If the average family is less intelligent that you are, then why is the average family NOT homeless?
Some older folks just run out of jobs & money.
Absolutely true. Those who run out of money have a couple of reasons. One is large unforeseen medical bills - one of the main sources of bankruptcy in the US - obviously NOT their fault unless you say well they should have carried more insurance. The other for a lot of older people is either poor financial planning or absolutely no financial planning at all. People finance lifestyles they can not afford with debt (a second large reason for bankruptcy) or they put all of their earnings into lifestyle and don't save anything relying on social security.
Social security pays a max of about $3600/month which isn't enough to do much on especially with the ever increasing property taxes that most local governments charge you just for living in their jurisdiction - for example when I bought my house in 1978 my property tax was $620/year. It is now $4400/year. If it were just due to inflation it would be $2282. Fidelity says that the largest expense that you will incur in your retirement years ISN'T medical, but rather housing.
Living below your means is something that very few do anymore. Talked to a friend who uses a financial planner. He said that the planner told him that most of the couples who came to him in their late 50's and wanted to retire in the next few years had less than $60,000 in the bank. He had the sad task of telling them that they couldn't afford to retire.
Your comment about living below their means is very important. When we bought our first house, the mortgage agent told us how much house we could afford. It was an insanely high number that would have meant we didn’t buy food, or that we’d have to go deeper into debt.
When we were younger, most of our friends made about the same amount of money and had everything. New homes, cars, toys. We always lived frugally and now that we don’t necessarily need to live as frugally, we still do.
I’ve always had a 401K and while it’s not going gangbusters, it will be enough to retire on in 10 years. We basically lost our house in the last downturn. I lost my job and we had to move. We sold the house but lost virtually all of the equity, requiring us to buy a smaller house, for more money in a more expensive part of the country. I can now afford to move, but won’t.
All of our cars are used except my company car. (nice perk, but I’m on the road a lot) Of the five cares in my family, I think they have a total of 900,000 miles.
It’s called living within your means. It’s tough but not hard.
And, when I moved to another state, I was on my own for about 8 months. I gave some consideration to just urban camping, but found a cheap rental instead.
When I retire my property tax will be 1/10 the size at $400/yr. Still a nice big house. I estimate my housing at $1000 /yr. Location location.
Thanks for the Fidelity rank that house is biggest expense.
Hope to install a ‘real’ fireplace insert and burn cheap firewood, then housing will be near zero.
The other commenter nailed it, socialism creep eg no gold standard, made many older folks poor. Planners miss the mark, they are number crunchers. Crashing careers hurt many folks who sold their 401k just to survive.