Rosalind Evans
In the sunny city of St. Petersburg, Florida, 77-year-old Larry Gesick begins his day well before dawn. Despite being retired, he heads to a local supermarket to work part-time unloading trailers for $14.75 an hour. His wife, Joyce, 66, also works full-time as a legal administrator for $14 an hour. This is not the peaceful retirement they had envisioned. “It’s not a retirement,” Joyce told CBS News. “It’s working every day.”
The Reality of Retirement for Many Seniors
The Gesicks’ story is not unique. According to the Pew Research Center, about one in five Americans over age 65, roughly 11 million people, are still working. This trend highlights a broader issue facing retirees today. Labor economist Teresa Ghilarducci describes this phenomenon as the “work, retire, repeat syndrome.” “More than half of the people who are retired right now do not have enough money to be retired,” Ghilarducci noted.
The 401(k) Experiment and Its Fallout
Ghilarducci attributes the current retirement struggles to a flawed experiment with the retirement system that began 40 years ago. This experiment introduced the 401(k) plan, a departure from traditional pension plans. “The thought was that Americans just need a little bit of financial literacy and they can just save on their own,” Ghilarducci explained. However, many older workers, like the Gesicks, were not adequately prepared for this shift in responsibility.
Lessons in Financial Preparation
For those nearing retirement or already there, having a solid plan is crucial. First, consider the timing of claiming Social Security benefits. Then, build an emergency reserve: six to twelve months of living expenses if you’re still working, or one to two years if you’re retired. Keep this reserve in a safe, interest-bearing account. Unfortunately, the Gesicks, having focused more on immediate needs rather than long-term savings, find themselves struggling. “To us, it felt more like a savings account than to focus on, ‘I need to have this piled up to actually live on,’” Joyce admitted.
Navigating Financial Challenges
Currently, the Gesicks manage a mortgage, a car loan, and about $12,000 in other debt. Despite Social Security, old pension funds, and their paychecks, their financial situation remains tight. After paying all their expenses and debts, they are left with just $50 each month. Had they waited until age 70 to claim Social Security, their benefits would be higher. “Yeah, it’s stressful now,” Joyce said, “But I think we can see the light at the end of the tunnel.”
The Gesicks’ experience sheds light on the financial realities many seniors face today. Proper planning and understanding of retirement savings are essential to avoid these challenges and ensure a more secure and fulfilling retirement.
