Retirement?

MisterCreosote · Jan 4, 2017

doctorquant said: ↑

To give you a sense of the kind of history my sister has (and this isn't the only instance of this kind) ...

The winter of the year my son was born, when I was still doing my doctoral work and we all lived in the northwestern corner of South Carolina, my sister had gotten a job at a produce prep business, where they prep and "kit up" produce for local restaurants. For someone of her abilities and drive, it was a perfectly respectable gig. She lived with my parents, so a lot of her fundamentals were covered, but still, she was doing her part. Then one day she met this guy (we'll call him Jay) at work. Not a week went by before she and Jay were living together in a cheap hotel (she'd just kind of disappeared on my parents). My mother just had to get involved at that point, so she checked them into one of those budget suites hotel (with a kitchenette) so they wouldn't have to eat out all the time. They'd pay cash for the hotel on an ongoing basis, but this gave them a chance to maybe get out in front of things for a change. Then another couple of weeks went by, and suddenly the two of them up and quit the produce prep gig. My mother only found out when she called them at the hotel and learned they'd been checked out for a couple of days.

A week or so passed -- with my mother frantic -- and out of the blue, my sister was on the phone, calling from Moorhead, Minn. Per her, she and Jay had headed up that way "looking for work" (never mind that they left jobs to do that) and needed money to get home. My mother stewed about it and then wired, I don't know, let's say $500. "We're on the way," they said. Another few days passed, with no sis and no Jay. The phone rang again, and this time they were somewhere in Arkansas because: A) they'd run into some bad weather; and B) sis wanted to see the Mississippi. At least that was their story. Again, my mother wired money, and again they were on the way. Of course by now you know that they were not shortly on the scene. From Arkansas they made their way to Orlando, and from there, they headed back to South Carolina, abandoning her car (bought by my parents, of course) at one of those giant truck stops along I-85. From there, they hitchhiked God knows where, winding up in some tiny little oil town along the Louisiana coast, where he worked out on a rig for a week or so to replenish their stores (she moved in with some family that rented rooms to transients).

From the Louisiana stint, they hitchhiked north and west, ultimately finding themselves in a homeless shelter in Boise, Idaho. Apparently the living there was pretty good (it was a converted hotel, as I understand it), so they stayed put for a few weeks. One morning, however, they got in an argument, and he walked out. My sister IMMEDIATELY got on the phone to my mother, who promptly arranged a one-way ticket (you can imagine how expensive it was) for her to fly back home. My father refused to go to the airport (he'd washed his hands of my sister), but when my mother begged me to go with her, I went. We had a new baby (my son) at home, but back then my thought process still was "When your mother asks, you say yes."

Now to this point, believe it or not, I've left out a couple of fairly juicy details. First, before they made that first dash to Minnesota, my sister and Jay, during the day, broke into my parents' house and stole, among other things, my mother's engagement and wedding rings (by this time my mother didn't wear her rings much). Second, as a farewell to the produce prep gig, Jay had broken into the building and stolen several hundred dollars in petty cash. And finally, when they were in Orlando, they somehow managed to use my mother's credit card number (off the receipt for that suites hotel she'd checked them into) to wire themselves a couple thousand dollars.

When my sister came bouncing off that plane, a week before she'd turn 33, I was completely unaware of these juicy details. Even still, imagine my shock when her first words to me and my mother were: "Hey, what are y'all going to get me for my birthday?"
Click to expand...

Sheesh. Is your sister Jenny from Forrest Gump?

doctorquant · Jan 4, 2017

MisterCreosote said: ↑

Sheesh. Is your sister Jenny from Forrest Gump?
Click to expand...

Was Jenny a thieving sociopath?

cranberry · Jan 4, 2017

Automatic 401 (k) sign-up seems to be having a positive effect:

Americans Are Putting Billions More Than Usual in Their 401(k)s

doctorquant · Jan 4, 2017

cranberry said: ↑

Automatic 401 (k) sign-up seems to be having a positive effect:

Americans Are Putting Billions More Than Usual in Their 401(k)s
Click to expand...

At ElderDaughterQuant's gig, there's both a defined benefit plan and a defined contribution plan. You're automatically enrolled in both unless you opt out of the latter. Further, you can opt to put more in the latter, but the organization's contribution doesn't increase proportionately. I think the default is 3%/3%, but if you contribute 6% they'll up their part to 4%.

The Big Ragu · Jan 4, 2017

doctorquant said: ↑

To give you a sense of the kind of history my sister has (and this isn't the only instance of this kind) ...

The winter of the year my son was born, when I was still doing my doctoral work and we all lived in the northwestern corner of South Carolina, my sister had gotten a job at a produce prep business, where they prep and "kit up" produce for local restaurants. For someone of her abilities and drive, it was a perfectly respectable gig. She lived with my parents, so a lot of her fundamentals were covered, but still, she was doing her part. Then one day she met this guy (we'll call him Jay) at work. Not a week went by before she and Jay were living together in a cheap hotel (she'd just kind of disappeared on my parents). My mother just had to get involved at that point, so she checked them into one of those budget suites hotel (with a kitchenette) so they wouldn't have to eat out all the time. They'd pay cash for the hotel on an ongoing basis, but this gave them a chance to maybe get out in front of things for a change. Then another couple of weeks went by, and suddenly the two of them up and quit the produce prep gig. My mother only found out when she called them at the hotel and learned they'd been checked out for a couple of days.

