<i>He receives $1,200 from Social Security and a $600 a month pension from his last corporate job.</i><p><i>When the 2008 financial crisis hit, what little Palome had saved -- $90,000 -- took a beating</i><p><i>He then sold his New Jersey home for $180,000, kept what he needed to quickly pay off his credit card debt and divided the rest among his children so they’d have down payments for their own homes.</i><p>Ok, so he retired with $270,000 of assets plus $1,800 per month from private and public pensions. Buy a life annuity (as a 65 year old male) with the $270,000 and you're getting around $1,600 per month. That yields a total income of $3,400 a month or $40,800 a year, which is considerably above the national median income (around $28,000/year according to wikipedia).<p>As I see it, the problems here are entirely of his own making:<p>1. He gave away 2/3 of the wealth he should have been relying on during his retirement,<p>2. He gambled his remaining assets in the stock market rather than making investments suitable for his demographic (mostly bonds) or buying an annuity, and<p>3. He picked up expensive habits when he was younger -- he takes regular flights to visit relatives and occasional vacations.<p>(And I suppose I could add 4. He should have saved far more money before retiring -- but my point is that even at the point he retired he was in decent financial shape.)
One interesting comedy about retirement planning is a professional retirement money manager quoted in the article suggests saving 20 times your annual income before retiring.<p>If you're poor, you're not going to have the spare money to save.<p>If you're rich, the IRA contribution limits begin to hit. Hmm lets say 75K/yr * 20 years / $5K per year contribution limit that'll take 300 years to save the 20 years worth.<p>If you're in a career that's short term, its going to be difficult to save 20 years of annual income if no one over the age of 35 is hired into that kind of work or the average worker burns out in less than 10 years.<p>And the only purpose of the whole racket is so the medical industrial complex can simply confiscate it all anyway before you get to enjoy it.<p>Finally the article implies the guy likes going to work and only does it for extra beer money. And whats wrong with that, other than people who actually need the job to live can't get his?
He had a "low 6 figure" salary, ie. >= $100,000 per year, and over all that time he managed to save $90,000. So let's say he worked for 25 years and had no interest at all from his pension, that means he saved about $300 per month. Which (considering he was paying off his mortgage and putting his kids through college) is I guess a pretty respectable amount to save.
As a late 20something -- it's hard to predict the future; but truly, I could imagine my wife and I expatriating when we retire to somewhere where it's just cheaper to live.<p>I've been very fortunate to have spent more than my fair share of time traveling out of the US and there are so many amazing low key places with decent access to necessities. I really have started seeing this as a viable option down the road.<p>I keep reading about Uruguay, and how it's quickly becoming a target destination for a lot of retirees, assuming I were to be of retirement age today, I'm having trouble thinking of a reason NOT to do this.
I gotta say I respect this guy a lot.<p>For a lot of people their ego wouldn't be able to handle the step down in status.<p>This guy took care of his family and now he's taking care of himself.
As far as I can tell, this dude made some choices, and is happily dealing with the consequences. He chose a consultancy over a pension, and has chose to give to his children over keeping for himself. And, (a) he notes that he doesn't have to work but choose to, and (b) any of his kids would be happy to support him.<p>From what I can tell, this is a media outlet looking for a juicy story about seniors festering in poverty where such a story doesn't really exist.
<i>At 64, when an 800 square foot manufactured home he’d seen in Plant City, a Tampa suburb, became available for $21,500, he purchased it with a credit card to amass frequent flier miles. He then sold his New Jersey home for $180,000, kept what he needed to quickly pay off his credit card debt and divided the rest among his children so they’d have down payments for their own homes.</i><p>Selling the house was smart, but dividing the rest and giving it to his children was a terrible move. Homes in the US are used a proxy savings accounts - sold at retirement or later to gain retirement funds, or used as a (hopefully) no-rent living space.
