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Saturday, January 22, 2011

From where I stand.

By now, you must know that I am a retired senior citizen.I live in a beautiful little town, with this beautiful vista. Lucky me!

From where I stand I have lots of time, but not a lot of resources.

Our biggest issue as senior citizens is affordability.  Affordability of health care, daily expenses, necessary services. Most of us are on fixed income. What that means is that most of our income is not growing in value; our purchase power is much less today than it was the day we retired.

When gas prices go up or a new medicine is prescribed, we have to find money to pay for these things from our present budget.  If we get fatally ill, we could lose all of our assets to pay for that medical care, including our homes, our pensions, our savings.

So, don't be surprised to know that we will cost tax payers more for Medicare, for Social Security, for Medicaid. These programs took a long time in coming, helping many people live through a longer lifespan with a modicum of security.

Middle class seniors who worked all their lives, who saved and scrimped, are still in jeopardy.  If Medicare and Social Security were reduced, seniors would be suddenly homeless and on the streets.

Regardless of where we live, most seniors have a tough time balancing their budgets. More and more seniors  become wards of their own children, bunking in a spare room. So, if we go under, our children go under too, taking us in, suffering the extra burden of babysitting grandpa who is unable to afford to stay in his own house.

Golden years?

Most folks run out of savings in the first five years of retirement. Even with social security and Medicare, seniors are quickly lowering the quality of their lifestyle the minute they quit their work.  They may not need new clothes or new cars, but they will need more and more medical services and drugs.

Can you save enough to live well in your golden years? Financial advisers tell you to start savings in your twenties,  investing your money for the years when you won't be able to work. 

Now, if you expect to retire early, you need to stop reading this, turn off all extra appliances, and start making a plan today to live frugally from this day on. Don't say you didn't know.

60 comments:

Ocean Girl said...

Costs of living goes up faster than the income. We are just not able to catch up with the current inflation rate.

In Malaysia, the partnership between parents and children starts early or as soon as the children started work.

Children will continue to stay with the parents until they are married or until they can afford their own place. Parents will help with the downpayment or in some instances have to buy their children a car because their children will need the car to start work. Grandchildren are sent to the grandparents for daily babysitting.

Overall I see the current trend is children need their parents help more than parents needing help from their children.

Linda Myers said...

We still have our family home with a downstairs living area, requiring only the addition of a kitchen to be a separate residence.

I expect someone in our family will live there at some point. Our eight kids are grown, but some of them struggle.

Or else someone will live downstairs as partial payment for home care for my husband or me, when that time comes.

Helen said...

I have a vision .... a vision of one day sharing a home with my two sisters. It may be the smartest way to live comfortably and care for each other.

Hines-Sight said...

Thanks for stopping by my site. Great post. My mom is 75, and she struggles with this daily. I understand.

janis said...

it is so scary...
we worked our butts off, Hubby worked 70+ hours a week & rarely took a day off. Our nest egg burst and we are starting over, at 48 & 52, w/ two daughters in college.
My Mom will never retire, she cant. W/ Dads medical +their daily needs they have a negative every month.
it is so scary...
:(

Miss Sadie said...

Your "golden years" are the years when you give your gold to the doctors.

We are fortunate in Canada to have built and effective social safety net: small pensions for seniors (I guess like American social security), the Canada Pension (into which all workers pay, and draw on when they retire), and our national Health care program. Without these, we would have a terrible time. And then, some businesses have private pensions

And while we have been saving, we know our savings won't last forever. We took a major "hit" in the recession like so many others. But we keep living simply, and looking for ways to live more simply.

Woman in a Window said...

I am skin of my teeth today. Tomorrow I hope to have my teeth. But your questions are real and vital.

xo
erin

Trish and Rob MacGregor said...

It's rumored that Obama will actually talk about reductions in social security during his state of the union speech. If that comes to pass, he definitely won't get my vote again in 2012. Why not cut defense spending? Who appointed us the world cop?

MerCyn said...

My Mom (age 86) worries about running out of money. She remembers the Depression, saves and reuses everything. My parents lived in the same house for over 50years, a small ranch, and did not spend a lot on expensive clothes, cars, etc. But she and my Dad were able to do what they wanted to in retirement (travel!). I think too many of the younger generation bought into the big houses, cars, etc. The past couple of years has been a rude awakening. Hopefully the young people will learn from the mistakes of their elders.

The Boat House said...