A week or so passed -- with my mother frantic -- and out of the blue, my sister was on the phone, calling from Moorhead, Minn. Per her, she and Jay had headed up that way "looking for work" (never mind that they left jobs to do that) and needed money to get home. My mother stewed about it and then wired, I don't know, let's say $500. "We're on the way," they said. Another few days passed, with no sis and no Jay. The phone rang again, and this time they were somewhere in Arkansas because: A) they'd run into some bad weather; and B) sis wanted to see the Mississippi. At least that was their story. Again, my mother wired money, and again they were on the way. Of course by now you know that they were not shortly on the scene. From Arkansas they made their way to Orlando, and from there, they headed back to South Carolina, abandoning her car (bought by my parents, of course) at one of those giant truck stops along I-85. From there, they hitchhiked God knows where, winding up in some tiny little oil town along the Louisiana coast, where he worked out on a rig for a week or so to replenish their stores (she moved in with some family that rented rooms to transients).

From the Louisiana stint, they hitchhiked north and west, ultimately finding themselves in a homeless shelter in Boise, Idaho. Apparently the living there was pretty good (it was a converted hotel, as I understand it), so they stayed put for a few weeks. One morning, however, they got in an argument, and he walked out. My sister IMMEDIATELY got on the phone to my mother, who promptly arranged a one-way ticket (you can imagine how expensive it was) for her to fly back home. My father refused to go to the airport (he'd washed his hands of my sister), but when my mother begged me to go with her, I went. We had a new baby (my son) at home, but back then my thought process still was "When your mother asks, you say yes."

Now to this point, believe it or not, I've left out a couple of fairly juicy details. First, before they made that first dash to Minnesota, my sister and Jay, during the day, broke into my parents' house and stole, among other things, my mother's engagement and wedding rings (by this time my mother didn't wear her rings much). Second, as a farewell to the produce prep gig, Jay had broken into the building and stolen several hundred dollars in petty cash. And finally, when they were in Orlando, they somehow managed to use my mother's credit card number (off the receipt for that suites hotel she'd checked them into) to wire themselves a couple thousand dollars.

When my sister came bouncing off that plane, a week before she'd turn 33, I was completely unaware of these juicy details. Even still, imagine my shock when her first words to me and my mother were: "Hey, what are y'all going to get me for my birthday?"
Click to expand...

That was painful to read. Without your commentary, if you just spelled out the details and presented it as a stranger. ... my first guess / thought would be "drug addiction." It makes people lie, cheat, steal, do whatever they have to do -- even if it means lying and cheating the people who love them most. Do you know if that is at play?

I feel bad for your mom. As a parent, you want to take care of your child. Even when they are an adult. The fact that your mom walks into it every time speaks well of her heart. But the unfortunate reality is that with what you described, as you know your mom is enabling her -- and your sister will take advantage of it over and over again. I am not saying that critically of your mom. For a parent, it is tough. It's hard for your mom to be objective enough to know that "tough love" is what your sister needs.

The Big Ragu · Jan 4, 2017

cranberry said: ↑

Automatic 401 (k) sign-up seems to be having a positive effect:

Americans Are Putting Billions More Than Usual in Their 401(k)s
Click to expand...

It's not mentioned in that article, but employees who are in their 401(K) due to auto enrollment typically contribute less than people who make the voluntary decision to sign up for a 401(K) plan -- and employers typically set fairly low default contribution levels.

This is the problem with things designed to nanny people, rather than leaving them to their own devices. If an employer sets a default contribution rate of 1 percent (and some do), sure, they might end up with 85 percent of their employees participating. But this has been borne out by looking at the effects of those default contribution businesses: Most of those people stick with the 1 percent contribution. And the average savings rates in those plans is lower than it is for people who are in plans that required employees to make the decision to contribute themselves. I'd argue that those low savings rates are as big a problem than the positive effect you attributed to those default contribution plans.

It's not that surprising on one level. When people are responsible for their own well being, and they have to pick their savings rate themselves -- they usually pick something higher. When you lull people into a sense of someone else taking care of their decisions for them, they simply settle for whatever decision was made for them.

doctorquant · Jan 4, 2017

The Big Ragu said: ↑

The fact that your mom walks into it every time speaks well of her heart. But the unfortunate reality is that with what you described, as you know your mom is enabling her -- and your sister will take advantage of it over and over again.
Click to expand...

For a time I would agree with you about my mother's heart vis-a-vis my sister. But that time has long passed. My mother keeps her close about and funds the show because it's simply easier, on my mother, to do that than worry about her. She's said as much many, many times.

Dick Whitman · Jan 4, 2017

Do are people in America basically retiring with nothing at all to live on? No savings at all?

Buck · Jan 4, 2017

I know people in that circumstance and nearing that circumstance.
Nothing but SS.

Dick Whitman · Jan 4, 2017

Buck said: ↑

I know people in that circumstance and nearing that circumstance.
Nothing but SS.
Click to expand...

Hope it's not me some day. The student loans are the gorilla in the room.

Football_Bat · Jan 4, 2017

The way I understand it, in order to collect 100% of your SS benefit all you have to work is something like 32 "units," of which a unit is something like 3 months. (It's all on the letter of benefits that the SSA sends out every year, but I don't want to dig it out.) Once you work those full units, you're fully vested, which I'm sure I achieved well before I turned 30. That is certainly one area that can be addressed to help SS last without any pain whatsoever to those working.

BTExpress · Jan 4, 2017

It's 40 units, and you don't even need to earn much or work much (15 hours a week at near minimum wage for 10 years will do it.)

HOWEVER, even though you are "fully vested" the monthly benefit will be miniscule with earnings that low (barely $100). My wife has about 14 units through part-time work, but it doesn't really matter. Even if she reaches 40 the benefit will be of no consequence.

Fully vested just means you get a benefit. How much depends on your FICA contribution. That's why with that letter they say "assuming you continue to make (current) salary until retirement age."

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