401(k)s Are a Negligible Source of Income for Seniors

[haele]

124. I'm the child of depression era parents, I can handle it.

The trick is, even if you complain about it here, is to deal with what you can deal with, keep an eye on what you can't so it doesn't come as a surprise and do more damage than expected when it boils over.

I've been through worse times before, doing okay now, and things are looking up (so long as I can keep working four more years!), but still, I've learned how to deal.
If we're a bit late paying a bill, call them up and make arrangements for a late payment or spread out payments. Try not to get the utilities turned off, make a fair effort at paying them something. If we have to float checks or depend on overdraft protection, so be it. If our credit is in the tank (and it still is - thank you, insurance companies!), so be it. If we go bankrupt (knock on wood, not yet...), so be it. If I have to live off a large tin of oatmeal and the kindness of co-workers for a month so everyone else in the house can eat, so be it - my parents have done that and I've done that in the past.
It can all be dealt with, so long as one's expectations are to survive. We understand that we're going to have to pay the fees and the penalties for being "less financially competent", but above all, we need to keep out of the eviction process and do whatever we can to keep working, because there's no safety net if you look to be a healthy adult who can work, even if there's no jobs available for you to work at that pays a wage you can pay your basic bills and rent on.

As it is, in three years, I'll be eligible for my military retirement pension and Tricare which will help the financial situation immensely (like, use the pension to pay off the student loan before ten years I've agreed to) - and then ten years after that if I can keep working, I can start collecting a maxed-out income on Social Security. The IRAs and the 401K won't ever be enough for us to "retire on", but they can be used for a "rainy day" emergency fund and/or trust funds for the grandkids.

I know what my needs (and my husband's) are, and the primary ones will always be: a roof over my head, utilities, food in the pantry, and health care. We've got some of that already taken care of; we own our own double-wide free and clear, even though we pay rent on the lot, and we're close to a major public transportation center. Lot rental is not bad at all; managed rates with a 10 year lease that are still half the cost of a 20 year mortgage on a much smaller sq. house with the same sized lot that we could afford in our area - plus we get security, a swimming pool, sauna, large picnic area, club house with full kitchen, and a Jacuzzi! And it's a family park, so if something happens to the kids, we can keep the grandkids with us.

Anything else else in life - eh...travel would be nice, but if we can't afford it, we can't.

That's why maxing out the HSA is far more important now than maxing out the 401K. Medical will be the big expenditure in the future, and this is a pre-tax/fee-free account with no tax liabilities for withdrawal, even on any interest accrued so long as we keep using it for medical expenses. So long as I've got what's considered high-deductible insurance, I can keep adding to it as part of a pre-tax arrangement. Brings my taxable income down and ends up saving me around $1100 a year in total taxes and fees owed.
Unlike the 401K, which becomes income and gets taxed as such as soon as we start using it.
So, I run the opportunity costs model, and deal with what I can deal with.

Anyway, thanks for the best wishes. And may you experience a relatively stress-free time dealing with your finances over the next couple years, yourself.

Haele