Rosaria, You are so right about senior income. We live comfortably at the Boat house, but sure have tightened our belts since retiring early with the onslaught of Ron's MS. Health costs really hit us a few years ago (before Medicare) when Ron had two surgeries (including cancer) and I had two emergency surgeries. Our savings was wiped out (even with health insurance). I wouldn't give up our lives here on the Washington coast for anything, but your comments to younger folks is dead on.

Keep up the great blogs. Nancy

Jo said...

Rosaria, you need to move to Canada, my friend. No one ever goes bankrupt in Canada due to medical costs. And our health care is amongst the best in the world.

But that beautiful vista ... *sigh*

Donna said...

Just talking about this today with a friend...she wants to retire this year age 62. She knows she will barely make it but thinks she can cut all frills and is willing to do it because she is sick of working and has many aches and pains. I plan to work as long as I can because I see the handwriting on the wall. My in-laws, who were well-to-do, are now almost broke from years of nursing home expenses...she had a stroke and then Alzheimer's and he wanted to be there with her. She never worked a day in her life but Medicare and Social Security (which are broke themselves) have always been given to her and they feel very lucky for that. How long can that last?
I also work with an ophthalmologist who does many senior citizens. He says when they come into his office, they often ask "I can't afford the eye drops, what should I give up, my heart medicine, food or these eye drops?" He gives them samples. Tough choices.

#1Nana said...

Darn you Rosaria, this is not a message I want to hear. I was quite enjoying being in denial! I don't want to go back to work, but the smart thing would be to at least find a part time position to save a little more toward when I can no longer work...and convince my husband to continue working until he is eligible for social security. Hard decisions!

Eva Gallant said...

Amen! We are both retired and living on a fixed income. In the past 2 weeks we've had to shell out $1700 for a new furnace, and $900 for a new water heater. There goes any extra money we might have had to take a trip this year---and it's only January!

Ventes said...

As of a younger generation, that of which attending college, I must admit it is a very hard world growing into. Many friends of mine struggle to meet ends meet, even with degrees. And some of us, including myself, entering the medical field also have to deal with the daily trouble of a simple solution to increase our health benefits as well as seeking a safe path for a retirement.
Although some people seek assistance by an attempt to facilitate universal healthcare in the US. As being part of the medical field I assure you that such a thing would hurt the healthcare system. Yes, the average person would have a lot less to worry about, but the quality of the care would decrease significantly.

We, as a nation, need to put ourselves back onto a path where our nation is economically prosperous. Until such a day, the daily hassles with healthcare and a retirement program will plague us.

Lois May said...

I am a new immigrant to Australia. Have been here two years and I am shocked at the cost of living.

We have had to divide everything we have by 7 because of the South African Rand, Dollar exchange. Retirement scares me and my oldest is only starting school now.

Met a family yesterday who is sharing a home with other friends. Both of us are stay at home moms and feel the pressure to go back to work. I hate that I may have to choose between paying rent and my kids.

Love your blog. Am a new follower. Needed to read someone with some wisdom.

Well done on the "Blogs of note".
Hope you go from strength to strength.

Forrest said...

So true. My wife and I saved for years, invested wisely and were fortunate to exit the market in a timely manner. We had done it all the right way and our future was secure. Then, at age 63, she became ill. We were forced to sell, at tremendous losses, most of the assets that were to see us through our retirement years to move closer to her sister, who will help me with her care. Now, as many of you have pointed out, there is talk of cutting the very programs that keep ends together for the majority of us. There is no money, we are told. Of course, we can find the funds needed to make the bankers whole and to police the world. All we need to do is starve the old folks.

Jim Wright said...
This comment has been removed by the author.
Marguerite said...

Great post! I guess the bottom line is that no one can really afford to retire, except the wealthy. That is why I started my online business, two years ago, and still continue to work, full time at my day job. So that when it comes time for me to retire from that job, I can still work online, with no age restrictions.

menchu said...

Wish I had that view...*sigh.

Me, I'm a believer in voluntary euthanasia for when things get REALLY tough, if one is alone and has no family, like me! I do not see the sense in just existing to pay the bills when one is slowly starving to death due to lack of money/family support. But, of course, voluntary euthanasia costs money, too! So, really, a no-win situation when the money and assets are gone. Best to just live while you can, if you can! :< )

commoncents said...

THANK YOU for posting this! I'm glad I found your blog!!

Steve
Common Cents
http://www.commoncts.blogspot.com

Jenny Schouten Short said...

