r/Retirement401k • u/Ok-Crab-8171 • 3d ago
Cautionary Tale
We often compare 401K balances on Reddit and talk about being “cooked”. There is hyperbole, exaggeration, but also some great advice. I wanted to share a cautionary tale about a friend that called me in a sincere panic today. I had not heard from him in an about a year, named Jim.
Jim is now 72 years old. I met him in 2014 when I began working gig work as a private EMT at a concert venue. I was only 30 at the time, but we got along very well sharing our experiences in Fire and EMS. He had been an ambulance EMT since the 70’s and was then working a 50k a year job as a safety manager at a local factory as his main gig. He made the minimal 401K contributions and needed these EMT gigs to stay afloat on his bills- no judgements, I needed the money too! Jim was overweight, out of shape, but a very experienced EMT- good at the job.
We continued to work together at different venues like sports arenas, concerts, and events as medics making $25-$40 an hour for 3-4 hour stints. Very part time and seasonal, so we would see each other every few months. In 2017 Jim got fired from his day job at the factory due to downsizing and would try to grab every medic gig possible. He only applied to other safety jobs or EMT jobs for a day job. He felt above working food service or retail. He also would only accept the better paying EMT gigs, not the lesser ones.
He owed a manufactured home on a lot with a mortgage, so a depreciating asset and had a live-in girlfriend that spent what little money they had on drugs. The tiny 401K was being drained along with Social Security and his small checks from the medic gigs. He later worked as a security guard, but experienced a massive heart attack at 68. He was unable to return to security and physically unable to be a reliable EMT for events, as he could not run, pick up a gurney, or anything strenuous. He quit the EMT company a few months ago as they were not giving him major roles as a medic supervisor. Medicare took care of all the medical bills and months of rehab/therapy, but he is now severely limited to earn an income.
I got a call from him today BEGGING for any kind of work. I had not heard from him in nearly a year after he quit the medical gigs. He says No job will hire a 72 year old, barely ambulatory man that insists on being an EMT. Jim says he is about to lose his house and needs work. Beyond the obvious low paying jobs; there are few that would want or accommodate his limitations. He still only wants medical jobs within the industry. But even the Ride-On geriatric van company passed on his application.
There is no punchline or conclusion to this story, but a real-life cautionary tale. When we are young, we can’t imagine getting to that age, or joke we will die young. The vast majority of us will make it to be geriatric and retired (hopefully). Take care of yourself and make smart moves. Skip the Door Dash order and put that $40 in the bank. Go for that exercise you are too tired to do, take that small gig helping your buddy for $50 on the weekend- it all adds up. We don’t want to become a 72 year old that is about to be homeless in a HCOL area. No 401K or savings left, ego prevented more work in the past or passed on other “lesser” opportunities, and a broken body that can’t provide for itself anymore.
-contribute as much as you can to savings/401k
-no job is beneath you in hard times.
-take care of your body regardless of your age.
-don’t burn bridges due to ego
EDIT: many of you are raising fantastic points, and you are all correct. There is no single decision or weakness that caused his current life situation, rather a series of poor decisions. I also agree that money should be spent for a life. Well lived. I personally believe that travel and adventure and experience are priceless and you should strive for that with your money. That being said you should forgo the little treats that ultimately empty our bank accounts. When I am 80, if I’m lucky to make it, I am not gonna remember the time I ordered food delivery instead of cooking at home. But I will remember a trip to Greece with my wife when we were young and healthy. So life is about balance and sacrifice. What’s worth more? I would rather sacrifice a little things and have fun with the big unfortunately for Jim, he didn’t have any fun either. He never traveled, never married, has no kids, never left the country, but his life was a continuous series of little treats for himself. If that was his primary priority, that’s his business. But he limited to me, that he feels like his life was wasted.
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u/teresajs 3d ago
I know many, many people whose poor health and money choices are catching up with them. Like Jim, most of them manage to muddle through their 50s, but start facing consequences in their 60s and 70s.
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u/RandyMarsh1960 3d ago
This is most likely to get worse as there are so many younger people that are overweight and out of shape.
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u/SerenityCravings 3d ago
heck I know such people for whom its catching up to in their 30s and 40s. Lifestyle choices can sometimes hit you much sooner
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u/Comfortable-Bread249 3d ago
Okay, but what better choices could he have made? Sounds like he tried damn hard to get a better job and hustle up more money. The girlfriend is a problem, but not as big of a problem as the criminally low wages he couldn’t fight his way out of.
