Financial Survival of Low-Income Retirees
Watch these six videos and walk in the shoes of low-income older Americans. It’s an arduous journey.
Social Security is the primary or only source of income for the retirees who agreed to be interviewed for the videos. Since their income doesn’t cover their expenses, they live with family, frequent the Salvation Army, and continually stress about money.
“You’re lucky if you come out even or a little behind” at the end of the month, said Howard Sockel. The 81-year-old resident of Skokie, Illinois, supports two sons – one with autism and one unemployed – on his Social Security, a small Post Office pension, and credit cards.
The older workers who were interviewed are on the same road to a difficult retirement. Cathy Wydra, who was 64 when the videos were made, shares the expense of a two-bedroom apartment in a Chicago suburb with her daughter and grandson and sleeps on an inflatable mattress.
“It’s a little scary. I think, am I going to be able to retire in two years?” she says.
One out of three older people can’t cover their costs comfortably, often because they lack savings, said Sarah Parker with the Financial Health Network, which produced the videos in conjunction with AARP Foundation and Chase. “You often have to rely on debt, and that’s a very precarious financial situation to be in,” she said.
The video topics are: “When Fixed Incomes Fall Short,” “All in the Family,” “The Caregiver Conundrum,” “A Shock to the System,” “When Retirement Won’t Work,” and “Good Advice Never Gets Old.”
Some of the retirees admitted to making strategic mistakes around their retirement finances. Many other people have made these same mistakes, but they are catastrophic for people who were already on shaky ground. Verner Reid, a former Chicago teacher, was forced to retire when she became ill. Rather than a teacher’s pension, she took a lump sum and is now short on funds – “the mistake of my life.”
She substitute teaches even though she no longer enjoys teaching. “I’m tired,” she said. “But I need the money.”
Her advice to people who are still working: save money.
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Those catastrophic mistakes can have a long term impact; having no other savings is an ongoing problem nationwide. We see the disastrous results of having no savings during this time of coronavirus. And sometimes families simply have to pull together for their parents‘ sake.The only silver lining (if there is one), is that with such low income only from Social Security, they won’t be paying any federal income taxes.
Some people understand and practice deferred gratification. Others, not so much.