If anyone has experience dealing with job loss due to economy and job loss due to health it is me. I'm living it every day of my life. Because of this I am not naive enough to think it couldn't happen to me, just as it did to DH. Though to be honest I'm hoping since we are already dealing with it with DH, it won't happen to me too....I mean c'mon what are the odds? So what would I do if I were to get laid off from my job or I got ill and couldn't work?
If I got laid off, of course, the first thing I'd do is file for unemployment benefits. I'd hopefully still have my 2 side jobs for extra income. I'd start looking for other small side jobs to supplement. I'd take a full time temp agency accounting job while I looked for work. Other than when I voluntarily left work to be a SAHM, the longest I ever have gone being unemployed in my life is 2 1/2 weeks. The handful of times I've had to search for a job over my adult life, I usually only went on 2-3 interviews before I was offered a job. I didn't even search for the position I have now - they searched me out. While it would probably be harder in this current economic times to find work, I'm pretty confident I'd be able to find something. With my profession (accounting) and experience, I can easily work in any industry out there, so I am not limited to a certain industry. My friend, who was a college financial aid administrator and got laid off, is having a dickens of a time finding that kind of work - there are only so many colleges and universities in her area, so job openings are extremely limited. She is probably going to have to take a lower paying job and get trained in something new. I also have a good friend (who worked where I work now and hired me, originally) who is now an independent financial consultant. One call out to him and I'm confident I would find work quickly. I don't know how many times he tells me if I ever want to leave where I am just call him. Worse case scenario and it was long term unemployment, I'd suspend my monthly car payments to my mom while I was unemployed, we'd have to sell DH's truck, etc.
If I was physically unable to work anymore due to health problems, we'd of course have to make some drastic changes in our lifestyle. I know my company offers some short term disability coverage that I think covers 60% of salary. I work for an amazing small company owned by 3 gentlemen who I'm pretty sure would make sure my salary was covered if I were to be on short term disability. They did this for a person who hadn't even worked for our company too long and found out she had cancer. They covered more of her salary than they were required to do and I think she is forever an employee now, because of their generosity. She just couldn't believe that they would do that for someone who had hardly worked for the company.
If I was permanently disabled I'd qualify for Social Security disability, which according to the last report I got, my monthly benefit would be about $1675 a month. I'm not sure how it would work or if we'd also get some extra for dependents, something to check into. I'd also most likely have to take some of my 401k/pension each year to live on and the sale of our assets. Obviously, if both of us couldn't work we couldn't continue to live in this house. I'd try to move somewhere as close as possible, but with lower cost of living/housing and we'd just have to really downsize into a small rental. In our town a one bedroom apartment goes for around $700/mo. If that's what happens, that's what happens, I guess. We'd be down to one car, if one of us could still drive and just be living very very frugally and obviously not supporting 2 kids.
If I'm lucky enough to reach retirement age, at age 67 my estimated Social Security will be $1957 a month, if I can work until 70 it will be $2457. DH will be able to draw half of my benefit amount. At age 67 our annual SS income would be about $35,000 plus we will have whatever my 401k is by then. I think with just the 2 of us and a paid off home, we can certainly live on that a year and it would be even more if I can wait until age 70 ($44k a year). Odds are somewhat in my favor as far as a healthy and long life - my grandma is 94, my mom is 71 and still very healthy. So far I seem to have inherited their genes. Though unfortunately I got my grandpa's genes for early premature gray (actually it's white) hair! hah! I started going white at 24, so that's why the $5 a month home color job. I'm just not going to look like some gray haired 65 year old lady when I'm 48! Both my kids appear to have this too....DS has quite a few white hairs and DD just recently (to her horror!) found a couple of pure white hairs in her long hair.
The other "retirement" that I will most likely have is the inheritance from my mom's estate. I'm an only child and at this point she has about a million dollars in savings and investments and with her SS and she lives pretty frugally, she barely touches this nest egg yet and it just keeps earning more. It's not something I'm putting in my future planning for later retirement, but in all reality it's pretty likely I will inherit a nice sum at some point in the next 20 years or so, when I am about to retire.
No one can predict the future and mine sure isn't what I ever expected it would be, but we are doing our best to get by. Like Sluggy said - sometimes you just gotta tread water for awhile. We've been treading and now have a little more to start putting in savings with my raise and the kids starting to pay for some of their expenses. I'm just glad I had the EF fund I did have built up in order to pay for the medical that came up this year. Basically, I'll be treading for 4 more years and then I will just be supporting Dh and myself. My plan at that point is to really be able to save a lot more. Our house will be paid for in 14 years, so I should also have several years of working after that and having no house payment anymore. That house payment money will go towards retirement savings at that point. It's all by far from an ideal situation, but life just doesn't work out that way for too many people.