America’s 60-Year-Olds Are Staring at Financial Peril

[DrQ]

I worked for a company for 13 years and took a voluntary RIF prior to selling part of the business to another company. I had accrued a pension during that time. Later, employees were converted to 401k plans.

When I tuned 65 I had the following options:

• Pension of $406/mo while I am still alive
• Pension of ~$300/mo with 50% survivor benefit for spouse
• Pension of ~$200/mo with 75% survivor benefit for spouse
• $75,000 lump sum

I took the lump sum and rolled it into my IRA.

 

[HitchHiker71]

Their real money comes from having almost no expenses. It's simple to get ahead as a Senator when cost of living is close to zero, and income is $175K. Their time in Washington is nearly all on the taxpayer's dime. Their home office is, too. And all they have to do is find some minor reason for their travel to be "official business" and they can vacation for free. Even easier for Presidents, who have absolutely zero expenses and $400K per year.

Up until June 2023, this wasn't true. Prior to changes in rules, Congress members were not able to obtain reimbursement for any rent, meals, etc. After June 2023, Congress members can receive, for "official business" days, per diem of up to $258 for apartment/hotel expenses, and up to $79 per diem for meals and incidentals (same limit as any other Federal employee). Even at those rates, that doesn't get you very far in D.C. for hotels and meals. Many Congress members share apartments and other living expenses as a result.

Besides, most people don't run for national office unless they're already wealthy. I'm not suggesting that there isn't plenty of corruption inside the beltway. But it's possible to leave the house or senate as a straight-arrow, and still be wealthy thanks to basic compound interest.

The lobbiests make all the money - that's why there's a revolving door between K street and Congress - many ex-Congress members end up working on K street making hundreds of thousands of dollars per year in return for their votes prior to moving to K street.

 

[AlmostRetired]

Congressmen also have the ability to get rich from insider trading. Most are millionaires by the time they leave office. My biggest beef with their pension system is that we have to follow rules that they make, but they can live by different rules.

I think we are both in agreement

 

[ScoopKona]

Up until June 2023, this wasn't true. Prior to changes in rules, Congress members were not able to obtain reimbursement for any rent, meals, etc.

I had a girlfriend who worked for a Senator in the 1980s. The Senate cafeteria served outstanding food (and not just Bean Soup.) And pretty-much everything was expensed. This was one of those "lifer" Senators. Didn't quite die in office. But damned near close. This senator didn't need money. But also didn't spend money.

 

[easyrider]

Their real money comes from having almost no expenses. It's simple to get ahead as a Senator when cost of living is close to zero, and income is $175K. Their time in Washington is nearly all on the taxpayer's dime. Their home office is, too. And all they have to do is find some minor reason for their travel to be "official business" and they can vacation for free. Even easier for Presidents, who have absolutely zero expenses and $400K per year.


Besides, most people don't run for national office unless they're already wealthy. I'm not suggesting that there isn't plenty of corruption inside the beltway. But it's possible to leave the house or senate as a straight-arrow, and still be wealthy thanks to basic compound interest.

There is wealthy and there is an insider wealthy. How does a politician start out with a regular salary and end up with over $120,000,000 ?

Bill

 

[HitchHiker71]

I had a girlfriend who worked for a Senator in the 1980s. The Senate cafeteria served outstanding food (and not just Bean Soup.) And pretty-much everything was expensed. This was one of those "lifer" Senators. Didn't quite die in office. But damned near close. This senator didn't need money. But also didn't spend money.

Yes, the Congressional dining rooms, and there are a few, all serve good food, and there’s one explicitly only available for senior members, where upscale food is always being served and the members, within reason, can request whatever they want.


Sent from my iPhone using Tapatalk

 

[DrQ]

Heartbreak as Vietnam veteran, 82, with incredible work ethic says he can't afford to retire from janitor job at Las Vegas McDonald's​

Vietnam veteran, 82, says he can't afford to retire from McDonald's

Edward Eubanks has worked at the Henderson McDonald's - just outside of Las Vegas - since 2009, where he keeps the dining room in tip-top shape by cleaning the tables and stocking the drink station.

www.dailymail.co.uk

 

[ScoopKona]

From the story:

"Throughout his life, he hasn't been able to save for his retirement with any of the previous jobs he's held, he told the local news outlet, but he still hopes to one day."

Bull[excrement]. He worked for the Nevada Test Site, which is one of the best-paying gigs in the entire state. He should have stayed out of the casinos and saved instead.

A lifetime of FAFO come home to roost. Las Vegas is a magnet for such people.