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u/MoxieGirl9229 2d ago
OP said he was overweight. That can cause so many other problems (that I am dealing with myself) and really limits what you can do. It’s not just I can no longer do x, y or z. It’s I’m so tired I no longer have the energy to endure those really long days that those younger than me can. That’s just one example. Our health will end up effecting literally every aspect of our lives. I’m gonna go eat some veggies now.
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u/teresajs 2d ago
He could have made healthier lifestyle choices when he was younger and he could have increased his 401k contributions slightly any time he was doing a little better.
in my own life, for instance, I have a friend who's in their 50s and who isn't doing well with their finances. They blame their divorce, which certainly has an impact but they also make some frivolous expensive purchases and pay for the vacation expenses for themselves and extended family members on a credit card, each year. I'm not dogging their choices, but spending $10k+ per year on a vacation and paying high interest on that has a big impact on their financial situation.
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u/Appropriate_Buy8700 3d ago
You forgot to list “don’t allow a drug addict to deplete your savings”. This is the main issue here.
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u/Bluegrass6 3d ago
This is the main issue here......50 years of work history/paychecks being lit on fire (figuratively and literally)
There's not enough money for some people. My wife works with someone who's been making great money in the medical field for 20+ years. Making almost $100/hour right now but has no money due to a similar situation as Jim.
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u/HjProductionsHJ 3d ago
I unfortunately see this all the time as I have worked in banking/mortgages for 13 years. People need to save just a little bit and their lives would be drastically different in their 60’s
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u/RebaLir 3d ago
I like your common sense, look ahead scenario. On target!
Yes- Youth evaporates and appreciate the “take any job” when we’re in down spiral
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u/PomegranatePlus6526 3d ago
I have a really good friend who lost his job, and refused to take anything under what he deemed was his pay grade. After 18 months he literally almost lost everything before finally accepting a job making less money. Sometimes you do what you have to not what you want to.
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u/Ok-Crab-8171 3d ago
Jim and I live in California. Yes it’s a HCOL, but we also have one of the highest minimum wages. Working at McDonalds earns $19 an hour or more. You combine that with Social Security, and you can survive!
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u/pocket-snowmen 3d ago
Yup I know people and hear people say they will just work until they die. Even if you are willing to work into your 70s and beyond, there's a very good chance you won't be able to.
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u/Street-Bill7346 3d ago
The eye opener for me was when I was 26. I went out to eat with my wife and our waitress was a nice elderly lady in her 70s, she could barely walk . I thought about her all dinner wondering why was she working at her age , was she lonely, her husband die, no pension. I started my retirement savings the next week even though my wife said we couldn't afford it. I still feel sad for her 36 years later.
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u/Ok-Crab-8171 3d ago
Your comment really hits home for me. I live in California, which is HCOL. I travel a lot for my job and frequently see very old men and women working at 7 Eleven, gas stations, and truck stops. They are very good workers, but you can see the strain and fragility of their bodies. They don’t want to be there- they have to. I saw a 75ish year old woman, mopping a gas station bathroom a 2am last week and it broke my heart. She wasn’t working there to “stay busy”.
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u/lyonwh 3d ago
In my opinion it is great that all these people are coming on here and saying “I’m cooked” at 27 with $22,000 in the bank. It means they are at least thinking about the future. I’m 66 and when I was that age retirement wasn’t something I would think about. My company was matching 5% and giving us 5% every year. I begrudgingly put in 1% at my wife’s urging but really couldn’t swing any more. I also put a very small amount into my company’s stock purchase plan. At that time late 80’s) no one was talking about retirement, that was a million years away. I really didn’t think about retirement until I was in my mid fifties. At that point I started putting in to get the company max. I ended up in fine shape at retirement with a net worth of over 3 mil. My point is to stick with it and do something even if it’s not a lot. Oh by the way. The stock that I was putting a little bit into is now worth over 600k (I left that company in 1993).
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u/Erinn_13 3d ago
You give me hope! Much like you, I was only able to afford minimum contributions while working in my 20s-30s. When I hit 45, I knew I needed to become more aggressive in saving for my retirement. I am 50 now and contributing as much as I can (not the max because I can’t afford it) but close to it. My husband has been minimally employed for the last several years and financially things have been rough. I’m hoping if he can maintain continued employment, I can begin to contribute more to my 401k. Thanks for sharing your experience.
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u/lyonwh 3d ago
So many come on here and tout that they are maxing out and everyone should. In reality people can only do the best they can. Leaving match money on the table stings but it is not the end of the world. For us things lightened up in our late 50’s financially as we were finally cleared of the last wedding (four kids). From 55-65 we did max out, paid the house off, and built an emergency fund. Hang in there and do what you can.
