I never made a good enough salary to put away any money for retirement. Before meeting my wife, I basically lived "paycheck to paycheck", but done fine. However, my wife was very, very different. After she got her Bachelors Degree in Accounting/Finance, she made darn good salaries in jobs she had. Our lifestyle is "ok". Being "ok" means that we have a 2005 Dodge Durango with almost 180,000 miles on it, but still running descent. Have a 1992 20 foot boat, that we've had since 2009, but have put quite a bit of money into it. When we go out to eat, we generally bring home any leftovers and eat the next day. IOW, we do fine, but, after she no longer has the "at home" job she has, our budgeting will really start again.
I retired with an attractive pension, but I also had decent savings/investments ... which I still contribute to . Have never needed to take from it due to IMO living within my means. And i have no complaints about the way I live. I have never been drawn to the latest trinkets / gadgets,phones & such. And never drawn into gambling either. I said to a friend that seems to be 'broke' all the time ... It's not what you make , it's what you & how you spend.
I don’t think there was any way we could have retired without some type of savings plan. We invested, saved, and have a pension along with social security. Our lifestyle is comfortable.
I have savings, but my lifestyle is so low key that I only tapped into them to buy a car a few years ago. Absent that expense, I've been living off of social security. Money is a funny thing. It cannot make you happy, but lack of "enough" can sure add stress.
Elle--you are quite young compared to many of us here. At 51 you still have lots of time to start saving for retirement (unless you plan to retire really early). Like Krystal, I'm not sure we could have retired without savings to supplement. We could probably "survive," but it's more fun to "live." Day to day expenses are doable, but at the rate the cost of living, taxes, health care, and insurance are increasing it would be scary to not have a cushion.
Elle, you aren't even consider a Senior yet! There are those that can live off of SS alone and do fine, while others, not so fine. It really depends on how much SS you get per month and, with a good enough salary at a job, how much you can save into the bank.
Being forced into retirement in my early 50s because of illness, I can say I would have never made it the 4 years I had no income waiting for the legal process to award me my Social Security Disability. Being single I had no other income and while I could have started drawing on my union retirement, it would have been at about a third of what I could get by waiting for it to be considered a disability retirement. I only survived because I had my house fully paid and was able to borrow against it. The last year when that ran out, now having a house payment plus about $25,000 a year to pay for medical insurance, deductibles, and copays, I had to use credit cards and juggle money around paying monthly minimums by getting a new card. Finally, when I was at the end and facing having nothing, my disability was approved. I got a nice large amount for back pay, but it was used to pay off credit cards and all loans but the house was then at 30 years. I had $60k in interest that I paid and all that remained in debt was my house that was once paid in full. My suggestion to young folks is to buy a place that is a good investment and pay ahead on it. That is better than renting and trying to save in retirement funds that are mostly unstable. Money in the bank used to be a good idea, but having a place with a mortgage that allows you to double pay your mortgage and build borrowable equity is more secure since property values increase and bank savings draw little interest. High-interest rate savings can be wiped out by no fault of your own. To answer your question, I can't see how anyone could make it and retire without some savings or real estate equity unless they lived poor and could qualify for welfare medical, and food assistance. If you owned your place and could live semi-self sufficiently, it would be possible until a medical illness or accident occurred. You can lose thousands in just a few days. Had it not been for an unexpected disability, I would be very well off for a woman making it all on her own.
It's an interesting question, because there are some number of folks who survive an entire lifetime without ever having had a job. I live in a rural area and worked for a non-profit that did home repairs for folks who could not afford to pay to have the work done. We had an application/approval process, and one of the qualifiers was income level (it had to be low.) There are folks who pay their bills on $700/month, but they are getting other assistance (Medicaid, food stamps, local programs, etc.) There are households with parents and several adult children--as well as those who shack up together--with the main goal being aggregating their benefit checks. Those are the realities of how some folks without means (or sometimes motivation) survive...but all they are doing is surviving. Heck, I've seen some who adopt/foster at least in part for the resources each child brings into the household. Again, this is obviously not advice...but it is the reality of how some number of folks "make it." I was late to the savings game...I was older than you before Retirement Panic set in. I was lucky that I had bought a house when I was in my 20s and resisted the urge to "trade up," so I had equity. I was also fortunate that I spent the last 10 years of my career in a good-paying job that helped fund my 401(k) via a profit sharing program. Lots of folks procrastinate on this (a facet of larger personality issues.) In fact, the tax code has provisions for us...the cap on tax-exempt annual 401(k) contributions is raised when you hit the age of 55 (I think that's the threshold.) It's called a "Catch Up." Keep in mind that Social Security is based on your highest earnings years (I forget how many years go into the calculations), so you might consider doing what you can in that regard (2 jobs for a period of time, etc.) You could make an appointment with Social Security to review your account (including your earnings history), and for them to give you details on how your benefit is calculated. Then you would know how many years you would need to double-work to get your income up to build the base for that future check, and to also start saving. The upside to working lots of hours is that you earn more money and you have no time to spend it (I've been there.) Since you are in your early 50s, you're looking at this with enough time left to influence it.
I want to really thank everyone for sharing and advice so far, it is GREATLY appreciated! Looking forward to learning more!
There is a radio/youtube guy called Dave Ramsey. He has a lot of good advice for people, even those without savings. First recommendation is to pay off all debt. He explains the baby steps on how to proceed. I bought his book for my daughter who is in a hole. The first thing she said was, "I can't possibly give up my morning latte!" I knew, then, why she was in a hole and that she would never get out of it, even after some help from me. Her husband has health issues and is a gadget techy but how they manage money makes me nuts. I have always been a prepper. I go through scenarios of what if, even Social Security going under. Government changes rules and requirements at will.
I like Dave Ramsey. When you are young, one may not think you can afford to save anything, but you can and you must. You can't afford not too. We started a 401k when it was first offered to us at 30 years of age, but the earlier you start, the better. I was so nervous thinking we couldn't get by without every cent in our paychecks, especially when we were living from paycheck to paycheck. I'm so glad we did. As long as our health holds up and things don't go to hell in a handbasket, hopefully we should be fine until the end.
My wife and I retired just over 10 years ago (74 and 75 y.o.). We are collecting S.S. but that, by itself, would not have allowed us to stay in our current home. But, that’s our situation, so much depends on one’s lifestyle, unexpected and unavoidable expenses, etc.
One reason we made this out of state move is in hopes of making our money last. Had it not been for a savings account we might not have been able to move. Very very expensive. When hubbys dad passed away, the inheritance he got, helped when he retired at almost 65. We lived off of that pretty much for 4 years. Now, it is SS for most part. Financial advisor said we are good for at least ten years. that sounds good but as we all know, with in a blink a medical Er can do you in. That is a big concern. So answer is - we have some retirement, question is will it really be enough?
@Elle Lewis A comment you made elsewhere regarding transitioning to being an employee reminded me of more than one business owner who started reporting--uh--"off the books income" so as to increase their Social Security base in preparation for retirement. So lots of folks start to do lots of things when the finish line is in sight.