What happens if you run out of money in retirement?

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matti
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What happens if you run out of money in retirement?

Post by matti »

Hello.

This is a rather simple question (maybe even a silly one?), but I've always wondered about it. Let's say you're 85yo and you simply drained your retirement accounts dry and SS isn't enough to live on. What would you do? Move in with a son/daughter (if possible), get a job, something else?

I'm 41yo and a ways out from retirement, but I always wonder what I'd do if I ran out of money when I'm 85yo (or a similar age) and still somewhat healthy.

Thanks.
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Re: What happens if you run out of money in retirement?

Post by livesoft »

I'd move in with my one of my girlfriends.
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Re: What happens if you run out of money in retirement?

Post by surfstar »

at 85? I wouldn't care - that sounds like a long-lived life.

How about: how much money would you pay to assure you even make it to 85? (happy and healthy)
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Re: What happens if you run out of money in retirement?

Post by Brianmcg321 »

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matti
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Re: What happens if you run out of money in retirement?

Post by matti »

livesoft wrote: Tue Aug 04, 2020 11:25 am I'd move in with my one of my girlfriends.
LOL!
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Re: What happens if you run out of money in retirement?

Post by Sandtrap »

1. Move in with family, relatives, friends.
2. Social services programs.
3. Sell home, assets.
4. Work, if possible.

Humans are resourceful.
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Last edited by Sandtrap on Tue Aug 04, 2020 11:29 am, edited 1 time in total.
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Glockenspiel
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Re: What happens if you run out of money in retirement?

Post by Glockenspiel »

I’m 20 years from retirement, but I think Medicaid would allow you to live in a nursing home or assisted living center, and cover healthcare, and social security should be enough to cover expenses outside of that. Sell off assets, live in an apartment that’s income-based, etc.
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Re: What happens if you run out of money in retirement?

Post by JAZZISCOOL »

Assuming you own a home, get a reverse mortgage or sell the house and downsize to a cheaper place.
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Re: What happens if you run out of money in retirement?

Post by stan1 »

A few possibilities are move in with family, subsidized low income senior housing, or a medicaid nursing home (if medical condition warrants). I'd expect most 85 year olds would not be able to work and that you had already sold off all assets including a home.
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Re: What happens if you run out of money in retirement?

Post by sailaway »

I would hope that I notice that I am in danger of running out long before I actually run out.
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Re: What happens if you run out of money in retirement?

Post by dbr »

Not yet mentioned is ask/let your family help support you in your own apartment or even house.

You can also consider annuitizing enough of your assets that you can't run out of income, keeping in mind that in some cases no amount of income will be enough if your needs become extreme. You may also not have enough assets to do that comfortably and still have a reserve. That is where falling back on public assistance comes in.
Last edited by dbr on Tue Aug 04, 2020 11:36 am, edited 1 time in total.
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Re: What happens if you run out of money in retirement?

Post by Grt2bOutdoors »

Social services if they exist.
Work in retail if that exists and they will hire you.
Family- if you have family and if they ageee to take you in.
The alternative to the above? : Don’t run out of money!
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Re: What happens if you run out of money in retirement?

Post by corn18 »

My mom is 82 and lives on a $1200 SS check each month (no savings, house belongs to neighbors). How much more out of money are we talking? She gets subsidized utilities, food and property tax. She still works grooming dogs, boarding dogs and doing animal husbandry for a dog breeder. Makes $200-$400 a month. She's happy.
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Re: What happens if you run out of money in retirement?

Post by LunaLauren »

This happened to my grandparents in their 80s, so I have seen it up close.

At first, they slashed expenses as best they could and tried to live off Social Security and pension only.

When their healthcare needs exceeded their ability to pay, they went into assisted living. Their home was sold and the proceeds went to the facility. Social programs paid for the balance to the facility.
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Re: What happens if you run out of money in retirement?

Post by JupiterJones »

sailaway wrote: Tue Aug 04, 2020 11:32 am I would hope that I notice that I am in danger of running out long before I actually run out.
This ^^^

It probably wouldn't happen all of a sudden. Ideally, you're always keeping an eye on your retirement funds and reassessing the likelihood that they'll last you long enough.

If at , let's say, 75, you see that your present course is threatening to "drain your accounts dry" by 85, you would take steps at that point (reduce spending, look into annuities, pick up a bit of extra work, etc.) You wouldn't want to wait until it actually happens and your options are more limited.
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Re: What happens if you run out of money in retirement?

