I am well aware of compounded interests. And, once again, it may benefit those who are able to invest large amount of money (i.e., interest rates go up fairly signicantly if you can deposit $100,000 instead of $3,000!).
However, think about what you are saying: You are now 65 years old, you are no longer employable (probably even true at a younger age, but let's say 65) and you have NO INCOME at all, but you have $80,000 in the bank, your life time savings.
You should expect to live another 20, maybe even 25 years. This means, you would be able to withdraw an average of about $3,000 a year. That's it.
You MIGHT be able to make it. . . if you own your home outright, if that home doesn't require maintenance, if you don't have utility bills, if you don't have to pay for your own insurance. . .however, medicare no longer exists. Instead, you receive $8,000 from the government, and you BEG a private, for profit insurance to insure you. Your medication are no longer covered (no more medicare part D), and they cost you about $150 per month (you're all together pretty healthy, so you are not spending the $500 that many elderly spent on medication . . .if they choose not to take medicare part D).
That leaves you with about $100.00 per month for food, transportation and anything else you may want.
However, you get sick, and your insurance (that you manage to find and who would accept your $8,000 a month voucher from the government) still requires a co-payment of only 10%. Unfortunately, you have to stay in the hospital for 2 weeks, and get an MRI, and surgery, and your co-payment comes to $2,000 (very low estimate!). You must now take that out of your remaining $77,000. . . .This means, you plan on dying one year earlier, or you cut down on your budget, taking out only $2,700 a year!
Yes, the remaining money in the bank still draws interest. . .not enough to compensate for the cost of living inflation though.
Do you think my picture is too bleak?
Think about it. And tell me how long that $80,000 will last in your opinion.