Theresa Edwards thought these would be the golden years of her life, but instead she wakes up at the crack of dawn, crisscrosses Los Angeles by bus, and ends her long day at home with her final patient, Edwards’ husband of 55 years, who is recovering from a serious car accident.
Edwards began working as a caregiver at age 18 when her grandmother suffered from Alzheimer’s. Now 74, she finds herself tiring more easily than she used to. She has to stop and catch her breath every now and then, but taking a break isn’t an option.
Every dollar counts. Edwards doesn’t buy new clothes or go to the nail salon. She doesn’t have a credit card and keeps all her money that she doesn’t spend on bills in a savings account.
Still, she barely makes enough each month to cover groceries, utilities and the $1,500 rent for the two-bedroom apartment she shares with her four grandchildren and her 9-year-old German shepherd, Duchess.
“I owe it to Jesus and God that I am so strong at this age,” she says. “Sometimes I want to quit my job, but with life like this, I don’t know if I can do that.”
Retirement is becoming an increasingly difficult luxury for many American workers: As housing and health care costs rise and the pensions that supported previous generations disappear, millions of older people can’t afford to stop working.
Social Security pays less than half the average wage, and while benefits could be cut, it doesn’t cover nearly enough, leaving many older Americans with less than they need in their savings or 401(k) accounts.
In fact, only about half of American households Have a retirement accountAccording to the Federal Survey of Consumer Finances.
Many older Americans can’t stop working after retirement
For decades, the combination of pensions (defined benefit pensions) and Social Security has made it possible for many people to enjoy a dignified retirement.
Not anymore: Only 10% of retired Americans between the ages of 62 and 70 are financially secure, according to research by Teresa Ghilarducci, a labor economist and professor at the New School for Social Research.
According to data Ghilarducci analyzed from the University of Michigan Health and Retirement Study, most older Americans either retire with a lower standard of living than they had when they were working, or can’t afford to stop working.
“One in two people of retirement age is not able to make ends meet and one in four older people live in poverty by international standards,” Ghilarducci said.
“America’s retirement savings crisis is no longer looming, it’s here and now,” the opening sentence of a recent report reads. report From the National Institute for Retirement Security.
“We’re nowhere near where we need to be,” said Dan Doonan, executive director of the National Institute for Retirement Security and one of the report’s authors.
“I never imagined it would be like this.”
Older Americans like Robin DeLucia are facing a frightening prospect that was once unthinkable: falling into poverty for the first time in their lives.
DeLucia, who had been working since she was 14, retired on her 70th birthday. But she said she couldn’t stay retired.
She took a two-month road trip to New York with her 10-year-old dog, Midnight, before returning to her home in Sarasota, Florida, to look for work.
“It’s the only way I can survive,” she said. “Living on Social Security alone is a total joke now, especially in Florida.”
DeLucia lived comfortably for most of her life, working as a real estate agent, loan officer and mortgage processor and later running a marketing company. Then her health deteriorated and she was no longer able to work full time. She has had 15 surgeries over the past 20 years.
For a while, DeLucia got by on credit cards, but she couldn’t keep up with the payments and was forced to file for bankruptcy. She’s in debt because her car is valued at $18,000, a quarter of its value.
She once had a home, now she lives temporarily in a “ladies shed” behind her daughter’s house.
DeLucia wants to start a Facebook page for people over 62 and a housing brokerage nonprofit that will connect older Americans who need help paying their rent or mortgage with people who need a place to live.
“I never imagined I’d be in this situation,” she said.
“Work, retire, repeat”
Ghilarducci, “Work, Retire, and Repeat: Retirement Uncertainty in the New Economy” They blame the retirement savings crisis on the switch to 401(k) plans.
She said these “self-funded retirement plans” are increasingly isolating low- and middle-income Americans and forcing them to work into their 70s.
Some influential people are beginning to agree with her.
Larry Fink, chairman and CEO of BlackRock, one of the world’s largest asset managers, believes the “you fix it yourself” approach is driving Americans to “From financial certainty to financial uncertainty”
He points out that four in 10 Americans don’t have $400 in emergency savings to cover a car repair or a trip to the emergency room, let alone savings for retirement.
“Perhaps once every decade, America faces a problem so grave and urgent that government and corporate leaders stop business as usual,” he wrote in March. “America needs a coordinated, sophisticated effort to ensure that future generations can live out the rest of their lives with dignity.”
The retirement crisis will be worse for millennials and Gen Z
Without intervention, the retirement savings crisis will only get worse as more Americans reach retirement age, said Kevin Prindiville, executive director of the nonprofit group Justice on Aging.
“If we don’t act, future generations will face even tougher retirement outcomes,” Prindiville said.
Young people are already feeling the pinch, especially those with precarious employment and unstable incomes.
Angel Herion, 23, said she wanted to start saving for retirement.
A self-described go-getter, Herion began working as a teenager. After graduating from high school, she dreamed of becoming a doctor and became a certified nursing assistant. But when her elderly adoptive mother fell ill, Herion became her caregiver.
When her mother, her only family member, died after a long illness, Herion suddenly found herself alone. With her nursing qualifications lapsed and no savings, she worked her way up the ranks in fast food restaurants and retail stores.
She was thrilled to accept a job as an assistant manager at Macy’s on Long Island in 2022. She loved her team and the customers, and it was also the first job she’d ever had that offered a 401(k) plan.
Then she got sick. At age 22, Herion was diagnosed with a debilitating, painful autoimmune disease that made it difficult for her to stand up and move around.
Now she lives on welfare, is looking for work that can be done from home, spends what money she has on medicine, and saves for retirement, a dream she has long put off.
“I wish there were more retirement options,” she says. “Most of the time, we’re barely making ends meet and can’t even afford retirement.”
3 easy tips to help you save for retirement
- Save early and consistentlySave 5% of your take-home pay in your 20s and 30s, then 10% for the rest of your working life. “That way, you can supplement Social Security and maintain your standard of living if you don’t dip your toe in it,” says Ghilardoci. “The earlier you start, the better, because of the power of compound interest.”
- Invest Wisely“Be a smart investor,” she says: Don’t take stock advice from friends or family or hire an expensive fund manager, but maintain a balanced portfolio in a retirement savings account with a firm like Vanguard.
- be careful“We forget how important the federal government is to our financial future. For most people, the bottom 90 percent, the federal government is the most important financial entity,” Ghilarducci said. “So we really need to pay attention to how politicians are treating Social Security, Medicare, Medicaid.”
