Some medical professionals will have to retire poor. Whether due to financial catastrophe or poor planning, nobody is exempt from this risk. There are ways to make a poor retirement more pleasant.
In this post I’ll show how a 70-year-old doctor can manage to have a decent monthly income with a minimal overhead. There are many ways to retire poor and still manage a quality lifestyle.
Retiring in Poverty
Retiring poor means:
- you have less than $50,000 to your name
- you are in your late 60’s
- you cannot work a full-time job
- you don’t have much in way of social support
Trying to imagine the 70-year-old Dr. Mo without much money and forced to retire seems a little overwhelming but that’s why I wrote this post. Both my parents ended up having to retire poor so it’s not as foreign to me.
In order to retire poor without living a miserable life I would suggest the following 3 strategies which I’ll break down in more detail:
- Minimize expenses
- Maximize monthly income
- Optimize resources
1. Minimize Expenses
The geriatric Dr. Mo, with only $50,000 to his name, can’t afford to live a lavish lifestyle. The chance of getting hired as a physician are next to zero so he has to cut his expenses as much as possible.
Consider living with another elderly person, maybe someone who could benefit from your assistance. They might be willing to pay you a premium on top of the rent. Or else, just rent out a spare room in your place.
Alternatively, move to another city, another state, or even another country if those are viable options. Senior housing can be had for as little as $600/month in the US. Or get the same apartment in Cebu, Philippines for $300/month.
Beans, rice, and cheap vegetables. That should provide adequate calories and cost very little. A friend in Portland lives on $180/month of groceries and she isn’t poor.
Public transportation passes for the elderly are super cheap and sometimes free. But there is no reason that a 70-year-old can’t get around on a bicycle.
Living in the right city, of course, will make all the difference. Compare Los Angeles to Portland. Phoenix to Denver. Barcelona to New York.
Medicare. Done. I don’t understand why economists and financial advisors make such a big deal about the costs of healthcare in the elderly. Find a good doctor and manage your health yourself.
2. Maximize Monthly Income
I’ll assume that 70-year-old Dr. Mo is too frail to earn a living as a physician. Maybe he lost his license or just isn’t mentally up to the task.
An elderly individual can always teach. Whether as an adjunct at a college or as a private tutor in English, Math, Biology, Chemistry, etc.
There are options to teach online or in person. The income won’t be impressive but for 15 hours a week, expect an income of around $1,500 per month. Mostly cash. Which your geri ass will forget to report to the IRS.
Rent out a spare room.
If you live in a very desirable, touristy neighborhood then stay with a friend or family member during the peak season and rent your place out short-term.
Take in an exchange student once a year.
You an also find living arrangement where you live in a large house for free and in return spend your time taking care of the place. This is great for home owners who travel all the time or own a vacation home.
Finally, you can be an AirBnb host. These jobs are becoming more and more popular. If you have a neighbor who is renting out their place while they are away, you can manage it for them.
When you’re 70 and hopefully looking less intimidating, it might not be too hard to find a babysitting or pet sitting gig.
Delay Social Security
Yea, this one is obvious. If you have SS coming in, you can delay it if the math makes sense.
But I would only do this if you have high lifestyle expenses. If you’ve worked even 10 years, your social security income should be in the $1,000 range a month – delaying it might get you another $150 a month.
If you’ve worked longer, it’s possible that you’re getting ~$2,500 a month.
I would take that $50,000 which you have saved up and purchase an immediate annuity with it.
A lifetime annuity – a fixed income paid to you every month until you die – would be around $313 in return for that $50,000. It might be much higher if you can convince the insurance company that your life expectancy is lower.
You might also do well just taking a 10-year period payment. You will get $462 a month for 10 years and after that, no more payments.
3. Optimize Resources
In the US there are a lot of public assistance programs aimed at the elderly. From cheap housing to food delivery to discounted medication. You can get discounts on utilities, cell phones, and even free transportation.
Start with https://www.benefitscheckup.org. Then contract local groups and churches and community outreach centers.
Outside of public programs, there are private ones which may be aimed at certain religious or minority groups.
Many public garden or farms have food programs which will provide food for free to the elderly. Examples are http://joyskitchen.org – this is an amazing organizing to donate money to, by the way.
Adding it All Up
Senior housing rent – $650 a month.
Discounted utilities – $30/month.
Free/cheap groceries – $50/month.
Health/dental expenses – $25/month.
Immediately lifetime annuity income – $320/month.
Social security income – $1,350/month.
Pet sitting and managing a friend’s AirBnb income – $600/month.