There is not a day I don't worry, worry, worry. I understand where you're coming from.

Dedene said...

After reading this post, I can understand your pain and frustration. I'm scared to death to think of those retirement years even though I live in a country where seniors are relatively well protected.
I guess the next stop is the Salvation Army.

iNdi@na said...

nice view
porridge for breakfast
lots of walks
all will be well

Angelina said...

We always invite seniors to dinner at least once a week. This helps not only with a meal they don't have to worry about but the pleasure of their company.

I think keeping company is as important as money!

potsoc said...

Ventes, young man, our doctors, in Canada, said the same thing when we instituted our universal health care system. They even went on strike to fight it. Two years ago when our minority (fortunately) conservative government talked of tampering with it our doctors threatened to strike to keep it.
I would rather wait a bit for a non essential treatment than having to go to the poor house to get it.

I'm with Miss Sadie on this one.

the walking man said...

I heard that cal when they forced me into retirement at age 45. Now we live on 25% of the income we had a decade ago. The only good thing is my wife can squeeze a dime out of a penny and my vices are nil, or we'd soon be under water.

A Seasonal Cook in Turkey said...

It is all a bit depressing. My husband is about to retire (we live in Turkey) and so far, we are looking forward to it! But from what you say, it may very well be a complete disaster.I will keep you posted as to how it goes!

Thanks, Rosaria.

Munir said...

It may be scary, but if we watch where you are going with our expenses, it may not be too bad. If we run out of resources and have to fall back on public funds, oh well, but as long as I can do without having too I will respect my self.

That Janie Girl said...

Y'all just come stay with us. But I warn you to remember - my life really is "mi vida loca"....

ellen abbott said...

five years, huh? Well, our chosen profession/lifestyle did not afford us any extra income to put away. And what little we did is now nearly non-existant due to several stock market crashes. we don't expect to retire until we are physically unable to create our work or until we get so old no one wants to do business with us. then? well, we'll see. when you have lived basically hand to mouth your whole life, the future doesn't look any different from the past.

The Girl from Cherry Blossom Street said...

Everything is just so astronomical...
I've thought of moving to a place where I can enjoy siesta, salsa, sardines...

But I believe one always has to give up or sacrifice one thing or two to be able to afford another...

And I do need health care!

Jim Wright said...

Move to Texas Cherry Blossom. We got the salsa, you can nap any time you want and you can substitue crawfish or oysters for sardines.
As for health care, you will have to do like the rest of us, "Cowgirl Up"

Vagabonde said...

I understand what you are talking about – I am retired too. I also feel that this country is doing a lot less than other western countries as far as health in concerned or for the people who are not rich. It should not be this way but each culture respects what they value – here they value youth and money mostly – old people should just fade away. But now with all the Baby Boomers retiring it may be different, they may demand more respect and keep what they paid for all their lives. Thanks for coming to my blog. I wonder if your daughter’s friend heard about Ian McHarg at his school? I would think he has.

Z said...

I read that post and the comments feeling really, really grateful to live in England with our National Health Service and welfare. No one here needs to have that sort of worry, we have no idea what it must be like.

Kathryn Magendie said...

It is hard when retirement $ stays the same and everything else goes up. We're so lucky we found our little log house at the right time and that our prior house sold at the right time, both converging to make our life here in the Smoky Mountains a wonderful one. GMR is retired, and I write.

Since I am self-employed as an author/editor, my taxes are quite high - lawd!

Now I see gas prices inching up again, and when I have to fly to see my granddaughter and son and DIL, the fees are ridiculous... *sigh* lawd be. They know when they got you by the heart strings.

ds said...

Interesting post, rosaria. Funny how things have changed: not so long ago, multigenerational living was the expected and accepted mode. What happened?
Much food for thought here, as always.

yaya said...

Growing up my Grandparents lived with their children...the children often taking turns on helping them out. I always say I will never retire, but working in the health care field I don't know if I can keep up the pace forever! Plus, God may decide for you when you retire...any health crisis can force you into it early. My Dad died when he was 56...his company had no widow pension benefits so the money he had invested there was gone. My Mom was only 49 and had 2 of her 6 kids to put through high school and college. What did she do? Worked 3 jobs, lived as she always had, frugally. Thankfully they had their modest home paid off, no credit card debt, and no car debt. Unlike the generations now that want everything they can't afford, the huge homes, cars and vacations all on the credit system. I work in the health care industry and I think the aged (me) will be shoved aside, care put off in hopes we just die. Sounds morbid, but I see the trend happening already. Great thought provoking post!