Post by Gill »

sailaway wrote: Tue Aug 04, 2020 11:32 am I would hope that I notice that I am in danger of running out long before I actually run out.
This is the real answer. I would take some serious steps before completely running out of funds.
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Re: What happens if you run out of money in retirement?

Post by flyingaway »

livesoft wrote: Tue Aug 04, 2020 11:25 am I'd move in with my one of my girlfriends.
Did you mean one of the rich girlfriends on this board?
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Re: What happens if you run out of money in retirement?

Post by oldfort »

The idea of being healthy enough for a full time job at 85 is a fantasy. Most people end up doing some combination of the following options: 1) live off Social Security/pension(if available) as best they can, 2) reverse mortgage to live off home equity(if a homeowner). 3) get financial support from family, 4) go live with family, or 5) live off some combination of government assistance programs, ex. Medicaid for a nursing home or assisted living.
Last edited by oldfort on Tue Aug 04, 2020 11:50 am, edited 2 times in total.
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Re: What happens if you run out of money in retirement?

Post by smitcat »

oldfort wrote: Tue Aug 04, 2020 11:48 am The idea of being healthy enough for a full time job at 85 is a fantasy. Most people end up doing one of several options 1) live off Social Security/pension(if available) as best they can, 2) reverse mortgage to live off home equity. 3) get financial support from family, 4) go live with family, or 5) live off some combination of government assistance programs, ex. Medicaid for a nursing home or assisted living.
Yes - exactly +1.
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Re: What happens if you run out of money in retirement?

Post by Mr.BB »

This is why you spend time doing your long term savings/ spending calculations- and always leave some extra money for unexpected bills.
Live below your means, but don't forget to live your life!
Keep an eye on your expenses as you get older, you should see a trend line for running out of money well before you do and can make corrections when you are in the earlier stages of retirement.
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Re: What happens if you run out of money in retirement?

Post by dbr »

oldfort wrote: Tue Aug 04, 2020 11:48 am The idea of being healthy enough for a full time job at 85 is a fantasy. Most people end up doing one of several options 1) live off Social Security/pension(if available) as best they can, 2) reverse mortgage to live off home equity. 3) get financial support from family, 4) go live with family, or 5) live off some combination of government assistance programs, ex. Medicaid for a nursing home or assisted living.
One thing that is interesting is that I do know people who live with family but essentially no one who has gone back to the college style of living with a roommate or two in old age.
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Re: What happens if you run out of money in retirement?

Post by RadAudit »

I've been telling my kids for several years that their biggest concern is not how they are going to spend the money I leave them but which part of their backyard are they going to let me pitch my tent in when I show up on their doorstep old and broke. So, I guess the answer is move in with relatives as the last resort.
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Re: What happens if you run out of money in retirement?

Post by HueyLD »

livesoft wrote: Tue Aug 04, 2020 11:25 am I'd move in with my one of my girlfriends.
Well, the girlfriends may not want the burden of an old broke man. :wink:
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Re: What happens if you run out of money in retirement?

Post by dodecahedron »

I deal with many seniors living very comfortably and with great dignity in nice senior apartment complexes run by respected local nonprofits. They are charged modest rents on a sliding scale basis. There is a staff during business hours weekdays that connects them to whatever resources they need to supplement their modest incomes (typically just SS, possibly a small pension too, and in some cases a bit of CD interest.) So if they need foodstamps or help with prescription drug costs or whatever, they get linked to the appropriate contact people.

Everyone is ambulatory and independent. (This is definitely not assisted living.) I am reasonably certain the nonprofits that operate the buildings get some kind of government funding (probably federal government.) A few have cars but most rely on shuttles arranged by the complex to get groceries and take care of other shopping or get to medical appointments.

The ladies (and they are almost all ladies) seem to like it there. They organize their own social events in the common spaces.
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Re: What happens if you run out of money in retirement?

Post by Wannaretireearly »

LunaLauren wrote: Tue Aug 04, 2020 11:39 am This happened to my grandparents in their 80s, so I have seen it up close.

At first, they slashed expenses as best they could and tried to live off Social Security and pension only.

When their healthcare needs exceeded their ability to pay, they went into assisted living. Their home was sold and the proceeds went to the facility. Social programs paid for the balance to the facility.
I would have to move to a cheaper retirement country w/ cheap or free healthcare
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Re: What happens if you run out of money in retirement?