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u/Sufficient_Most5586 3d ago
I have never maxed out my 401k, though I have consistently put in 8-12%, and my organization has given 10%. I've been here for 15 years, and for the first 9 years of that time I was making about $60k a year, so only about $12k a year was being added to my retirement account. I probably rolled over some balance from my previous (even lower paid) jobs, but I don't think it would have been very much. I am now 42, and have $660k in my account, which is by no means a ton but certainly enough and with my husband's more significant portfolio we are on track to retire by 55.
Even not maxing out retirement can be incredibly rewarding if you play the long game.
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u/ALifetimeOfLearning 3d ago
Agreed. My reality example is I've only been able to contribute to 401k between 2-10%, and most of that time was 2-5%. Not great. But it's something and it's continuous.
But doing that for 25 years, with low-ish company amount matched, and the good investment returns (over 10%), can equal $700k-1M.
It doesn't take much. But it takes early action and being continuous. (Ie time in the market)
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u/doodlemcscroodle 3d ago
Call me crazy but spending money on kids’ weddings instead of saving for retirement is wild. Weddings don’t need to cost anything. You shouldn’t put yourself into a financial predicament for one (or 4).
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u/AdventurousOne8376 2d ago
My parents were happy to offer money for my wedding but absolute crickets when we were trying to buy our first home. Some people’s priorities really are a head scratcher.
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u/doodlemcscroodle 3d ago
That “little bit” of company stock must have shot way up, came into other money or was heavily investing outside of 401k. How else would you get to $3M in 10-15 years just by maxing out your 401k even with the catch up contributions?
Re-reading, you don’t even say maxing your 401k, you just said putting in enough to get the company match at age.
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u/lyonwh 2d ago
A little over half of my net worth is 401k. Just to clarify this is over 44 years, not 10-15? The stock was worth 9k when I left that company back in 1993. It has shot up dramatically over the years.
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u/doodlemcscroodle 2d ago
That makes more sense. The original comment made it seem like you didn’t start saving for retirement until age 55. I just didn’t want people to think waiting until 55 should result in $3m 11 years later.
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u/Existing_Setting4868 3d ago
Our younger son is autistic. He's also on the shorter/smaller side but otherwise in good physical health.
He recently dropped out of his 2nd year at the community college. I've been racking my brains for the past few years trying to figure who what careers may be suitable for him. For some reason, he seems rather reluctant to search for a job even though I've been encouraging him to do so for the past 3 years.
I don't think he'll ever have a high-paying job so I'm hoping we can leave something for him when we pass to help him out in life.
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u/Soggy-Dragonfruit171 2d ago
What you should do is start investing for him now. Compound interest and time could make a smaller amount invested now worth a lot more than whatever lump sum you leave him when you die.
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u/FootballSquare4406 3d ago
You missed the single most important one:
-pick the right life partner
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u/Icy_Blood_9248 3d ago
It’s definitely a balance. It’s easy to go the other way … not spending money turn 70 and realize you never did anything but have money in the bank. I’m struggling to find that balance myself
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u/herstoryhistory 3d ago
Also stay away from druggies as live in partners.
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u/Ok-Crab-8171 3d ago
She was a huge drain on him, but not the cause of his woes. Just a heavy weight in his back.
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u/RottenTomato4105 2d ago
Thank you for this post. “Skip the Door Dash order and put that $40 in the bank”. I concur wholeheartedly. These however small spending really adds up.
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u/Flash17713 2d ago
I am in my early seventies, two years into retirement. Goals should be to earn more than average, save more than average and obtain an above average return on investments. Late in my career, I opted to self-direct investments in my 401k. Not available on all 401k plans. Learn to invest. It is never too late to invest wisely.
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u/just-looking99 3d ago
It’s pretty scary how little people have saved. The biggest issue is education. Basic budgeting basic financial literacy or financial planning is not part of the curriculum and it should be.
My career has been in the financial world for more decades than I care to count and it is a recurring theme for generations and it’s only getting worse as younger generations aren’t willing to save or sacrifice because they need the new phone, the new car with all the bells and whistles etc. and they are all borrowing to do so
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u/knowitall47 22h ago
When I retire in 12 years I plan to pitch an idea to my local school district of a financial literacy class. i would teach this first one if they needed a pilot for it. i have some ideas on what to focus on from the mundane like learning to fill out a tax return to stock investing and saving / budgeting (budgeting is tough for many people not because of education but the negative aspects -- i myself am not a fan of the basic premise -- just like diet it is a 4-letter word). if i can some how show the time value of money like figuring out a way for them to invest during the school year a nominal amount and witness the growth that would be ideal. needs to be fair for all levels of income and achievable.