Welshcakes Limoncello said...

Beasutiful photo. A timely post, Rosaria, with all that is going on over there. As A Brit, I am appalled that anyone has to pay for health care and cannot understand those who are so against the health reforms of the current administration. You are right: They are not "golden years" if people are aslways worrying about affording their basic needs.

Jim Wright said...

In the US when you turn 65, you qualify for Medicare. If not having "free" health care is a problem for you, don't retire until you turn 65.

As for as retirement income, you can't wait until you are 59 to start planning for it.

Teddy Cuartas said...

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Dimple said...

We are just entering the retirement age; I have retired, and our budget suffered for a while, but we have adjusted. My husband will retire in about 4 years; who knows what will happen! Interesting, thoughtful post; thank you.

Boredom Blog said...

I'm very jealous of your lovely little piece of the world, makes me look forward to retirement myself!

quilterliz said...

Hi Rosaria. Great photo. We live below a mountain range called the Cherry Tree Range and it too is lovely to look out on. The cost of living is a point of contention all the time I think now. In the course of daily conversation you will nearly always come across someone who has something to say about it for one reason or another. Private health insurance here in Australia is expensive, a lot of people just can't afford it and a couple of friends that I know have had to drop out of it after being in it for a lot of years. I work and can't see that I will be retiring at any stage in the forseeable future, because I just can't afford not to be working, it's as simple as that.Take care..Liz...

RNSANE said...

Oh, my gosh, Rosaria, this is so poignant and true. I started working at the age of 16 and worked hard until my job ended at 64. The father of my oldest son gave me $200/month for child support but I did not get child support for my two younger children. Their father took off when I had extensive back surgery and was disbled a year and a half. Life has been a struggle - my gift to myself were travels. Now, things are getting out of hand and I can easily see a whole battalion of seniors living on the streets! It is so scary.

MAYBELLINE said...

Have always lived frugally and don't expect one ding dong thing besides what I have put aside for myself. If you're only 65, can you find some way to make extra income?

fiftyodd said...

Whew! The same the world over. I disagree about the UK though - my dad, aged 94, still carries on, but if you have been frugal and saved for your old age, you get nothing for free. He has to pay for a carer to help him dress/undress. My brother and his wife help him with his permanent catheter and to get undressed at night. He lives on their property in his own house next door. After a certain age, the National Health is not much interested in helping old people. My mother died at 90, with kidney cancer - she was only given pain killers. My husband retires in 3 years here in South AFrica. When we finished paying off our house, five years ago, we decided to buy a plot and build the shell of another house while we were still used to paying out a mortgage. He has been working on the inside over week-ends. So we haven't spent the money on travel etc. Thus we hope to have a house to rent out when we retire. There's no way that anyone can survive long-term on a pension.

A Cuban In London said...

What a timely post. right now in the UK, there's a big debate going about retirement age, the role of elderly citizens in society and ageism (especially following the high profile case of a BBC presenter sacked on account of her age. She subsequently won her court case. I find myself worrying a bit more nowadays about old age and what my long-term strategy might be. Financial resources have to be included in the equation, as you rightly state, but also I wouldn't like to leave aside the emotional factor. Satisfaction is as much a goal for me in my third age as economic solvency.

Great post. Many thanks. And your view is superb! Lucky you!

Greetings from London.

alannahxjaide said...

After reading this, I feel lucky to be in a country with free health care and free prescriptons for the over sixty-five.
To be honest, I don't completely understand why Obama's health reform bill was shot down by many people who may need it in the future.

Gaston Studio said...

Great post Rosaria, whether one wants to acknowledge the truth or not. I wish I had been smarter when I was young and had been saving then. As it happened, I didn't and when I lost my job at age 60 and couldn't find another one, I had to sell my condo and move into my single daughter's basement. This was after I had spent most of my pitiable savings as my pride wouldn't let me even discuss anything else at the time. Listen to Rosaria folks, she knows of what she speaks!

Suldog said...

I've been remiss in not stopping by to offer my congratulations upon your being named a Blog Of Note. I copped the same award, a couple of days after you, so now you know how utterly capricious the selection process is. Nevertheless, even if I deserve nothing but scorn, you deserve something else. So there you go, and wherever you go, there you are.

rosaria said...

Hi folks, thanks for stopping by and sharing your perspectives.
You pointed out that in some places there is universal health coverage. We tried to get a similar thing back last year when Congress debated the Health Care Bill.