Post by livesoft »

HueyLD wrote: Tue Aug 04, 2020 11:56 am
livesoft wrote: Tue Aug 04, 2020 11:25 am I'd move in with my one of my girlfriends.
Well, the girlfriends may not want the burden of an old broke man. :wink:
I have other assets.
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Re: What happens if you run out of money in retirement?

Post by Nyarlathotep »

JAZZISCOOL wrote: Tue Aug 04, 2020 11:30 am Assuming you own a home, get a reverse mortgage or sell the house and downsize to a cheaper place.
+1

But I'm wondering how one could "run out of money in retirement" without numerous, obvious warning signs well in advance which would give one ample opportunity to course correct. Even if there were a sudden, prolonged plunge in the equity markets, there would still be safety nets like SS, Medicaid, and close family members to turn to for assistance.
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Re: What happens if you run out of money in retirement?

Post by dziuniek »

flyingaway wrote: Tue Aug 04, 2020 11:46 am
livesoft wrote: Tue Aug 04, 2020 11:25 am I'd move in with my one of my girlfriends.
Did you mean one of the rich girlfriends on this board?
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Re: What happens if you run out of money in retirement?

Post by dodecahedron »

smitcat wrote: Tue Aug 04, 2020 11:49 am
oldfort wrote: Tue Aug 04, 2020 11:48 am The idea of being healthy enough for a full time job at 85 is a fantasy. Most people end up doing one of several options 1) live off Social Security/pension(if available) as best they can, 2) reverse mortgage to live off home equity. 3) get financial support from family, 4) go live with family, or 5) live off some combination of government assistance programs, ex. Medicaid for a nursing home or assisted living.
Yes - exactly +1.
I do not know if my grandmother needed to do it, but she genuinely enjoyed part-time work as the weekend receptionist at the local TV station until shortly before she had an incapacitating stroke at 87. She really enjoyed dealing with irate folks on the phone wanting to know why their football game had been preempted or whatever. She was also the resident manager for her apartment complex until her mid-80s and enjoyed that too. And she loved ¨giving rides to old people going to the doctor,¨ as she put it though she was frequently older than her passengers.

She had been unexpectedly widowed around the same age as I was (59) and I remember she did a lot of international travel, including cruises and trips to Europe and the Holy Land, and dabbled in the stockmarket for the first ten years of her widowhood (1960s). As she got older and the stock market was not doing so well, especially compared to inflation, in the 1970s, her travels became simpler and domestic/limited to the East Coast. In her final 10 years, her travel was local but she had a large extended family in the area and was active in her community and in her part-time work and seemed very happy. Her last two years (between her stroke at 87 and her death at 89), she was in a very nice nursing home and had a lot of visits from loving family, but she did not recognize us.
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Re: What happens if you run out of money in retirement?

Post by bikesandbeers »

oldfort wrote: Tue Aug 04, 2020 11:48 am The idea of being healthy enough for a full time job at 85 is a fantasy.
When I was in High school, there was a elderly gentleman who worked at the Taco Bell that we hung out at after class. He must have been in his late 70s or early 80's. He used hearing aids, and had a stool he could lean on at the register. He was slow taking orders and had to ask people to repeat themselves, but he was generally pleasant and there for at least a year.
A lot of high school kids were less than nice to him.
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Re: What happens if you run out of money in retirement?

Post by Mr.BB »

bikesandbeers wrote: Tue Aug 04, 2020 12:14 pm
oldfort wrote: Tue Aug 04, 2020 11:48 am The idea of being healthy enough for a full time job at 85 is a fantasy.
When I was in High school, there was a elderly gentleman who worked at the Taco Bell that we hung out at after class. He must have been in his late 70s or early 80's. He used hearing aids, and had a stool he could lean on at the register. He was slow taking orders and had to ask people to repeat themselves, but he was generally pleasant and there for at least a year.
A lot of high school kids were less than nice to him.
What most of those high school kids didn't realize is that odds are some of them will one become just like him.
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Re: What happens if you run out of money in retirement?

Post by H-Town »

matti wrote: Tue Aug 04, 2020 11:24 am Hello.

This is a rather simple question (maybe even a silly one?), but I've always wondered about it. Let's say you're 85yo and you simply drained your retirement accounts dry and SS isn't enough to live on. What would you do? Move in with a son/daughter (if possible), get a job, something else?

