As we age, do we get Poorer?

old medic said:
As did we... We started maxing out our 401Ks so when I retired my pension check was a little bit more than my take home pay. DW will be about the same come November when she retires. My SSD covers most of the regular expenses, and have a nice nest egg too.
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In Canada, we have a lovely program called TFSA's. That means Tax Free Savings Accounts and we can leave it alone and just draw out savings as needed, or we can invest inside those accounts and whatever you draw out will always be tax free. You're allowed to put in $7,000 a year to a limit of$95,000 overall. But if you invest you can do very well with it through interest or dividend payouts while leaving the initial investment untouched.
 

Debrah N. said:
In Canada, we have a lovely program called TFSA's. That means Tax Free Savings Accounts
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We have Roth IRA or 401K. Very similar idea, growth is tax free and if inherited its still tax free. There is annual contribution limits, but no cap on total amount. Then there are Conversions, you can take money from a regular IRA or 401K, pay the tax and roll them into a Roth.
 
The value of my assets, not including my house, grows every month. I have Social Security, an average size pension, and one small pension from a college I worked at fifty years ago. I'm saving way more than I ever did when I was working. Granted, I'm spending less but not because I skimp. I never expected to have this much money in the bank.

I don't want to blow this out of proportion. I consider myself lower middle class. I have zero debt, and I paid cash for the last three cars I bought (all new). My home is paid for. My goal early in my life was to live debt free. I know that is not the American way, but it was an important goal. But if I got really sick, I would probably be poor in a year. It's my biggest fear. I'll cross that bridge when I come to it.
 

JustDave said:
The value of my assets, not including my house, grows every month. I have Social Security, an average size pension, and one small pension from a college I worked at fifty years ago. I'm saving way more than I ever did when I was working. Granted, I'm spending less but not because I skimp. I never expected to have this much money in the bank.

I don't want to blow this out of proportion. I consider myself lower middle class. I have zero debt, and I paid cash for the last three cars I bought (all new). My home is paid for. My goal early in my life was to live debt free. I know that is not the American way, but it was an important goal. But if I got really sick, I would probably be poor in a year. It's my biggest fear. I'll cross that bridge when I come to it.
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I'm in the same situation as you. I was a tad concerned about how retirement would hit me financially but then found myself surprised to end up a bit better off every month. It helps to go into retirement debt free, and also have the financial resources to cover any new expenses, but overall I am financially better off now then when I first retired. Yet I still live conservitally because I'm well aware that sometimes life just blows up on you.
 
20/20 hindsight: One big mistake we made was paying off a mortgage that was less than 3% APR and not investing the money in other real estate or the stock market. After years of carrying 2 mortgages and the other. huge bills coming w the NYC lifestyle it seemed like the right thing to do at the time. But no one could predict the changes resulting from the pandemic like 20% inflation over 4 years and the meteoric increase in real estate.

We've made it through the first 5 years of retirement w/out a 20-40% drop in the stock market which is probably the riskiest period of retirement.
 
Depending on how bad inflation becomes in the next few years I plan on saving as much as I can since I still work part time. I’m really glad my SS will be increasing because this country may be in for a rough ride.
 
againstthegrain said:
20/20 hindsight: One big mistake we made was paying off a mortgage that was less than 3% APR and not investing the money in other real estate or the stock market. After years of carrying 2 mortgages and the other. huge bills coming w the NYC lifestyle it seemed like the right thing to do at the time. But no one could predict the changes resulting from the pandemic like 20% inflation over 4 years and the meteoric increase in real estate.

We've made it through the first 5 years of retirement w/out a 20-40% drop in the stock market which is probably the riskiest period of retirement.
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You can drive yourself nuts fussing over what might have been.

Slow and steady wins the race! 🐢🐢🐢
 
With my SS and Union retirement, I was doing very well until the last four years of rising prices for groceries and other services. The thing most young folks don't realize is that we pay big bucks for our SS and it and the secondary goes up every year and also the deductibles go up. My union retirement is locked in and stays the same until I die. The paltry cost of living raise SS gives us, is a joke compared to rising prices. I still do alright and saved money monthly until the last couple of years.

My SS was earned and paid for by me, and not an entitlement or free gift from the government. I made a lot of money during my working years and paid taxes out the wazoo.

I know the day is coming that I will have to sell this "banana" ranch and I hope to get a small place just slightly bigger than a tiny house, that has low upkeep. The problem is, getting the place I want nearer family and medical, will cost more than I will get from this very well maintained larger house and acreage.
 
old medic said:
We have Roth IRA or 401K. Very similar idea, growth is tax free and if inherited its still tax free. There is annual contribution limits, but no cap on total amount. Then there are Conversions, you can take money from a regular IRA or 401K, pay the tax and roll them into a Roth.
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Sounds like variations on the same idea. Basically methods to encourage saving for retirement if it's at all possible depending on the income.
 
againstthegrain said:
It's only bugs me when I drive by the "Miller place" that sat on the market for 4 years waiting for me to buy it.
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We bought the "Millers Place" and it sat abandoned for over 10 years... Its taken us 5 years to basically totally rebuild the place after we almost just burned it down. Its been a DIY job paying as we went along. Although not finished, We moved in on the 23rd.... after over 7 years in a camper....
 