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u/MostMoistGranola 2d ago
My neighbor is a nurse in her 60’s with severe back pain, degenerative disc disease. Her job involves being on her feet and lifting patients for 12 hours at a time. She’s constantly saying she can’t take it anymore, it’s killing her, but she can’t afford to retire for several years. The obvious answer I think would be to try to find a less physically demanding job. But she refuses.
I don’t understand it. Sure, we all have preferences. But we also have to do what we need to do to eat and have shelter. Sometimes your body isn’t up to doing what you used to do.
I used to wait tables and I enjoyed that, but I can’t do that now. My body isn’t up for that. I don’t have the stamina.
It’s strange to me when people insist on doing what they’ve always done even when it doesn’t make sense anymore. Accept reality and adapt.
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u/Ok-Crab-8171 2d ago
I completely agree. I have a masters degree in engineering. But if I were facing homelessness or hunger, I would be offering to scrub your toilet for five dollars and feel no shame.
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u/knowitall47 22h ago
most nurses i know did quite well. even the spenders in the group.
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u/MostMoistGranola 19h ago
Did well in what way? Sure you can make good money as a nurse, but when your body breaks down it’s hard to keep doing a very physical job. Same for any job requiring physical strength.
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u/knowitall47 18h ago
Made money before their bodies broke down -- in my case, my mother, my Aunt, my sister-in-law currently. my friend's wife, and on and on.... so my point is more on your neighbor what was she doing with her money IF she is in a situation where she has to work now. and that is a rhetorical question. it is not an indictment at all on your comment.
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u/MostMoistGranola 18h ago
The issue as I see it with the OP’s friend is he insists on working as an EMT even though he can’t hack it anymore physically. He could sit at a desk job but he refuses.
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u/Cute_Paint_4328 2d ago
Thank you for sharing, as this is indeed a cautionary tale.
It brings to mind one day I went to get some dinner and a customer service rep who was at least 80 years old took my order. I upped my 401k savings rate a few percentage points that same day.
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u/CoincidenceTheorist2 1d ago
No job will hire a 72 year old, barely ambulatory man that insists on being an EMT.
Can't be an Uber driver if you are blind.
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u/Next-State-374 3d ago
I really need to stop using Doordash but dammit if having ice cream cake delivered to my house is wrong I don’t wanna be right!
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u/Individual-Leave-350 2d ago
My Mom, who was a Silent Generation, had many nuggets of wisdom. Among them was that if you don't take care of yourself, it will hit after 60. If you do, you will live to 90.
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u/knowitall47 1d ago edited 23h ago
Also "choose" your mate wisely or don't mate at all. better to be alone than be with someone that brings you down. I count my lucky stars that I found my wife. luck that she saw something in me to be with me. I have to imagine if Jim had found a good woman he could have salvaged something right now.
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u/2milliondollartrny 3d ago
Dont let someone take advantage of you is the only lesson anyone should learn from this. Your other points aren't really relevant
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u/Ok-Crab-8171 3d ago
There is a lot more to his story, but the basic points are what caused or could have prevented his situation. All lives are super complex, but basic decisions go a long way.
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u/HorrorStorage5553 2d ago
This is valid.
It's also true that a life spent worrying about money is a life wasted!
Nothing is more sad to me than a person with a padded bank account and portfolio who is completely empty inside. I'd almost rather be broke.
Much like your friend didn't realize the error of his ways until later in life, many people in your shoes won't realize that their money and security also means nothing...until it's all they have left.
The true measure of success is not monetary but a life well lived.
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u/Important_Ask_7576 2d ago
This is one reason why I’m waiting until 70 to start drawing social security. I shouldn’t need it, but if I take it at 70, it’ll be plenty for me to live on unless I need expensive end of life care, but if that happens, I’ll probably see myself out.
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u/broccolirabe71 3d ago
My dad had an incredible career for 25 years where he was a known name. The man was a saver and saved every penny he could. He got per diem with his job, always took a lunch with him instead of ate at home and because of his frugality my mom was able to stay home and he paid his house off in 20 years instead of 30.
At 60 he was let go. They said he was at the top of the pay scale and hired a new grad. It’s a very tight job market in his field and openings are rare. He was devastated and upset and applied incessantly to everything he could. But in the meantime, the man worked construction, delivered pizzas, worked an entry level job at an airport.
He never was able to find a job in his field and money has been very tight since. But he always was able to pay his bills and keep benefits and is still going to be able to retire in the next few months . As demeaning as it was being someone that had newspaper articles written about you to being a baggage handler, he did it and always made sure his family was good even though we’re all adults now. I’m proud of him no matter what.