I'm 41yo and a ways out from retirement, but I always wonder what I'd do if I ran out of money when I'm 85yo (or a similar age) and still somewhat healthy.

Thanks.
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Re: What happens if you run out of money in retirement?

Post by Frugalbear »

sailaway wrote: Tue Aug 04, 2020 11:32 am I would hope that I notice that I am in danger of running out long before I actually run out.
+1
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Re: What happens if you run out of money in retirement?

Post by KlingKlang »

My great grandmother was widowed at 58 and lived to be 98. She sold her home within a month of her husband dying and proceeded to live the next 36 years rotating between the homes of 5 of her 7 daughters. This caused never ending family fights over whose turn it was to take care of Mom. She finally became too fragile and spent the last 4 years of her life at a nursing home. She really had no concerns with managing money at all, that was her husband's job and after that her children's. After she died the grandchildren had to take up a collection to pay for her funeral.
Last edited by KlingKlang on Tue Aug 04, 2020 2:32 pm, edited 1 time in total.
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Re: What happens if you run out of money in retirement?

Post by btenny »

My dentist is in Sun City. For the first 10 years I went to him his receptionist was a nice very old lady. She worked there full time. I asked her once how she liked her job and was it fun? She said it was a OK job and she needed the money. I think she was about 85.

All around that area you will meet very old people working low wage jobs. They work at Jack in the Box and Seven Eleven and as waitresses and so forth. When we sold my FIL home in 2014 our real estate agents were two ladies in their late 70s (or older??). I am sure these old people are not doing this work for fun. When these people get real old they sell their homes and condos and move to assisted living. Most do this while they still have some $$ so they get into nicer assisted living homes. Then when they cannot pay that bill after a while they go on Medicaid. So they make hard choices.

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Re: What happens if you run out of money in retirement?

Post by Waiting_for_Godot »

dbr wrote: Tue Aug 04, 2020 11:51 am
oldfort wrote: Tue Aug 04, 2020 11:48 am The idea of being healthy enough for a full time job at 85 is a fantasy. Most people end up doing one of several options 1) live off Social Security/pension(if available) as best they can, 2) reverse mortgage to live off home equity. 3) get financial support from family, 4) go live with family, or 5) live off some combination of government assistance programs, ex. Medicaid for a nursing home or assisted living.
One thing that is interesting is that I do know people who live with family but essentially no one who has gone back to the college style of living with a roommate or two in old age.
When I first started working in the SF Bay Area after college I was renting rooms in houses; in three instances off the top of my head the owner was a widower who lived there.
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Re: What happens if you run out of money in retirement?

Post by Dottie57 »

JupiterJones wrote: Tue Aug 04, 2020 11:40 am
sailaway wrote: Tue Aug 04, 2020 11:32 am I would hope that I notice that I am in danger of running out long before I actually run out.
This ^^^

It probably wouldn't happen all of a sudden. Ideally, you're always keeping an eye on your retirement funds and reassessing the likelihood that they'll last you long enough.

If at , let's say, 75, you see that your present course is threatening to "drain your accounts dry" by 85, you would take steps at that point (reduce spending, look into annuities, pick up a bit of extra work, etc.) You wouldn't want to wait until it actually happens and your options are more limited.
Hopefully my mind is healthy enough to recognize my predicament.
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Re: What happens if you run out of money in retirement?

Post by GerryL »

Gill wrote: Tue Aug 04, 2020 11:44 am
sailaway wrote: Tue Aug 04, 2020 11:32 am I would hope that I notice that I am in danger of running out long before I actually run out.
This is the real answer. I would take some serious steps before completely running out of funds.
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Re: What happens if you run out of money in retirement?

Post by iamlucky13 »

oldfort wrote: Tue Aug 04, 2020 11:48 am The idea of being healthy enough for a full time job at 85 is a fantasy. Most people end up doing some combination of the following options: 1) live off Social Security/pension(if available) as best they can, 2) reverse mortgage to live off home equity(if a homeowner). 3) get financial support from family, 4) go live with family, or 5) live off some combination of government assistance programs, ex. Medicaid for a nursing home or assisted living.
It's very clearly the exception and not a scenario anyone should plan to place themselves in. However, it is not fantasy. It does happen sometimes.

