That’s a good idea, except I believe a senior can deteriorate fairly quickly from decent to terrible. The year after an annual exam can be the year I rear end a teenager.
I think annual checks are better than nothing, but I just don’t want to take any chances.
The “lesson” I take from the Yahoo article @iglooo posted is that luck and fortune play as much a part as personal decisions. It’s not my business how many children people have, but one might save more money with fewer children, for example. But had I been born in a chronically-depressed region with fewer opportunities, that might have limited the quality of my education, job opportunities and career choices. And, traditionally, many elderly were cared for by their children. That’s still the case in first-generation immigrant families now. It’s very hard to judge standing on the outside and it made me feel very fortunate by comparison.
About the driving part, there have been horrific incidents of wrong-way highway driving by seniors because of poor night vision. They turned on the wrong ramp and didn’t see the wrong-way sign. Night vision is one of the first things to go. It’s hard driving with contact lenses now with the glare.
I think the danger also exists in new drivers. I’ll preface this by saying that I know how lucky we are to be able to make this choice. We got cars (Volvos) for our kids that have many automated safety features, not only for their sakes but for those they share the road with. The car can recognize pedestrians and cyclists and will brake to avoid hitting them. The car can recognize that you are drifting out of your lane, it will warn you if you’re following too closely, it will brake to avoid rear ending the car in front of you, it reads speed limit signs and marks the speed limit on the speedometer, it warns you if there’s a car in your blind spot (although properly adjusted mirrors really shouldn’t have a blind spot), it warns you when you’re backing out of a parking spot and a car is approaching from the side, etc.
It is some comfort to me that, not only will my children be somewhat less likely to be injured in a car, but they are also less likely to injure someone else. And I am glad that I have a wife who never hesitated to LBYM with me so that we could splurge on ultra safe cars for the kids.
Financial gurus: what cost basis have you selected for your mutual funds? FIFO, LIFO or average cost? Can you even select anymore?
Thanks.
LBYM?
We just had a case where an elderly woman hit the gas instead of the brake, and drove through a store-front. Luckily, no one was hurt.
We had a rash of accidents a year or two ago, where people were run over and killed by elderly drivers. It actually started talk of instituting driving tests, but nothing came of it unfortunately. Your vision deteriorates, your reaction time deteriorates, your ability to process data deteriorates.
I hope dstark is right and self-driving cars are less than 10 years out.
I do think that if the lady outlives her husband in the retirement article example, she may need to move in with one of her children, or live in subsidized housing (which she and her husband probably are already). Some people give 10% of their gross (Mormons, many Evangelical etc ‘first fruits’ from the bible). Their budget is lean - only $60/week to feed two. They obviously are people of faith that feel it is important to support church and charity. And they have benefited from state/federal/community services. They are willing to do this; oh, they also have a dog. Again having a pet can be a little bit of a luxury, but I do not begrudge them at all - I think they are honest and hard working. Just has some misfortune and timing errors.
The people on this thread are thinking and planning how to have enough to retire. Money Magazine Jan/Feb 2015 had a three page article “Retire, Live Happily Ever After - Keep a Smile on your face once your working years are over”. The article said “people tend to start life happy, only to see their sense of well-being decline in adulthood. Once you reach age 65, though,happiness picks up again, not peaking until age 85.” This was from Gallup-Healthways Well-Being Index. It talked about having a social hobby is a big boost to happiness. The happiest people don’t do things in isolation. Creating a predictable paycheck helps reduce anxiety. Having money helps, but has diminishing return after $550,000 (more money from there doesn’t increase the happiness index). Renting late in life allows you to have more social interaction and less home responsibility.
I think by the time people hit age 85, they realize they are in the ‘gravy years’ - outlived the life expectancy, don’t worry about too much.
@notrichenough, sorry, LBYM = Live Beneath Your Means (or, sometimes the B is Below). In any case, it’s one of the foundations of a financially sensible life.
@AttorneyMother, I use what Vanguard calls Specific Lot ID, which means that I can select which of my purchased lots I want to sell. It’s a bit of a PITA, but it lets me tax loss harvest sometimes, balance gains against losses, etc.
Vanguard, and most other companies, was late to that party, but I let Quicken handle it for me
ETA: avoid LIFO, which will have too many short-term capital gains.
I always see LBYM on the bogleheads forum, and find it funny that the B could just as easily stand for “Beyond.”
@LBowie, I agree – I think it’s telling that even the mention of that would count as heresy over there.
Funny, I thought maybe LBYM was a new gender selection on Facebook.
I think all of us can look back at others decisions (and definitely our own), and say, “What were you thinking? What a mistake.” However, there are some choices that are distinctly poor, and ones that could have been reversed at any time, and still can be…that people don’t do anything about. The decision to have both people retire early (unless there is something seriously wrong with them), when they have almost nothing saved, no medical insurance except very pricey insurance available, is unfathomable to me. You just don’t have that luxury. When people lose jobs and don’t have money or insurance, they look for other ones. I see elderly people working in customer service all the time. Many could be doing it just for the mental stimulation, many probably need the money. But they are highly competent people, and for the most part, they seem very happy keeping busy working.
While it can be difficult to get a job, it doesn’t even sound like they looked (unless they are leaving that part out). Not so tough to get low paid jobs in the service sector, though. But given the choice of living in poverty, no medical insurance, and retiring early, or working for benefits and low pay—it seems like an obvious choice to keep working. It’s not like you can actually go out and travel if you have no money, so you may as well do something productive. Certainly, at least one person in the family still needs to continue to provide.
