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Thread: 70 years old and no savings at all

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    Elite Member celeb_2006's Avatar
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    Default 70 years old and no savings at all

    homeowner-no-savings-some-options: Personal Finance News from Yahoo! Finance


    Susanna Wilson, 70, makes little girls' dresses to supplement a meager Social Security check.

    If you’re worried that you haven’t saved enough for retirement, you’re probably right. Most of us haven’t. In fact, the Employee Benefit Research Institute found the majority of American workers had put away less than $25,000 for their golden years.

    But even those people are in better financial shape than Susanna Wilson, 70, who saved nothing.

    Her only dependable income is a Social Security check of about $900 a month.

    “I can never retire,” she said, her voice trembling as she stared at the floor of her living room in Grass Valley, Calif. “Probably about every two weeks when the bills are due, that’s when I get really worried. I think ‘How am I going to pay this one?’ ”

    It should never have come to this. Ms. Wilson attended the University of California, Berkeley, in the late 1950s, though she left before graduating to move to New York and marry her college sweetheart, the Minimalist sculptor and sometime rock musician Walter De Maria.

    Ms. Wilson spent her prime earning years engaged in various creative endeavors in New York, mostly as a designer. Her clothing line, O’Susanna, found a home in the late 1970s at Saks Fifth Avenue and Bloomingdale’s. Glamour and Seventeen magazines featured Perfumes by Susanna, including a popular fragrance called Strawberry Love.

    In her 40s, Ms. Wilson moved to California and became a publicist. At her peak, she made around $65,000 a year, she said, and not a penny of that made its way into a retirement fund. “One thing kind of led to another,” Ms. Wilson said. “I’ve always put all my money into my businesses. And I always thought the business I was in was going to be a great success.” She also raised a daughter, Corie, 36, who lives in Los Angeles with her two children and is not in a position to help her mother financially.

    Now twice divorced and living alone with her Shetland Sheepdog, Rooney, Ms. Wilson subsists on those government checks, plus a one-day-a-week job at a local jewelry store that pays $12.50 an hour. She received no alimony from either divorce. Ms. Wilson also makes little girls’ dresses under her O’Susanna label, at a vintage Singer Featherweight sewing machine in her dining room. But she sells only about six a month for around $200.

    Grass Valley, an old gold mining town of 12,300 residents in the foothills of the Sierra Nevada, near Lake Tahoe, isn’t an expensive place to live. But Ms. Wilson isn’t the only one struggling. Her friend Molly Fisk, 55, a poet and teacher, was visiting the house and joked that her retirement planning was “all tied up in MasterCard futures. Sad but true.”

    Ms. Wilson would probably manage on her current income, though not without sacrifice, were it not for the debt she had accumulated. All told, she averages about $1,400 in monthly income, including Social Security (adjusted for one of her former husbands’ earnings). A third of that goes toward fixed expenses like utilities. She pays $300 toward a mortgage balance of $5,477. She inherited the house, fully paid off, from her parents, but took out the mortgage a few years ago to pay for repairs.

    The balance of her income goes toward the monthly minimum payments on $9,000 in credit card debt, racked up for daily living expenses. “I think I might just have to declare bankruptcy,” she said. “I just can’t live with that.”

    Before she takes that drastic step, Ms. Wilson should consider some other options, said Elizabeth Rutter Baer, a certified financial planner in Lansing, Mich. She worries that Ms. Wilson is “extremely close” to the edge and isn’t getting anywhere with her debt payments because she keeps putting more expenses, like food, on her credit cards.

    Yes, she could try to find other income, Ms. Baer said. But that’s a short-term solution. At some point, despite her excellent health, Ms. Wilson may not be able to work. “Bankruptcy is possible, but my advice is, let’s liquidate assets and get those debts paid off,” Ms. Baer said.

    To that end, Ms. Baer recommended something she said she had never before suggested: a reverse mortgage. Such mortgages allow homeowners to tap existing home equity to receive a lump sum or monthly checks. Unlike a home equity loan, however, borrowers don’t have to make any repayments until they no longer live in the home. The strategy can be risky, with high fees and sometimes poor counseling for borrowers. Reverse mortgages are available only to homeowners 62 or older.

    “Susanna is the ideal candidate,” Ms. Baer said. “This is one instance where it could work.”

    The house is valued from $150,000 to $200,000. Ms. Baer said Ms. Wilson should work with a bank to see if she could wrap the current mortgage into a reverse and then take cash out. Ms. Wilson is already making phone calls to explore the idea.

    Ms. Baer also noted that Ms. Wilson was part owner, with her two brothers, of several tracts of timberland in northern California. The land’s value has dropped because of the economy, but Ms. Baer said that shouldn’t stop them from selling it.

    “Whatever the purpose of this land was before, today’s the rainy day,” she said. “It may not be that much, but at this point $25,000 would change her life, totally.” Ms. Wilson said she was discussing this with her brothers and a real estate agent.

    Ms. Baer, who is 67 and single, said there were particular financial difficulties facing single people as they aged. Even people in a relationship should make financial plans that can work even if they were to be single during retirement, she said, adding, “Nobody knows who’s going to be there at the end.”

    Ms. Wilson agreed with that assessment. “I have friends, and they’re two people together, and it’s a lot easier.” At that point she again spoke through tears. “My Mom would say, ‘Why don’t you just go and get married?’ and that’s just not me,” she said. “I believe you have to love somebody.”

