Retirement Realities for Older Workers in America
St. Petersburg, Florida — Larry Gesick, 77, an electrician, left home at 5:30 a.m. to work part-time unloading goods at a local supermarket in St. Petersburg, Florida, earning $14.75 an hour. This was certainly not part of his retirement plan. His wife, Joyce, 66, is getting ready for the workday as a full-time legal administrator, earning $14 an hour. “It’s not really retirement,” Joyce told CBS News. “…It’s working every day.”
Gesicks are out “retire” not because they want to, but because they have to. About one in five people over the age of 65, or about 11 million Americans, are still working, according to the Pew Research Center. Labor economist Teresa Girarducci said that work is the new way to retire. “So, I call it work, retire, repeat syndrome,” Girarducci said. “…More than half of retirees now don’t have enough money to retire.” Girarducci said she blamed “the policymakers who experimented with our retirement system 40 years ago, but they didn’t say the experiment failed.” This experiment is known today as the 401K, named after part of a 1978 law that offered businesses an alternative to traditional pension plans. “The idea is that Americans just need a little bit of financial literacy and they can save on their own,” Girarducci said.
The Lack of Financial Education
But the truth is, many of today’s older workers never received an adequate education “Saving and investing for retirement.” “I grew up on a farm,” Larry said. “No one there instructed us to save the money and go out on our own later.”
The Importance of Financial Planning
Whether you’re over 65, like Gesicks, or you’re approaching that age, there are some traffic rules to keep in mind. Everyone needs a plan. First, figure out when is the best time to apply for Social Security. Next, fund your emergency reserve. If you’re still working, set aside 6 to 12 months’ worth of living expenses. If you’re already retired, consider this as living expenses for one to two years. And keep that reserve in a secure, easy-to-access interest-bearing account.
Like many working-class Americans, the Gesicks were more doers than savers, and they drained their 401k. “I think for us it felt more like a savings account rather than focusing on, ‘I need to accumulate this to really live,'” Joyce said. Now, they have a mortgage, car loan and are paying off about $12,000 in other debt. But even with Social Security, some old retirement funds, and their paychecks, money is still tight. They said that after paying off all their expenses and debt every month, they only have $50 left. If Gesick had waited until age 70 to claim Social Security, they would have received more.
Facing Financial Pressure
“Yeah, there’s a lot of pressure right now,” Joyce said. “But I think we can see the light at the end of the tunnel.”
