What happens to people without any retirement savings?

Well, if you worked in the United States you have social security, and medicare and medicaid in most cases as well. So you have a small amount of income to spend every month to cover your most basic living expenses, as well as your basic medical expenses. At least, that's the idea.

In reality, it probably isn't anywhere near enough money for most to live comfortably. Also, there is a real fear that the US will have to inflate itself out of its debt to some extent in the future. This theory implies that the money retired individuals are receiving down the road will buy significantly less in the future than it does now.

If you have the ability to put money away into an IRA or 401K early in your life, it will be greatly beneficial to do so. However, that is another issue I won't begin to discuss fully here.

Edit since your question was restated after I typed my initial response, the final answer is: You will receive some assistance from Social Security, Medicare, and Medicaid. You will most likely need to either continue working, draw on savings such as an IRA or 401k, or will need assistance from others. If none of those are options, you would most likely end up living in poverty or worse.

It think it is a good question and you seemed troubled by this and this person's choices in life. And that is the rub, they are choices. They know how to make them, they know the consequences, and they know how to work around them. Its a skill you probably don't have (and don't want to have).

In the end they will survive. If you go to a fast food store in a popular retirement location you will see plenty of elderly people working. They might live in low income housing, receive some financial assistance, and utilize other charities such a food banks. They might depend on family and friends. There is also the ugly, it is not a fairy tale that some supplement their diets with pet food.

There is of course social security. The amount is very low for most workers, but the amount is almost inconsequential. They would spend it all anyway and still be short despite the predictability of the income and a time frame with predictable expenses. Budgeting is a skill.

So I have a friend that deals with this himself, and is helping an elder relation. He and his wife provide some help, but when it started there was a endless stream of requests. His policy now is: No more help unless he works out a budget with the person requesting help.

I've used his ideas myself, and by using this it becomes clear on who is in actual need and who is just looking for the next handout. You can feel good about yourself for helping an actual needy person or guiltless say no.

There are a host of programs in the US to help low/no-income seniors:

• Healthcare through Medicare and/or Medicaid
• Some income from Supplemental Security Income / Social Security
• Money for food through SNAP (food stamps)
• Housing subsidy via HUD Section 8.

Many states discount property taxes for the elderly as well. Not a dream retirement, but plenty of people are provided for without having prepared for retirement whether due to poor decisions or unfortunate circumstances.

Social security was created with just such people in mind. It's a meager living, but it is an income stream that can be supplemented by Walmart greeter income. I probably isn't so dire that it leads to homelessness, but it might mean not having some of the other comforts that we take for granted.