Could you retire on $12k/year? This article explains how to do it. Apparently the average SS payout is $1,082/month which is around $12k/year income to live on. But do most people survive on it? I think so. More than you could imagine. My grandmother lives on a bit less than $12k/year more like $10k ($900/month from SS and a small pension). But she survives living alone mostly because of help from her family.
But this article suggests for struggling seniors the answer comes from communal living. Imagine moving in with roommates much like the tv “Golden Girls.” Where 4 older women move in together so one of the women could keep her home in FL instead of selling and downsizing.
The article suggests sharing a home and common utilities. But potentially older roommates could share a car or food in bulk. These actually are very good idea. Another reason not mentioned in the article is living with others gives increased safety. In case of an accident, you won’t be in a home by yourself waiting to be checked upon. If you slip and broke a hip, you’d be found immediately by a roommate. Whereas if you live alone it could take awhile.
Also companionship provided by having human interaction. Some older people lose contact with friends and family as they age. By having roommates, they would still be stimulated daily, and it has been shown that people with 3x/week contact with friends live longer, have lower stress levels, and are overall happier.
So sharing expenses might be the first reason to move in with others. But there are many other non-tangible benefits as well. What do you think?
8 responses so far ↓
1 Grace // Jun 28, 2008 at 8:15 pm
I dunno. I think this is one of those ideas that looks a lot better on TV than it does in real life. Of course, I’m sharing quarters with my 33 year old daughter, her partner, and their four kids at the moment and I’m ready to tear my hair out! You are right about the safety angle, but there have to be ways that do not entail other people eating my food and hogging the TV.
2 Barb1954 // Jun 28, 2008 at 8:30 pm
If we were widowed, I could see sharing a home with either of my sisters at some point in the future. But living in separate halves of a townhouse or duplex might be a more realistic solution.
3 Barb1954 // Jun 29, 2008 at 1:21 pm
Reading over your post a second time and the article, I’m going to disagree with your statement that most retirees survive on a $12,000 income from Social Security. The article says:
“Millions of people face this predicament. According to the Social Security Administration, Social Security benefits account for 90% of income for four of every 10 unmarried retirees and two of every 10 married couples.”
Stated another way, for the majority of those receiving Social Security benefits - 6 out of 10 unmarried retirees and 8 out of 10 married couples - it makes up less than 90% of their income. Most people also receive income from either a traditional pension plan or a 401(k) or IRA or both. Heck, my parents (who are in their mid-70’s) pay about $6,000 each year in premiums for their medigap insurance alone. I know there’s no way they could survive on SS alone.
Looking at the statement my husband received this spring from the Social Security Admin, if he retires at his full retirement age of 66, he’ll receive $2,081 a month. The last statement I got said I would receive $1,694 a month. Our combined benefits of $3,700/month combined with withdrawals from our 401(k) and IRA accounts and our savings should replace a large percentage of our current income. Since our home will be paid for in six more years, we will also have eliminated our biggest expense about six years before heading into retirement and can save even more.
Although I don’t doubt that millions of people do live only on what they receive from Social Security, I don’t think this is the norm.
4 Livingalmostlarge // Jun 29, 2008 at 3:02 pm
40% of single people and 20% of married couples survive on SS, use it for 90% of income.
Remember people who were older have pensions, people in their 50s, I think about 50% still have pensions, but going younger it’s substantially less.
Also when you depend on SS, like my grandparents you don’t buy supplemental medical. You can’t afford it. And when you get sick you quickly run through what little money you have and then go on medicaid, not medicare which every gets over 65. Medicaid is for people under a certain income level.
My mom has “worked” the system for 30+ years. She’ll tell you that having so much in retirement is unusual. Have you seen the current numbers? Most people have depended on being bailed out by medical provided by their employer think ford, chrysler, enron, united, etc. All these people were counting on pensions and medical. Even unions, but the thing is they can’t anymore.
And how many more who are in their 40s suddenly find their benefits frozen, or rules changed for drawing? Instead of 25 years they need to wait till 55 or 65 now, etc.
Look at Grace, the first poster. I highly doubt that she’ll be pulling in tons during retirement. And SS might be 50% of her income. But that’s real life.
5 Barb1954 // Jun 30, 2008 at 8:17 am
But the percentages you’ve quoted do not add up to “most” people.
6 Grace // Jun 30, 2008 at 10:53 am
Well, now that you’ve brought me into it. . .
Social Security WILL make up the bulk of my income in retirement–according to the year-end statements I get, I’ll receive $2504 per month if I retire at age 69 (ten years from now). I’m planning on $3500 a month for living/fun expenses so some 70% of my income will come from Social Security. But by that time, my house will be paid off and so will my debts.
7 Jim ~ mydebtblog.com // Jun 30, 2008 at 11:19 am
I think you have said it best yourself:
“Most people have depended on being bailed out by medical provided by their employer…” I would also include government in that.
Should it be our right to expect the government to take care of us in retirement? Do we expect them to front the cost of our health care? I would rather opt out of things like social security and medicare so I can save and invest the money myself. Social security was not designed to live off of but there are a lot of people who try.
8 Meg // Jun 30, 2008 at 5:49 pm
I think the idea of communal senior living is fantastic; it combats some of thethe financial, emotional, and health/safety hardships that seniors often face.
However when you talk about a bunch of senior friends/acquaintences or even relative sharing a home, I can’t help but think it’s a bad idea.
Sooner or later one or more of the seniors is going to face rapidly declining health, mobility, and mental function. Odds are that the other roomies will be ill-equipt to handle that.
And what about the financial issues that come with them co-owning (or even co-renting) a home? What happens when one of them dies and can no longer pay her portion of the rent/mortgage? What if the other 3 can’t pony up the difference? If they own it, who gets the house when they die - or when one dies? Very complicated, and very sensetive issues.
I think senior communal living is a good idea, but it would work best in a regulated community with professionals on hand to facilitate these issues.
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