I am from Africa. My mom gets a pension for $30/month for the few years my father worked for the government before passing away. With $30 she can go buy one bag of rice, and maybe enough sugar for one month. MAYBE.<p>But no one cares. In Africa the retirement is your kids. You take care of your kids, and when they grow up, they take care of you. While this system is sure to keep many under poverty, I prefer it to one where someone who is 77 has to get to work just to ensure he can have the basics.<p>I respect the way elders think in America. That is they are independent, they help the youngsters as much as they can, and they are just significantly more active than older people where I am from. However I do think it is right for them to have to work past a certain age, especially when they have well-able relatives.
For what is worth I have observed this phenomenon first hand. I am a college student and I work part time as a sales clerk at a store. I would say at least 20% of the staff consists of retirees. They are usually professionals who either worked for the government or a larger corporation. Everyone who I've gotten to know has some savings and doesn't strictly need to work, but doesn't have enough savings to live comfortably.<p>What is more interesting is that another 15% to 20% of my colleagues at this store are in their late forties to mid fifties. For various reasons they each decided to abandon their careers (found out they didn't believe in what they were doing, or decided to take time off to look after their kids and could never get back into the industry, etc...)<p>It is a bit of a specialized store so I am sure it is not the same distribution as in a Target or a Walmart. However it is also worth mentioning that aside from one or two people (who I am not sure about), everyone else has at least a bachelors degree or is in the process of getting one. There are maybe 15 college students out of a staff of about 60.
His math is wrong, and the journalist just put it in the title without doing any simple arithmetic.<p>He makes about $80 a day now, which is $400/week. In flush years, he used to make about $120K. At approximately 2000 work hours per year (in USA), that works out to about $60/hour.<p>So he makes in a week slightly less than his former <i>daily</i> wage. [updated this -- it said more previously. I can't do math either!]<p>It's amazing that even a financial publication like Bloomberg has innumerate journalists.
I don't expect to ever be able to retire unless I get truly wealthy.<p>This is a fairly ugly thing. I'm not sure what I would do if I lost my health or my skills fell too far out of date for me to catch up.<p>And I'm one of the lucky ones. I have actual earning power. Most of my cohorts do not.<p>I can't imagine this ending well.
I'm actually shocked that he can't earn better as an educator of some sort. Seems like a great way to spend your like is 1/3 of it learning, 1/3 of it applying what you've learned and learning more from experience and 1/3 of your life sharing what you've learned with those living the first 2/3's of their lives. If you were successful during the first 2/3's of your live, then teaching or sharing your success with others should be possible.<p>That's the route that my dad took, but it wasn't planned and he wasn't even aware to seek it out. He was a two-time CEO, and one of the companies he founded and took it to a moderate exit. However after he left the last company, he moved back home to Brazil, where he encountered ageism over and over again. Companies and recruiters basically told him "Look, you're the perfect candidate. Every company looking to compete internationally would love to have someone like you. However they want someone who has your experience but is 40 to at most 50 years old. My dad is 66. After struggling for a while and burning through a lot of his savings being told no over and over again because of his age, a friend of his put him in touch with Instituto Dom Cabral, probably Brazil's best business school, where he easily got a job as a professor doing managerial consulting advice to companies that pay for access to its professors.
Investments != savings... No one should have any money in stocks if they're within 10-20 years of retirement, and aren't investment professionals themselves.<p>The fact is, people (investors and those who sell investment 'products') got too used to successive bull markets, and took on too much risk. When the smart people sold, the dumb people (or those who have too much faith in their dumb brokers) lost big.<p>Take on risk when you're young, so if your position takes a hit, you have enough time to ride it out. When you've got a good amount, switch into low-risk investments, and when you're within a decade of retirement, put everything you're counting on into a bank account or GIC. Only play with what you're willing to lose...
This guy seems remarkably youthful for 77. A lot of people his age wouldn't be able to handle his jobs, or would not be able to convince an employer to give them a chance. Even a burger flipper has to be able to stand for hours at a time and have a decent short term memory.
this is why i advise young american's to start developing ties and knowledge of developing economies.<p>make your money in the US. Retire to Bangladesh/Philippines.