 

[joestein]

Heartbreak as Vietnam veteran, 82, with incredible work ethic says he can't afford to retire from janitor job at Las Vegas McDonald's​

Vietnam veteran, 82, says he can't afford to retire from McDonald's

Edward Eubanks has worked at the Henderson McDonald's - just outside of Las Vegas - since 2009, where he keeps the dining room in tip-top shape by cleaning the tables and stocking the drink station.

www.dailymail.co.uk

First... he has been there for 15 years - it wasn't his career. P. He worked a career of 29 years at Nevada National Security site - which is part of the Army. So - he has a federal pension. This is his part time job to help with his finances or maybe to go on vacation with.

Just more spun articles that leave out much of the truth. Maybe he can't afford to make ends meet or maybe he is like to vast majority of Americans who spend every penny they earn or can borrow. Plenty of poor people who wouldn't think of passing up Starbucks or fast food.

People retirement tend to be a cumulation of their choices in life - good and bad. Sadly - most make bad choices.

 

[dagger1]

I had a girlfriend who worked for a Senator in the 1980s. The Senate cafeteria served outstanding food (and not just Bean Soup.) And pretty-much everything was expensed. This was one of those "lifer" Senators. Didn't quite die in office. But damned near close. This senator didn't need money. But also didn't spend money.

Wonder who’s spending all “his” money now?

 

[dagger1]

From the story:

"Throughout his life, he hasn't been able to save for his retirement with any of the previous jobs he's held, he told the local news outlet, but he still hopes to one day."

Bull[excrement]. He worked for the Nevada Test Site, which is one of the best-paying gigs in the entire state. He should have stayed out of the casinos and saved instead.

A lifetime of FAFO come home to roost. Las Vegas is a magnet for such people.

 

[dagger1]

There is wealthy and there is an insider wealthy. How does a politician start out with a regular salary and end up with over $120,000,000 ?

Bill

I think we can guess….

 

[Brett]

From the story:

"Throughout his life, he hasn't been able to save for his retirement with any of the previous jobs he's held, he told the local news outlet, but he still hopes to one day."

Bull[excrement]. He worked for the Nevada Test Site, which is one of the best-paying gigs in the entire state. He should have stayed out of the casinos and saved instead.

A lifetime of FAFO come home to roost. Las Vegas is a magnet for such people.

yeah, I don't click on dailymail clickbait.

Where are the dailymail news articles about hardworking veterans that keep their pensions and savings ?


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meanwhile ...

Baby Boomers’ Good Times Drive the Economy​

https://www.wsj.com/us-news/baby-boomers-drive-economy-d4b72e40

 

[DrQ]

... Maybe he can't afford to make ends meet or maybe he is like to vast majority of Americans who spend every penny they earn or can borrow. Plenty of poor people who wouldn't think of passing up Starbucks or fast food.

People retirement tend to be a cumulation of their choices in life - good and bad. Sadly - most make bad choices.

Most likely true, spent it as fast as he earned it. It still goes to show where you end up when you don't approach life with a plan.

Longest employment stint was a "radiation monitor", then as an "assistant" to a handyman. Essentially he has no skills. It could be that he has always been marginal or he came out of the military with PTSD.

Given he is very routine driven, very loyal, I'm thinking that he could be someone who is on the spectrum who is very high functioning. Before casting all these nasty aspersions, you might also consider that possibility. If that is the case, I would have to admire him.

 

[ScoopKona]

Baby Boomers’ Good Times Drive the Economy​

...Right Into the Ground

 

[joestein]

Most likely true, spent it as fast as he earned it. It still goes to show where you end up when you don't approach life with a plan.

Longest employment stint was a "radiation monitor", then as an "assistant" to a handyman. Essentially he has no skills. It could be that he has always been marginal or he came out of the military with PTSD.

Given he is very routine driven, very loyal, I'm thinking that he could be someone who is on the spectrum who is very high functioning. Before casting all these nasty aspersions, you might also consider that possibility. If that is the case, I would have to admire him.

While I might have been casting aspirations about how he handled his finances. At least my comments are based upon facts of his employment in the article. Your aspirations are based upon being devil's advocate to my comments.

 

[Brett]

...Right Into the Ground

Well, a boomer. or maybe a Gen Xer

 

[Carolinian]

We have found residential rental property to be a good way of producing income for retirement, although my wife is still working for now and I am semi-retired, doing a little legal work and an occaisonal short term stint overseas. Over the last four years, although living costs have skyrocketed with inflation, the value of our rental properties has doubled during that period and our rental rates have increased 40%, so it has done well with keeping up with inflation while producing a dependable income stream. We look to hard assets, and while most of our funds are in residential rental real estate, we also have a good cache of precious metals, too, which have also appreciated nicely, although they do not provide an income stream.

