Comments on: Retirement Planning for a Low-Income Career

By: Shevy

Shevy — Sun, 27 Dec 2009 18:03:46 +0000

@deRuiter
“Social work sounds like it’s sedentary.”

*Sounds like* you have no idea what a Social Worker may be doing. My mother was a Social Worker. She drove hundreds of miles in rural areas interviewing and doing placements for adoptions. She helped teach childbirth classes for single mothers. She coached the aforementioned 14 and 15 year olds through labour when their own parents wouldn’t. She investigated child abuse & neglect, which is very emotional and stressful. At times during her career she supervised other social workers in several different towns, which also required driving long distances through mountainous regions in winter. I’m sure that after trying to cover her huge caseload and then writing up all her notes at night she would have *loved* to go out and waitress for minimum wage or walk dogs! (shakes head)

By: deRuiter

deRuiter — Sun, 27 Dec 2009 13:22:18 +0000

There’s no reason a social worker can’t get a part time job a few nights a week or weekends and earn extra money. Dump all you’re allowed into a ROTH, open (in the ROTH) an account at a discount broker like TDAMeritrade, and buy some stock with part of the money every year and perhaps put a portion in a CD if you’ve ultra conservative.) IMPORTANT ALL YOUR STOCKS BE SET UP AS DRIPS: divident reinvestment program, so you get a little more stock without paying a commission every month or three months, the stocks grow! Let’s not assume that every low wage worker only has to work 40 hours a week. Get a part time job, increase your income. Social work sounds like it’s sedentary. A part time job a few nights a week waitressing, delivering pizzas, coaching at a gym, or dog walking or baby sitting would get the person free exercise plus extra cash. Where is it written you only work 40 hours a week?

By: Bill

Bill — Sun, 27 Dec 2009 12:29:01 +0000

The message lately is that you need to work for little money to be happy, I make 120k and love my job, never wanted to do anything else since I was 12. I doubt I could do anything else well.

By: Debbie M

Debbie M — Sun, 27 Dec 2009 02:13:33 +0000

One advantage social workers have is that they can easily remember what’s important. As a social work friend of mine once said about all our computer software friends–they don’t even know what an emergency is. A release deadline is just not the same kind of emergency as a guy standing on a window ledge.

Also, social workers tend to work so many hours that they don’t have a lot of extra time to hang around in stores buying things.

However, social work is not low stress–there are too many people who need help and not enough people to help them. Social workers tend to burn out, too, because some people’s problems are just so big.

One important thing for social workers to do is to take care of their own health. I know of social workers who work 12-hour days, have no time for friends, and even have trouble finding time for lunch or to use the restroom.

By: Robin Crickman

Robin Crickman — Sun, 27 Dec 2009 02:10:45 +0000

The one big problem of choosing a low-income life
is that health support is very expensive and it is
unlikely that low-income workers can afford to save
enough to purchase such care or even the disability
or nursing home insurance that would supply it.
That leaves low-income people the choice of doing
without proper care in old age or giving up all
their (and perhaps their spouse’s) assets to qualify for welfare. Medicare pays only for a
fairly limited amount of nursing home care and
a minimal amount of home health assistance.

By: Noadi

Noadi — Sat, 26 Dec 2009 21:08:36 +0000

I’ve accepted that my choice to run my own little business is not going to make me rich. I’m okay with that, I’d rather be poorer and happy than make more and hate working for someone else. I’m only 27 so retirement sounds very far away but I know I have to get working on it. I plan to open an IRA soon, I’m still investigating which kind I want to open.

It’s a bit hard trying to focus on these things at my age when none of my friends are, they either don’t care yet or they have 401ks through their job and don’t need to think about it.

By: Ariel

Ariel — Sat, 26 Dec 2009 19:01:14 +0000

As a member of the LDS church, I can see where missionaries would be very uncomfortable accepting money. It isn’t just out of pride; there are a lot of social/cultural/psychological barriers to taking cash in that sort of situation. Cookies, though? There are few social barriers to taking cookies, especially if you offer to let them come in for a moment to eat. Just be clear that you aren’t interested in their message, or they might get the wrong idea. If they still refuse, that’s pride. My brother is a full-time missionary and it warms my heart to know that he might run into friendly strangers like you.

Also, in the financial independence paragraph, I think you meant “dependence” to be “independence?” Otherwise, great post. People need to understand the implications for themselves and their families before they choose a “noble” career like social work, where the good feelings comprise most of the compensation.

By: karyn

karyn — Sat, 26 Dec 2009 18:09:54 +0000

Another thing to consider is how these jobs affect your child(ren). My husband works for the school system and I’m at home. The benefits are that his job is secure (hopefully), his schedule is regular, and the job is relatively low stress. However, he takes a lower income which means less money for extra activities and for college.

By: Des

Des — Sat, 26 Dec 2009 17:12:03 +0000

One thing you don’t mention, but that is a great advantage to people in this situation: they can likely work longer. Though not all low income earners like their jobs, if one has chosen this path deliberately, it is likely they chose it because it is personally fulfilling.

For me, I chose a job I dislike but that pays well and it’s 55 or bust! There’s no way I could do what I do into my 70s, that would just be too depressing. But if someone loves what they do, and knows they’re contributing to a greater cause (whether low-paid or not) they may not want out once they reach retirement age. Retirement may just be a backup for when they are no longer *able* to do the job they love so much.

Those extra years of compounding are a HUGE advantage and can outweigh much of the disadvantage of a low income.

By: George

George — Sat, 26 Dec 2009 15:40:28 +0000

If you have a low income, then odds are that a regular IRA is actually more tax efficient than a Roth. Mainly because one’s taxable income after retirement is likely to be less than during employment.

By: John DeFlumeri Jr

John DeFlumeri Jr — Sat, 26 Dec 2009 15:06:15 +0000

They may be trading a high income for a nice pension plan. And like you said, they learned to live frugally, and save as much as they can for the dream of a secure retirement lifestyle.

John DeFlumeri Jr