Wednesday, June 20, 2012

Cat food retirement plans

One of my local papers, Raleigh's News & Observer carried two stories on tapped out seniors.

With all our apocalypse-in-progress and post-apocalyptic novel reviews, we tend to focus on the end of everything.  But our economy is suffering through an enormous amount of one-at-a-time collapses.
The stories overlap a little, but we will start with the income side first.
Motoko Rich, New York Times, 9 June 2012
Even as most Americans are delaying retirement to bolster their savings accounts, the recession and its protracted aftermath have forced many older people who are out of work to draw Social Security much earlier than they had planned.
According to an analysis by Steve Goss, chief actuary for the Social Security Administration, about 200,000 more people filed initial claims in 2009 and 2010 than the agency had predicted before the recession and he said the trend most likely continued in 2011 and 2012, though that is harder to quantify. The most likely reason is joblessness…
Drawing Social Security early has repercussions that will be hard to overcome… Those who collect early get 20 to 30 percent less a month than they would get if they waited until full retirement age, which varies by year of birth.
According to an analysis by Richard W. Johnson, director of the retirement policy program at the Urban Institute, 37 percent of older workers who lost their jobs between 2008 and 2011 and did not return to work ended up claiming Social Security as soon as they turned 62.
So right off the bat, many older workers are headed into employment with a much more restricted income stream than they might expect.  Of course stories about the difficulties of the 55+  crowd finding work go back to the 1990s.

But we also have a bottom line problem in our country.  We haven't been living within our means at almost any level since... Well I don't know, sometime before the Vietnam War.  So that curtailed income is colliding with a lot of debt.

Hanah Cho, Baltimore Sun, 9 June 2012 (via Charlotte Observe)By Hanah Cho
From 1992 to 2007, the percentage of households of people in their mid-50s and older with housing and consumer debt rose from 53.8 percent to 63 percent, according to the Washington-based Employee Benefit Research Institute’s [EBRI] research using government data. The problem is even more acute for those 55 to 64, with 81.7 percent carrying debt.
In the same period, the average overall debt for these 55-and-older households more than doubled, to $70,370, according to EBRI.
Some older consumers also are saddled with credit card debt. Among Americans 65 and older, for instance, the average amount of credit card debt rose to $10,235 in 2008 from $8,138 three years earlier, the largest percentage increase among all age groups, according to a survey by Demos, a New York-based public policy institute.
Moreover, other older Americans are haunted by student loans years after they, or their children, left school. Adults 50 and older owe 17 percent of the nation’s $870 billion [now over $1 trillion] in student-loan debt, according to a report in March by the Federal Reserve Bank of New York.
Of course you know the Baby Boomers just love being called "Seniors."

It is obvious that some people could have done a better job planning.  No doubt about it.  But before we get too busy casting stones, it should be remembered that the wages of the blue collar works have -in inflation adjusted terms - stagnated since the mid-1970s.

So intermixed with all the discussions of how to plan for the end of the world scenarios, there needs to be a greater emphasis on just staying on the road until we get to the end: either our own personal end, or the great final dead end.  Living in mobile home with six other seniors as roommates, eating cat food, while you ponder over all the cool equipment you used to own, is not a great endgame strategy.  I did the roommate thing as an adult when money was tight, it boggles my mind to think of doing it at 65+.


Degringolade said...


I am considering a roommate plan as soon as I get my boys out the door. Not six folks in a trailer, but the truth of the matter is that an apartment with a roommate is a lot more affordable than going solo.

Retirement is in and of itself an odd concept. I would love it if it would occur, but the semi crash of 2008 wiped out a huge amount of my retirement plan and the pile of useless stock options that I have accrued is truly impressive.

I think that I will work until I am 67. Then retire somewhere cheap.

Stephen said...

I will never retire, period. I shall ask for my SSI at the last possible minute but will continue to work afterwards. Forget the cat food.

russell1200 said...

As a general note, I look at the formating of this article and just have to shake my head. I never seem to get blogger to really work right. It doesn't help that Google and Microsoft are battling each other for dominance of the "cloud."