    Ms. Baer’s advice provided a push for her to explore some options she had already thought about, but hadn’t followed through on, Ms. Wilson said, because she had been paralyzed by the fear of what might happen if she could no longer generate extra income. Overcoming that fear will be key to recovering her financial health. And she’s confident that will happen.

    “I don’t want to be a Pollyanna,” Ms. Wilson said. “But tomorrow is another day.”

  2. #2
    Elite Member MrsDark's Avatar
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    One day a fucking week at a jewelry store job? Uhm. She can't do at least 3 days a week??

    I hope she never gets sick. But at least she's got that house she can unload...and it looks like a lot of nice knickknacks too...when/if she's no longer able to care for herself (unless she croaks of something before getting to that point). I see lots of people older than her who haven't got a pot to piss in or a window to throw it out of.
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    Elite Member witchcurlgirl's Avatar
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    It happens a lot. And to lots of people that don't own a home outright from inheritance. The old story about seniors eating cat food exists for a reason.
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    I doubt she is the only one out there. Seems like there should be a registry or something that could find her a room mate type situation. Sort of a senior roomie thing.
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    Gold Member Straight's Avatar
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    i'm sorry she has no savings but she makes 900.00 a month in ss. she has a p/t , though low paying job and she makes an additional 1200.00 from dresses (about). many are much worse off.

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    What did she expect would happen?

    This is horrible but frankly, poor financial planning is her own fault.

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    Elite Member faithanne's Avatar
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    I don't know about the US but in Oz we have compulsory superannuation which is paid by our employer and factored into our salary. It's not much but it's forced savings that can't be touched until retirement.

    And "tomorrow is another day" was Scarlett, not Pollyanna.

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    We can also 'top up' our supers with any additional savings, windfalls, etc. The fact that you can't touch it until retirement is probably a good thing as some people need saving from themselves and that 'must have' jetski. And when you do have access to the super it comes back to you tax free which is a real bonus.

    This woman is a victim of her own poor financial planning as much as anything else. But at least she does have some options - many don't.
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    Employee Benefit Research Institute found the majority of American workers had put away less than $25,000 for their golden years.
    whoah, that is extremely sad, I'm just flabberghasted. Its like Americans have this bad attitude now of just not planning for the future at all! everything is now now now now, buy now pay later! wtf?! whatever happened to saving for something and then getting it, the funny thing there is that once you've you saved for something, its so much harder to part w/ your hard earned money and splurge on what you wanted, which is great in the long run!

    I remember some asshole I used to be friends w/ who's a little younger than me and $100,000.00 in debt over 2 cars (bought new - another dumb mistake), a time share (I tried to talk him out of) and partial mortgage he shares w/ his lecherous wife and in-laws asking me how I afforded to go on a stupid little 4 day trip I went on last year or the year before (it was only about $900.00 total) and I was like, "um I saved for it. have you heard of saving for stuff?!"

    I know I know preachy sounding post and I dont have kids yet or a mortgage so I can't talk from that persepctive, but I would also not dream of obtaining either in this current economic downturn and my own economic condition, so these stories are just annoying to me. I'm thankful I was raised to be frugal and put money away by not only my parents, but by my great depression grandparents too and I'm grateful even for being laid off in '09 b/c it was a slap in the face that made me a frugal tyrant w/ my finances that I know will pay off for me.

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    Elite Member msdeb's Avatar
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    i'm one of those that hasn't been able to put away any money for retirement. If we have a 'rainy day' we're fucked. Not through poor financial planning, but bad circumstances.
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    Gold Member Baby Face's Avatar
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    I am not a saver but, I do make sure that between my 401(K) (payroll decuct) and company matching, etc I put about 20% in retirement. I have a sister that is 59 and has absolutely no retirement savings - she will be OK though - she has worked to get her expenses and living standard way down so that she will be able to live on SSI - assuming it is around when she turns 62.
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    Quote Originally Posted by Baby Face View Post
    I am not a saver but, I do make sure that between my 401(K) (payroll decuct) and company matching, etc I put about 20% in retirement. I have a sister that is 59 and has absolutely no retirement savings - she will be OK though - she has worked to get her expenses and living standard way down so that she will be able to live on SSI - assuming it is around when she turns 62.
    I'm horrible at saving as well. At 34 the only thing I have at this point is my union pension which the majority of the contribution is from my employer.

    On the bright side in another 18 months I'm entitled to half my husbands pension as well.

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    Gold Member Snoopy's Avatar
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    I've put a decent amount into my pension which my employer matched. I have a mortgage and still save every month for retirement.

    I also save for everything I buy. It took some time to furnish my home but I'm ok with that. In fact, I'm still waiting to find the perfect bookshelf which I will pay for with savings.

    Plan B: Marry money. haha!

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    Elite Member MontanaMama's Avatar
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    I have a hard time feeling a ton of sympathy for the woman in the article. She lived her life exactly as she wanted to, traveling where she wanted to without any thought of her own future. Sounds like she had many opportunities to secure a healthy retirement income stream but chose not to.
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    Hit By Ban Bus! AliceInWonderland's Avatar
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    Quote Originally Posted by msdeb View Post
    i'm one of those that hasn't been able to put away any money for retirement. If we have a 'rainy day' we're fucked. Not through poor financial planning, but bad circumstances.
    wow yeah, those "circumstances" thing scare me! for myself but also for my parents b/c you just never know what might come up so I can understand being wiped from some unforeseen event. always scary

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