old medic said:
We bought the "Millers Place" and it sat abandoned for over 10 years... Its taken us 5 years to basically totally rebuild the place after we almost just burned it down. Its been a DIY job paying as we went along. Although not finished, We moved in on the 23rd.... after over 7 years in a camper....
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Seven years in a camper is a long time. Can't imagine doing that myself. But I guess you adjust eh?
 
old medic said:
We bought the "Millers Place" and it sat abandoned for over 10 years... Its taken us 5 years to basically totally rebuild the place after we almost just burned it down. Its been a DIY job paying as we went along. Although not finished, We moved in on the 23rd.... after over 7 years in a camper....
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My situation was much different than yours and was never going to be our primary residence. It would have been a perfect rental and had space to built a storage(campers, boats, vehicles), which is limited in our home. It's taken me 5 years to "solve" my storage and it's not nearly as convenient as the Miller place. And it's value has at least doubled in the past 5 years.
 
I wish finances were the reason I'm not traveling as I had hoped to do in retirement. It's health. I'd gladly trade you if we only could but you would be getting the raw end of that deal and would cuss me out daily for getting you to agree to that swap. It's illness, severe chronic pain and mobility impairment preventing me from traveling.

But money wise, I have SS and a pension from my previous employer, the State of New York. I also don't rely on Medicare (can't what that doesn't cover is astounding and why I don't believe in socialized medicine) but the insurance I kept at a lower price than Medicare from my State job, which reimburses my Medicare premium. Good because Medicare is useless.

I don't drive. Never did. And I rent, so no property taxes and maintenance. Well, technically, if anyone thinks their landlord's operating at a loss, they're a fool; renters do pay property taxes and maintenance but it's part of their rent. So it's a steady monthly expense with no surprises, except perhaps at the end of your lease because if they went up for your landlord, that rent is going to jack up in the lease renewal. You have the option of moving but that's expensive so you have to weigh that against the rent increase and, of course, can you really get anything cheaper. These days... not so much. Rents are up.

But still the grandson is adult so his mother, the child has long been gone. The child that was the bulk of my single mother expense. I could afford her or a car while she was growing up. I chose her. (Go figure.) I raised her alone without child support or assistance of any kind.

Except that year we were adopted by our local firefighters and Santa really came. Even my vicious cat 🐈‍⬛ liked him. (No lie, the cat I warned everyone do not pet she will bite you, as his men looked on amused apparently used to this, curled up purring on the chief's lap like she was in love when he ignored said warning saying cats always like me. He didn't lie.) Needless to say, it was throughout her childhood that I felt poor and lived paycheck to paycheck.

Now, I have SS and the pension and a few thousand in the bank and a very high credit rating. Weird how your credit rating goes up when you're not using it and have no need of it. Well, not no need. Landlords do often have a minimum credit rating (which I'm over 100 above what they usually ask) these days. So it does help me get nice apartments.

I'm doing my best ever financially and feel rich (even though really I'm lower middle class) and I must admit I do like not worrying about money for a change but, man, I'd rather have my health. Though it's a Catch 22. It's probably all those years of poverty and seeing to my daughter's needs before my own that caused the bad health. Well, that and bad genetics. Which, sigh, are starting to catch up to her at 42.

If I did pay for a car. I'd be poor. I'm not willing to live in a scary neighborhood to own a car. Period. Point blank.
 
In the UK, we have ISAs which are tax free savings accounts. These can either be for a fixed term, or as savings accounts. The max you can invest is £20k a year. You can withdraw from Savings accounts, but lose lose some interest. Mrs. L and I use these accounts and can generate enough interest to pay for holidays or other treats.

As to the question, do we get poorer? I think that is a very individual matter. If you retire with reasonable savings and invest wisely, you can get by OK, although not everyone can do that. In the UK, the state pension is very poor and even with additional benefits, it is getting harder to maintain a good standard of living.
 
My parents were quite frugal, and the lessons I learned from them have allowed us to live a decent retirement. I continue to recommend the need to control debt and save for the future to our kids and grandkids, as things like SS may be of minimal help in the future for them. I just wish that IRA/401K plans had been available when I started working, and that I had been smart enough to participate. As it is, between SS, our IRA, and company pension, we meet our needs and continue to save a bit more every year.
 
Back in Nov. 2023 we had a CD that matured with a payout of $52,500.00 We could have added a little more & bought 1000 shares of TLN stock selling at this price.

Nov 10, 2023 54.15 56.89 54.06 (54.75) 54.75

1000 X 54.75 == $54,750.00

But since it didn't pay a dividend we reinvested in another CD. In truth at our age less risk is primary.

A year later

Nov 11, 2024 208.50 211.79 202.22 (209.22) 209.22

1000 X 209.22 == $209,220.00

No regrets just fascinating to me how time & age affect decision making.
 
I may move to a lower cost of living state. I chose well many years ago when I decided to live where I am now. Perhaps too well. The place is flooded with newbees who are still working and have incomes well above my retirement income. They are bidding up everything from cars to house. Grocery stores can easily charge more because these people have the money to pay more. And the goverment sees that they will gladly tolerate 10 or 15% increases in things like the property tax, so they do it. So it may be time to sell my modest home and bug out. Even then, the Feds now want capital gains tax on the profits, which will make it harder to buy a descent home where ever I move.
 

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