We have been to several seminars, mainly for the free steak dinners, on annuities, but we steer clear of dollar denominated assets. The stock market is overvalued, and who knows if it will keep going up or have a major correction or worse.

 

[joestein]

Well, a boomer. or maybe a Gen Xer




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As I said before, most people's financial situation is due to the choices they make in life. We have always chosen to spend less. Most choose to spend the most they can.

We have friends who make less money than us but spend like they make twice what we make. Meanwhile, they worry about affording retirement.

 

[HitchHiker71]

We have found residential rental property to be a good way of producing income for retirement, although my wife is still working for now and I am semi-retired, doing a little legal work and an occaisonal short term stint overseas. Over the last four years, although living costs have skyrocketed with inflation, the value of our rental properties has doubled during that period and our rental rates have increased 40%, so it has done well with keeping up with inflation while producing a dependable income stream. We look to hard assets, and while most of our funds are in residential rental real estate, we also have a good cache of precious metals, too, which have also appreciated nicely, although they do not provide an income stream.

We have been to several seminars, mainly for the free steak dinners, on annuities, but we steer clear of dollar denominated assets. The stock market is overvalued, and who knows if it will keep going up or have a major correction or worse.

Agreed - our current plans are to fund roughly 1/3 of our retirement monies with rental income, and 2/3 with savings. If we're lucky, it'll work out to 1/3 rentals, 1/3 SSI, 1/3 savings. We have two residential rentals - one of which I haven't increased the rental amount because our son has been renting from us for the past three years roughly - along with a friend of his. My son has since met a special someone, and she just lost her rental as of about two weeks ago, effective 8/31 - and has to be completely out by 9/10 - so they are rapidly trying to find a place together - which means he'll no longer be on the lease for one of our rentals - so I'll be starting to increase that rental amount every year for the next several years by around 5% per year (minimum), to catch up with the rest of the rental market that has increased 30-40% over the past three years alone.

 

[HitchHiker71]

As I said before, most people's financial situation is due to the choices they make in life. We have always chosen to spend less. Most choose to spend the most they can.

We have friends who make less money than us but spend like they make twice what we make. Meanwhile, they worry about affording retirement.

Keeping up with the Jones's is still very much alive and well here in the US at least. It's tempting to do so for sure, since many around us are always making large home improvements every few years - most all of which is debt financed, but we've largely been able to resist doing so during the course of our adult life. Only now that we have paid off our home mortgage are we making some major improvements later in life without using a ton of debt financing.

 

[WaikikiFirst]

most people's financial situation is due to the choices they make in life

Your common sense and lack of complete outrage is disconcerting. Come on man, this is 2024. Or did my house go thru a time-warp last night?

 

[WaikikiFirst]

I haven't increased the rental amount because our son has been renting from us for the past three years

Raise that rent. Teachhim how the world works.

 

[SmithOp]

I have a golf buddy that used to be a FA with Merrill Lynch, he is always saying the biggest cause of lost retirement wealth is getting divorced. Plan your long term relationships well, and don't mess around, it's not worth it.

 

[PigsDad]

Agreed - our current plans are to fund roughly 1/3 of our retirement monies with rental income, and 2/3 with savings. If we're lucky, it'll work out to 1/3 rentals, 1/3 SSI, 1/3 savings. We have two residential rentals - one of which I haven't increased the rental amount because our son has been renting from us for the past three years roughly - along with a friend of his. My son has since met a special someone, and she just lost her rental as of about two weeks ago, effective 8/31 - and has to be completely out by 9/10 - so they are rapidly trying to find a place together - which means he'll no longer be on the lease for one of our rentals - so I'll be starting to increase that rental amount every year for the next several years by around 5% per year (minimum), to catch up with the rest of the rental market that has increased 30-40% over the past three years alone.

I'm a big believer in multiple streams of income for retirement as well. For us, it is farm land rental / oil royalties, retirement savings and SS (when we start taking that - we are less than 60 now).

I have always liked the idea of residential rentals, but knew I would not care for the time requirement needed (maintenance, inspections, move out/move in refreshes/remodels, finding good renters, etc.). That would probably be ok in my working years (younger, doing less travel), but I knew I would not want to keep that up in my retirement years -- I want to be footloose and care free! I am very happy with what we are doing now, as there is very little management of the farm land rentals (we've had maybe two renter changes in 20 years), and the oil royalties is completely hands-off.

A question for you (and others): do you manage the rentals yourself, do you hire a rental manager, or combination? Did it change when you retired? What is your long-term plan?

Kurt