D: Roomates/boarders is certainly cheaper. But it is not easy to find reliable ones.

S: I know you are self employed so the income part of the post is (hopefully) less pertinant to your situation. But I don't know if anyone can really say they are completely safe. One lesson I think you could take is that as you get older, you need to be very cautious with you changes in employment. A job safe in hand is worth a lot more. Except for a few high demand postions, it can be very hard to find re-employment. The days of getting mad at the boss and storming out the door waving your finger should be considered retired. Although he has not weighed in, Pioneer Prep's dogged determination to hang on where he is at I think is very wise.

Anonymous said...

My grand plan is to buy junk land, park a trailer on it, drill a well and go solar.

Lose the car, pay no electric, and a tiny tax bill. Initial investment will be a B. And gotta get new batteries and another trailer, 10 years from now. Should still have a bit of coin left to get past that.

20 years from now, I'll be old enough to collect SS. That might be a problem...

In any case, we shall be safe until Lord Jim FINALLY gets a full paycheck. :)


russell1200 said...


Just be careful where you park it. A lot of jurisdictions are suspicious of habitation without proper sewage/spetic.

Lord Jim get a full paycheck? He doesn't seem to be in any hurry to go in that direction.

Anonymous said...

Yeah, he's finally done on payments to the ex... but the state of Florida is past due in ending the garnishment. So he's still not getting a full paycheck. Once he gets a full paycheck, the world will end.


russell1200 said...


Oh, I thought you meant him finding a more lucrative, realworld job.

Getting only half the story, it would be interesting to hear what the Vampire-lady (or whatever he calls her) would have to say about it all. If he got such a bad deal maybe there were incriminating pictures involved? LOL

Anonymous said...

I actually went to Elko back in May for the tax sale. Meet Jim and his wife. Had dinner and talked to Jim for a few hours.

Jim's rather mellow. His voice matches his appearance. Unlike Patton. (Pet peeve of mine). And he has a nice spot of land... for junk land. But it's still a nice spot.

In 4 days I observed the caste system there. Mainly $$ based (miners, etc).

I get a sense of a vague disconnect in Elko. You have to initiate the interaction and once you stop talking, the exchange stops. It might be a western thing, as I have never been west of the Mississippi.

Born and raised in Baltimore. People talk to lampshades there.

I managed to have a conversation with a Basque as I was walking the town. I saw him working in his garden. I knew enough about plants to get a conversation going and the Basque gentleman interacted with me like I'm used to. The Basque culture could be a valuable resource.

Jim might complain just a little bit about his current wife but I think he married well. As I was visiting the Lord Jim Compound, a 4' snake skittered across the ground. His wife remarked "I shoulda shot him yesterday". Though she may of been talking about Jim! LOL

Florida is rough for child support. My brother is in Jim's boat, but with 2 daughters who have legally taken his ex's sheriff deputy boyfriend. Bro still gotta pay.

Make me want to get a vasectomy!

russell1200 said...

GK: I know a lot of very verbose Westerners. I suspect is was more a combination of the small town and the economic demographics.

I lived in Baltimore for about 4 years. A lot of its African-American population comes from the Carolinas. I lived on the Northeast side somewhere off of Belair Road, and than on the Northwest side offf of Reistertown Road. Baltimore I found to be a friendly town, but I wanted to get back to the Carolinas.

Anonymous said...

Grew up on the northeast side on Harford Rd. Right by the Parkville shopping center.

Thanks for the heads up on chatty Westerners. I was wondering "WTH?"


russell1200 said...

GK: Westerners may be more variable than the East Coast. Think of the difference between someone from Boston, and a small town in South Carolina.

The only attaction I recall from the NE-side of town was Racer's Cafe (in Parkville)- which at the time was a little shotgun bar they used to keep the liquor store selling past 10:00pm - and then became popular because they would sell the microbrews on tap for $1.75, and coors light for .75. Fanciest drinking blue collar bar I ever saw. This was in the mid-90s.