This guest post is by reader Mike in New Hampshire. Mike wrote an Ask the Readers article last year, looking for ideas to help his dad get set for retirement. He wrote to us recently and asked if he could update their story. We were only too glad to provide a forum for them.
It has been a little over a year since I wrote in looking for suggestions on how I could help my father retire. I want to thank everyone so much for the comments, ideas, and support — they came at a time when I really needed it. In the end the solutions came not from me but from the relationships he had formed and the sacrifices he had made over the years. Everyone loves a story with a happy ending, right? Let's get to it.
I know the community gets annoyed when specifics are not available so I will try to be as detailed as possible on the financials. Last May when I wrote the initial piece my father was going to turn 65 in December and worked in a career that he could no longer stand with no retirement savings. He made about $45K per year, had a mortgage of around $400-500/month, and had about $20K in cash savings that was offset by nearly the same amount in credit card and home equity balances.
He also had about $12K in college loans that he continues to pay as part of a promise that if I did well, he would help with the costs. (Funny side note: a few people commented that I should just pay these off without telling him. He would have been insanely ticked that I messed with his second-favorite tax deduction!) At that point I was considering multiple options and was even entertaining the idea of finishing my basement so he could move in and utilize his house as an income property. He was miserable and I was getting there as I ran out of ideas to help the man who had given up so much for me.
Over the summer a couple of really important things happened. An old friend who runs an auto repair shop offered to give him a part-time job working in the office for about $300 per week net income. This was perfect for three reasons: the work was right in his wheelhouse without being stressful, it was only three days a week with plenty of flexibility, and, in addition to needing money, he needed something to do since drinking beer and watching TV is not a legitimate hobby.
Will his part-time job affect Social Security?
I went with him to his meeting at the Social Security Administration office and we learned that even working part time he could still get his full benefit (93 percent based on retiring at 65), which came to a little less than $1,850 per month. This part was actually very surprising in terms of how much he could earn and still be able to collect his full benefit — it was a LOT higher than we expected. Between the $1,850 from SS and the $1,200 from his part-time job, he suddenly had replaced his income while being able to work three days a week in a stress-free environment. Not a dream retirement on an island, but for someone who never really planned or saved, it's a great deal.
Getting medical care via the VA
The only thing left to worry about was the elephant in the room: health benefits. My father had proudly served in the Army and was stationed in Germany for several years in the '70s, but he had never set foot in an actual war zone. As a result, he was told repeatedly that he did not qualify for full VA health benefits. Through a friend he learned of a gentleman who specialized in representing veterans to help with getting their approval, free of charge. Not sure how he did it or why a veteran would even need someone to fight for this cause but, politics aside, my father eventually was approved for his full benefit.
I had heard some interesting stories about VA hospitals, but from my perspective he is getting better-quality care there than he was before. He came back from his initial physical asking me about a new word he learned — obesity! It's not funny, but it was a little comical after years of his regular physician just prescribing pills and telling him to keep doing what he was doing, much to my dismay.
The happy beginning
He didn't always make the right decisions and I have chosen a much different path for myself, but in the end it worked out OK. This was mainly due to him having pretty low expenses in the needs department and realizing that it was time to tame his wants/waste, utilizing the resources/network available to him, and not giving up or easily accepting no as an answer.
On the 4th of July I was able to drink a beer and watch some World Cup with my pops. The World Cup is a fairly rare occurrence as it comes around only once every four years. Even rarer than that, it was Dad's first summer holiday off in nearly 40 years. He was happy, I was happy, and we even had some new things to talk about. The man who once said he would just work until he died has suddenly become a big fan of budgeting, paying off debt, and managing to build his savings.