Here was a widely reported local case of a woman who retired at 95 from the job she started when she was 20. Admittedly, it probably involved some special accommodation out of respect for extraordinary dedication, not to mention it makes for nice PR. However, it's not the only case I know of that involves people working full time into their 80's.
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Re: What happens if you run out of money in retirement?

Post by daacrusher2001 »

Oddly, it's my biggest fear. Probably being irrational. I'm pretty confident that I have enough stable income plus investments. A lot of really bad stuff would have to happen for me to end up old and broke.

I have witnessed "running out of money in retirement" first hand. Not a good scenario. It has definitely impacted my thinking about retirement planning.
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Re: What happens if you run out of money in retirement?

Post by oldzey »

daacrusher2001 wrote: Tue Aug 04, 2020 2:19 pm Oddly, it's my biggest fear. Probably being irrational. I'm pretty confident that I have enough stable income plus investments. A lot of really bad stuff would have to happen for me to end up old and broke.

I have witnessed "running out of money in retirement" first hand. Not a good scenario. It has definitely impacted my thinking about retirement planning.
Yes, it would not be pleasant. Dining options are limited when you're broke.

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Re: What happens if you run out of money in retirement?

Post by JoeRetire »

matti wrote: Tue Aug 04, 2020 11:24 am This is a rather simple question (maybe even a silly one?), but I've always wondered about it. Let's say you're 85yo and you simply drained your retirement accounts dry and SS isn't enough to live on. What would you do?
Find a way to live within my means.

That's not going to happen to me though.
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Re: What happens if you run out of money in retirement?

Post by JoeRetire »

surfstar wrote: Tue Aug 04, 2020 11:27 am at 85? I wouldn't care - that sounds like a long-lived life.
You must be young...
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Re: What happens if you run out of money in retirement?

Post by JoeRetire »

oldfort wrote: Tue Aug 04, 2020 11:48 am The idea of being healthy enough for a full time job at 85 is a fantasy.
Who said full time?

I know 85 year olds in my neighborhood who work part time to supplement their Social Security benefits.
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Re: What happens if you run out of money in retirement?

Post by sailaway »

oldzey wrote: Tue Aug 04, 2020 2:23 pm
daacrusher2001 wrote: Tue Aug 04, 2020 2:19 pm Oddly, it's my biggest fear. Probably being irrational. I'm pretty confident that I have enough stable income plus investments. A lot of really bad stuff would have to happen for me to end up old and broke.

I have witnessed "running out of money in retirement" first hand. Not a good scenario. It has definitely impacted my thinking about retirement planning.
Yes, it would not be pleasant. Dining options are limited when you're broke.

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Re: What happens if you run out of money in retirement?

Post by delamer »

Most areas have a government agency that provides services for the aging.

That’s the place to start for an elder with minimal income/assets who needs help with housing, food, medical expenses, and other necessities.
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Re: What happens if you run out of money in retirement?

Post by livesoft »

oldzey wrote: Tue Aug 04, 2020 2:23 pmYes, it would not be pleasant. Dining options are limited when you're broke.
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matti
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Re: What happens if you run out of money in retirement?

Post by matti »

Everyone, thanks for the great feedback. I appreciate it.
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Re: What happens if you run out of money in retirement?

Post by egrets »

JupiterJones wrote: Tue Aug 04, 2020 11:40 am
sailaway wrote: Tue Aug 04, 2020 11:32 am I would hope that I notice that I am in danger of running out long before I actually run out.
This ^^^

It probably wouldn't happen all of a sudden. Ideally, you're always keeping an eye on your retirement funds and reassessing the likelihood that they'll last you long enough.

If at , let's say, 75, you see that your present course is threatening to "drain your accounts dry" by 85, you would take steps at that point (reduce spending, look into annuities, pick up a bit of extra work, etc.) You wouldn't want to wait until it actually happens and your options are more limited.
You;re assuming they haven't already cut spending to the bone and are capable of working.
egrets
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Re: What happens if you run out of money in retirement?

Post by egrets »

livesoft wrote: Tue Aug 04, 2020 2:31 pm
oldzey wrote: Tue Aug 04, 2020 2:23 pmYes, it would not be pleasant. Dining options are limited when you're broke.
[ image of Alpo ]
I wish folks would not bring up cat food and dog food because those are much more expensive than just eating beans and rice available for human consumption.
Yes. It's a fable that people do this.
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