We are still working on making the US a more perfect union. And the work is hard, a give and take, and a hopeless pushme-pulleyou process.

Some of you asked if the younger seniors couldn't continue working and become more financially solvent. Yes and no. Yes, if they own their own businesses, can set their own hours, and beg out when they need to take so many sick days.

Those of us who retired at the anointed time thought we had everything worked out. We were as prepared as we could be. I'm talking about those who were promised and assumed certain things, like medical coverage, etc. Even Medicare has changed its coverage, btw. Medicare part B and D have been added to cover holes in health care, at a cost to both the individual and the tax payer. Medicare will become insolvent if we don't curtail costs.

Some of you think that seniors ought to work longer and save more. Not a bad idea at all, if their work can still be productive. I was a school principal the last decade of my working life, working fifteen hours or so every day, usually collapsing the minute I walked in my door.

People called me at all hours; stress was always present. I didn't look forward to retirement at all; I looked forward to getting things accomplished.

When my health began to suffer, I began to reconsider.

So, this is not just about seniors; it is about preparing ourselves for all aspects of life.

I love seeing so many different perspectives, learning about ways to solve problems.

Thanks for the visit.

LindyLouMac said...

A simpler and less stressful life in Italy has helped us cut our expenses.

Castro said...

My parents are both experiencing the worries of retiring. They want to retire in 5 yrs but have very little saved. Being from another country they weren't told to NOT cash our their 401k and they did years ago. I'm their daughter (31yrs old) and I'm worried for them. I can see that at the end they will may have to move in with my fiance and I or live in a small apt. It breaks my heart about this that I can see myself already getting paranoid about not spending and saving for our future as well.

Great blog and love your site!!

Moannie said...

Thankfully I will never starve or go without health care, not because we have any saving left, but because we are in the UK. We have been, seen, and done everything, have clothes on our backs and enough pension to keep the wolf from the door.

Maybe we should all revert to bartering, seeing as saving money is no longer rewarded.

Clarence Heller said...

But what joy when you look out to see this view!

JuniperVillageFamily said...

Just wondering if you know about the Veteran's Administration's Aid and Attendance Pension for qualifying wartime Veterans. Currently, for qualifying Veteran's and spouses of Veterans, it can assist in paying for Senor Living Communties...Just a thought as you are financially planning for your future, if you are a qualifying Veteran of war in the United States. Best of luck to you.

Joani said...

Luv reading all these comments. I, too, will turn 65 on 2/20/12. I started taking SS on 6/2009. I am still working part-time. I also have a room mate who I have know for a long time & he pays half of the living expenses. He will be 71 in August. I, too, have no other family as my only sibling died in a car wreck in the '70s. I tried to get my classmates....we R all still friends....to buy a house so that we could live together but that hasn't worked out cuz some R doing the grandchildren thing. I chose not to have any children. As the prices of the houses in the Arizona area have plummeted, I'm waiting 2 C what this year does & if I can find a home for under $50,000, I will buy it and the roof over my head will be paid for. Currently, I'm still making mortgage payments although I was able to get them lowered recently. I plan on quitting my part-time job on 12/16/11 as I'm tired of insurance companies....I work for a physician doing his insurance billing & collecting....and now Medicare is changing the coding & etc. Speaking of Medicare & SS. They R not broke. The government has borrowed from them when it was plentiful & have never repaid them as they have not repaid any of their debt....unlike many of us. Those of U in the USA, using Medicare Advantage plans is a disadvantage because Medicare is paying those insurance companies UR premium & the insurance companies keeps the premium whether U use it or not. If U pay Medicare and don't use it, U at least know that someone else will be able to use it and it isn't going into the bottom line of the insurance company.
Welcome to my world!

Barbara said...

My husband and I tried to retire early, but then discovered we weren't quite ready to live that frugally. Now he works on contract, and between contracts, we travel. It's the best of both worlds for now. I look forward to the day when he can stay home full time again, but it will be a few more years. It's harder than we expected it to be. Your words are wise.

Dennis said...

We have consulted with thousands of Veterans and their surviving spouses on how to qualify for the Aid and Attendance pension. To qualify for the pension your expense for care (assisted living costs, home personal care etc) needs to be higher than your income. Assets- The older you are the less assets you are allowed to have in your name based on a life expectancy chart. Confused? Call for a free conucltation and we will explain this. http://www.seniorcareassociates.com