Edwards began caring for others at 18 when her grandmother had Alzheimer’s disease (The retirement savings problem). Now at 74, she gets tired more easily and sometimes needs to rest, but she can’t afford to take breaks. Theresa Edwards thought her later years would be relaxing. Instead, she wakes up early every day to travel around Los Angeles by bus to work as a caregiver. After a long day, she comes home to care for her last patient: her husband of 55 years, who is recovering from a serious car accident.
Making Dollar Count
Every dollar counts for Edwards. She doesn’t buy new clothes or get her nails done, has no credit cards, and saves every penny she doesn’t spend on bills. Despite this, she barely makes enough each month to pay for groceries, utilities, and the $1,500 rent for her two-bedroom apartment, where she lives with her four grandchildren and 9-year-old German shepherd, Duchess.
“I thank Jesus and God for my strength at this age,” she said. “Sometimes I wish I could stop working, but with the way things are, I don’t think I can.”
Retirement is Hard/The retirement savings problem
Retirement is becoming a luxury many American workers can’t afford. With rising housing and medical costs and without pensions, millions of older Americans can’t stop working. Social Security doesn’t cover enough, and many older Americans have too little in savings. Only about half of American households have retirement accounts, according to a federal survey.
Working Beyond Retirement Age
Many older Americans can’t afford to retire at the usual age. For decades, pensions and Social Security allowed for a decent retirement, but not anymore. Research from labor economist Teresa Ghilarducci shows that only 10% of Americans between 62 and 70 who are retired are financially stable.
Most older Americans either live below their pre-retirement standard of living or can’t afford to stop working, according to Ghilarducci’s analysis. “One in 2 people reaching retirement won’t have enough, and 1 in 4 seniors are in poverty by international standards,” Ghilarducci said.
Financial Uncertainty
“The retirement savings crisis in the United States is no longer looming: it is here now,” says a recent report from the National Institute on Retirement Security.
“We’re far from where we need to be,” said Dan Doonan, executive director of the National Institute on Retirement Security and one of the report’s authors.
Older Americans like Robin Delucia face the prospect of being poor for the first time in their lives. Delucia, who has been working since she was 14, retired on her 70th birthday but couldn’t stay retired. After a two-month car-camping trip to New York with her 10-year-old dog, Midnight, she returned to Sarasota, Florida, to look for work.
“It’s the only way I can afford to keep living,” she said. “Living on Social Security alone nowadays is a joke, especially in Florida.” For much of her life, Delucia lived comfortably, working in real estate and marketing, but deteriorating health made full-time work impossible. Over the past 20 years, she has had 15 surgeries.
For a while, Delucia used credit cards until she couldn’t keep up with payments and had to file for bankruptcy. She owes $18,000 on a car worth much less. She used to own a home but now lives temporarily in a “she-shed” behind her daughter’s house.
Delucia wants to start a Facebook page and a nonprofit to help older Americans find affordable housing. “I never imagined I would be in this situation,” she said.
Ghilarducci blames the retirement savings crisis on the switch to 401(k)s. These “do-it-yourself pensions” have left many low- and middle-income Americans working into their 70s. Larry Fink, CEO of BlackRock, agrees that the “you’re on your own” approach has created financial uncertainty. He notes that 4 in 10 Americans don’t have $400 in emergency savings.“Maybe once a decade, the U.S. faces a problem so big that government and corporate leaders stop business as usual,” he wrote. “America needs a high-level effort to ensure future generations can live out their final years with dignity.”
Without intervention, the retirement savings crisis will worsen as more Americans reach retirement age, said Kevin Prindiville, executive director of the nonprofit Justice in Aging. “If we don’t take action, future generations will face an even more challenging retirement landscape.”
Younger people, especially those with unstable jobs, are already worried. Angel Herion, 23, wanted to start saving for retirement. A go-getter, Herion began working as a teenager and dreamed of a career in medicine. But when her adoptive mother fell ill, she became her caregiver. After her mother’s death, Herion, with no savings, worked in fast food and retail.
Herion was thrilled to get a job as an assistant manager at Macy’s, her first job with a 401(k). Then, at 22, she was diagnosed with a painful autoimmune disorder. Now, she lives on public assistance and searches for work-from-home jobs. What little money she has goes to medication. Saving for retirement is a dream deferred.
“I wish there were more retirement options,” she said. “Often, you can’t even afford to save for retirement because you’re just barely getting by.”
Simple Tips to Save for Retirement
Save Early and Consistently: Save 5% of your take-home pay in your 20s and 30s and 10% for the rest of your working life. This can supplement Social Security and maintain your standard of living. The earlier you start, the better due to compound interest.
Invest Wisely: Be a savvy investor. Avoid stock tips from friends and family or pricey fund managers. Keep a balanced portfolio in a retirement savings account with a reliable company.
Pay Attention: The federal government plays a crucial role in your financial future. Pay attention to politicians’ stances on Social Security, Medicare, and Medicaid.
Special thanks for the info: USA Today
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