Not intending to get political, but …
One of the big drivers behind this couple’s situation is that there were different resources available to their severely autistic child in one state vs another. I personally find it shameful that a family would have to be uprooted because of something like this. Additionally, the COBRA and Medicare payments are/were a drain on them.
I don’t know if the family always made the best choices. I, personally, would not be making charitable contributions in their position. Otoh, very clever to include a link to the graphical design website – I looked, and possibly so did someone with work to send her way.
It is difficult to move, however people do it for tax, job situation, family, and living situations all of the time. The resources you get can be different from state to state, city to city, school to school. I have a friend who had a kid with Down’s syndrome that had to go through enormous gyrations and effort to get what she thought was adequate schooling for her daughter. In the end, due to my friend threatening lawsuits, they mainstreamed the child, and had an additional aide in the classroom while possible. Probably the best situation available for her daughter, however, all throughout her classes, even high school, the other kids had a physically aggressive classmate who had the mental capacity of a toddler, though she was a very sweet girl. Extremely tough for the teachers, expensive for the financially drained school district. I don’t know what the best answer is, but it certainly seems to be centered around money, and families who are more affluent have better options. Another person I know puts his severely autistic son in a private school. He says it costs a fortune, and they spend hours driving their kids to different schools daily. However, though it is tough for them to pay for and coordinate, he knows this is the best possible situation for his little guy.
I wish the writer of this article would have said that this couple is looking hard for certain types of work. I think people would reach out to them in a minute.
I know a gal that has MS and is permanently disabled, and because there is a MS ‘community’ in another state, and her out of pocket for health care insurance was less, she moved. It was better for her financially as well as having a medical and social community that could help with her disease process. Her dad (highly educated and kind man) was here, and he did a lot of financial and emotional support - I don’t think her H could handle her medical decline and they were divorced many years ago (in another state). During her years here, she was able to see her daughter go through her school years and launched.
It seems straightforward to many of us on this thread that there are some specific decisions, like getting a lower paying job if that is what it takes to keep income coming in and having health insurance prior to age 65. Everyone needs an emergency fund, and when you are older and perhaps have higher health care issues - these people in the article kept throwing themselves at the ‘best case’ scenario occurring, and it didn’t happen for them.
And in the article, the parents felt they had to move to another state along with the now adult handicapped offspring - however they flung themselves into that w/o regard to ‘what if’ scenarios. Used all their money to buy a place that they ended up then losing.
I do think their charitable/church contribution is a dignity kind of thing.
When one of them dies, the surviving spouse will have to find a way to live on really low SS benefits as was pointed out on this thread.
A friend’s adult DD is a full time aide at a public school, and she has to oversee the needs of one child who needs diapering assistance and sounds like is a handful behaviorally. The other aid takes care of the rest of the class (maybe 6 total) with a special ed teacher. Some of these kids have a lot of care needs in their future after they age out of the school system. BIL’s GF was a special ed aid for over 20 years and has now switched to delivering mail FT with USPS. She wishes she had switched many years ago. One of her two charges actually broke her foot in her last year, and then threatened to hit it again when they knew it was injured (so then she had to deal with worker’s comp). Lots of family stresses with these kind of challenges. Some of these handicapped individuals have big anger issues with low impulse control and lash out where they can or who is available.
I, too, read that article about the retirement couple with great interest.
yes, at the end, it is all about personal choice where to spend your limited resources.
The good thing I learnt is that they don’t seem to need to pay tax and the out of pocket medical spending is only $240. May be the rent cover something, their utility bill is very low.
I am surprised to see they have a pet and their car insurance is very high. For $65 a month gas probably get them 600 miles a month? Paying almost $1000 a year is too much - unless they have an expensive car.
I have not done any research, but I would like to think, on average, the professionals with higher education will have less number of kids.
The $240/month grocery means less fresh vegetables and fruits.
AM, thanks for the calculator (#5171). I change the assumption of pre-retirement return from 7% to 6%. I also like this calculator - it allows more comprehensive inputs.
http://financialmentor.com/calculator/best-retirement-calculator
For me, the two numbers in your calculator required a little more thinking - Annual retirement savings and Income required at retirement. For us now, the saving % is actually higher than % replacement. We are fortunate to have that option as well as we are making hard decisions.
Including the 401K matching (double digit) and employee stock discount (double digit) program earnings, I think we are saving at least 65% of our pre-tax incomes.
@DAD II do you mean you are planning on living on 65% of your pre-tax earnings in retirement?
After looking at this case scenario, I do know some big items like term life insurance and LTC insurance we have that will inflate our retirement budget. Should have the house paid off. I think we will then focus on doing what we need to spruce up our home for sale. But we have to also have a plan on where we want to live - heck we can be renters during that time. At some point, we are probably going to want to be in a condo w/o maintenance. You just have to downsize on the ‘stuff’. Maybe should travel a little while physically able. Have to see where the kids land, and see about our health care needs. We are so use to this community and our medical providers. Have to be able to trust the medical system (I am a RN).
Life is all about choices.
@SOSC. Counting on SS, pensions and dividends, we will not be at 65% of our current pre-tax earning.
However, we’re living on about 35% right now and I feel it is fairly comfortable.