitching that they don't get enough from social security while bitching that they pay too much in taxes.
(While still being wilfully financially illiterate enough to not see a relationship between those two things.)

This isn't unique to people who don't/didn't save.  Everyone complains about paying too much in taxes and getting too little out of SS.

[TreeTired]

His cable is $90

Blows my mind that someone on a subsistence budget allocates $90 for cable, presumably TV and internet.  I know people of relative means that get by with a TV antenna and park outside of Barnes and Noble to check their email on the free wireless internet.

[FarmerPete]

His cable is $90

Blows my mind that someone on a subsistence budget allocates $90 for cable, presumably TV and internet.  I know people of relative means that get by with a TV antenna and park outside of Barnes and Noble to check their email on the free wireless internet.

On a cost per hour basis, that $90 a month may be the best value for your money.  Even driving to Barnes and Noble for "Free" internet costs $$$.  Presumably, you're talking about driving several miles each way to get there and during the winter/summer you may need to run the car for heat/AC (remember, old people are more susceptible to cold and heat).  Or you can pay $25 a month and not have to get off your butt.