Sunday, September 30, 2012

If more bad luck comes our way...

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.


  1. Good to think about theses scenarios and to be somewhat prepared for them should they happen.

    Although, unless your mom has specifically told you (and that it's in her will) that you will inherit what she has stashed away, you can't really count on it - how do you know she hasn't left it all to an organization (cancer research, Salvation Army, etc.)? And no telling what her future health care will entail her to pay out of pocket - or if she should have to go into assisted living/nursing home. With longevity on her side - she may just go through that next egg before she passes. You should encourage her to spend it and do things she has wanted to do in life - travel, etc. It would be sad if she's not spending it because of your financial situation, I think.

    We tell my parents to spend everything that they've worked so hard for - we don't want anything. We truly want them to enjoy the fruits of their many, many years of hard labor. They sacrificed so much for us growing up that we don't want them to do without anything now (and tend to spoil them rotten!!).

  2. Well, my hubs' siblings planned on getting a honking big inheritance from their mother. She sold her house and retired to a small apt. near us and with her SS she didn't need to touch her nest egg.
    Until she developed Alzhimer's and over the course of the last 7 yrs until her death she had to go through every penny and then some.
    She had no long term care insurance and the care bankrupted her.
    More and more people end up leaving this life in that state instead of going quickly with other diseases. I wouldn't count on a parent's estate as any part of a retirement plan for their children because of our experience. If "things" turn out otherwise and one gets something in a will, great!....but don't pin your hopes on it.

    And remember that even though your SS is estimated to be $XYZ, either by the time you collect the amount/way it's calculated may be different AND there will be medical costs to pay out of your SS monthly--either like there is currently for Medicaid and/or whatever the successor to Medicaid turns out to be if the govt. changes that. I believe there are calculators online where you can get a better idea on how far that SS $ will actually go once any medical payments are taken out. Not that we can know what the future really holds for us with any Govt. entitlements, but the more scenarios you can run can make you feel more secure in your plans.

    Sorry that I am such the wet blanket lately but being a bit older than you and having gone through some stuff and having already worried over/planned out our retirement possiblities, I just want you to consider all the outcomes.

  3. And the way SS disability works is this....if the person going on disability has a minor dependent(s), the minor child(ren) gets a benefit too. The child loses the benefit at 16 I believe? Might be older...

    Hubs brother's wife was on SS disability for a mental illness. They also got a benefit for their minor child. When my BIL's wife died, BIL got a SS disability benefit too for being the caregiver/sole support of his dead wife's minor child, so then he and the child got a SS benefit but they lost the original payment to the wife.
    When the child turned 16, the BIL lost his benefit since the govt. considers a 16 not a minor in that they are old enough to get a job. When the child turned 18, he lost his dependent benefit but the BIL got his benefit back. I don't understand why BIL got his back, since he can work and he wasn't dependent on his wife's income before and he no longer has a minor child. I don't know how it all works but that is how it worked in their case.

  4. Like I said - I'm not planning an inheritance from my mom in my future plans. It's just something that might add to what we have. Yes, she has specifically (as recently as last week) told me I am the sole heir and it's being left to me (as also has my uncle, who has no wife or children, but again, I'm not planning for it). Do I expect it to be what she has now? No, just saying if she ends up with any money, I will inherit it. I'm certainly not expecting any of it nor would I ever expect her to not spend her money because of me or to spend any of what she currently has on me. That is the last thing I would do. She lives her own life and has always been a very frugal person - probably where I learned it from.

    At this point all's I can do is keep adding to my 401k and hope my employer keeps matching and keeps putting in another deposit for profit sharing. Hope I get to keep working and build the retirement fund after we don't have to support our kids anymore.

    I realize SS is an estimate - but what else do I have to go off of to at least formulate some sort of plan should we need it? I also realize that medicare will come out of that SS payment as well as some sort of supplemental insurance will be needed.

  5. Thats one of the big reasons I am working to get rid of all this debt and start socking everything I can away for our future. We are behind in our retirement but do own our house. Both hubby and I have long term care insurance though...I consider it part of our retirement


  6. Judy - that is great you own your house. I'm sure you'll be able to catch up with the retirement. I was just planning to look into the cost of long term healthcare more for myself (If DH was even able to get it I'm sure it would cost way too much at this point). I'm also going to be getting some more life insurance on myself before the end of this year. I have some through work, but it's not quite enough.