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Out of Work Baby Boomers Struggle to Survive

Category: Financial and taxes in retirement

April 16, 2013 — Millions of baby boomers have been forced into earlier than intended retirement. Surviving that experience has become a brutal challenge. A study from the Urban Institute, a Washington think tank, found that it took more than nine months for half of those over 50 to find a job. Many have not been able to find a job, and have either given up the search or gotten creative about how to survive on their reduced incomes.

3 Boomers Profiled
The Squared Away Blog from the Center for Retirement Research recently profiled 3 baby boomers who are experiencing the struggle to survive. The profiles will sound familiar to many.

Kevin Milligan, an economics professor at the University of British Columbia, determined that two-thirds or more of jobless Americans between ages 55 and 65 rely on their spouses for income. Investment income is another important way they survive (although typical savings for households age 55-64 are quite low – $42,000), followed by social security, pensions, or disability income. Having only one spouse working creates hardships, as these older households are less able to save in their 401(k)s.

Jobless boomers are often forced to tap charities, take part time work, and collect food stamps to survive. And many unemployed boomers are being forced to collect Social Security benefits before they had intended, sacrificing a bigger benefit if they could just delay filing for a few more years.

For further reading
Squared Away Blog – How They Survived

How are you coping? Please use the Comments section below to share your story on how you are coping with an unexpected retirement.

Posted by Admin on April 16th, 2013


  1. I retired early in 2005 and had a tidy retirement nest egg at that time. Unfortunately, I invested one IRA into a company that turned out to be a Ponzi scheme and lost $220K (see Merendon Mining and Brost/Sorenson). Then the housing market collapsed and my three properties all went upside down. In short, by 2010 I had to file bankruptcy in order to hangon to my small remaining IRA, and to stay in my house. However, I needed to return to work, and I did that for a few years. But health problems have forced me to quit fulltime work. I now work part-time as an accounting clerk (quite a comedown from my former profession of software engineer), and barely make ends meet. And I am 63 now, and still struggling with my health. My plan now is to amass enough of money to invest in a mobile home somewhere in the south that is warmer (I’m in upstate NY right now), possibly Arizona or Nevada. I have previously worked for H&R Block and will try to return to that, whereever I live, which will bring in a few thousand a year. And I will try to find work I can do from home on the internet, such as work for a call center. I hope to find a nice 55+ mobile home community where I can have activities for the lend-lease price and use the pool and gym on site. I will be looking at communities that have: good medical facilities, public transportation, lots of community events and activities. I’m trying to set myself up for a life that is as inexpensive as possible, and still fun and rewarding. Living in a warm state will help with these awful heating bills in winter. I lived in Nevada for 5 years and loved it; the summer heat doesn’t bother me. And if I work from home part-time, I can spend more time doing things I love and cooking at home, rather than eating fast-food on the fly, as I often do now. If I need to apply for foodstamps I will and no shame. I’ve been paying taxes and supporting others for many years. Even though I have very little money and can probably only afford to pay up to 25K for my mobile home, I think I can create a decent and rewarding life for myself.

    by Ginger — April 17, 2013

  2. Ginger
    You really got my attention with your comments. I am in the same predicament
    you are. I am completely unhinged by my circumstances. I lost 40% of my retirement income in the stock market crash in 2008. Being scared I took what I had left and put it in a bank. Being realistic there is only enough money for me to make it until I’m 78.(I’m 71 now) You know you work hard and live a frugal life and it is all gone when you need it most. The fear of
    Medicare being reduced increases anxiety. Also my Social Security is the lowest amount it can be because I worked for the state, but not long enough to get retirement. Your solution is the same as mine. I wish you the best of luck. You sound like you are really strong and I’m sure you will make a good life for yourself. My plans are the same as yours to buy an inexpensive mobile home. Be careful when you look though because the land-lease and HOA’s can sometimes be as high as a home mortgage. We’re going to make it
    and I think we will both be happy because it is all about what you make of the position you are in. My best to you.

    by Claire Melton — April 18, 2013

  3. The problem with working to survive is “What happens when you can no longer work?” While working at whatever you can do, you must pay down to zero all mortgages, cars and credit. Create balanced payments for utilities in order to pay almost the same every month instead of high then low and then back to high. If you drive less than 7500 miles per year, you can get an insurance discount. Up your deductible on auto insurance and pray you don’t have an accident. If you are on food stamps, look into having your Medicare paid by the agency or state where you live (see food stamp counselor).

    And don’t be so proud and not do any of this. The government, along with some of our own mistakes, is responsible for much of what has happened to boomers and those already in retirement. The programs were created, so there is no reason to not use them. And finally, if you are working, are you working 500 hours or more in any quarter? That’s a hurdle to achieve in the event you find yourself unemployed by layoff or whatever. Do not quit. You may then start collecting unemployment. Your job will then be to find employers that won’t hire you.

    Good luck to all in your pursuit of survival.

    by Edward — April 18, 2013

  4. I was separated from my husband and he was suiing me for a divorce when I left to go from NY to CA for a teaching degree paid fellowship…in the middle were my near over 18 grown husband died just before final papers (he would not pay his lawyer so the papers were not done) and then his family sued for the life insurance proceeds through my sons in spite of a will that left his estate to me…this allowed my divorce lawyer to take a third of the life insurance for his cocaine habit ($100,000)and it was not until I brought suit that they disbarred him that they got back $20,000. My mortgage was in default so $55,000 immediately went to save the house…then my oldest son needed a new car to live in the house so I could continue to teach in CA for health insurance on myself and my youngest son who is disabled..after three years I was able to move back with no helath insurance, my house half remodeled and tore up and prayed for the SS case for my son to go through for Medicaid for him…I got a job for 5 years teaching college and everything went well until 2011 when NY cut my job..after 2 years and at 57 it is just so difficult to stay cheered about hiring me as a school teacher at my age even though I won several awards in California…Since 2011 I withdrew from my 401k and now I am audited because I was told at 55 and losing your job you could take a hardship withdrawal I guess that depended on the IRS… now this year the unemployment ran out and I owe for taxes on unemployment insurance, a widows annuity and social security…BUT I did not have a heart attack like the MRI showed and I did not have breast cancer liked the MRI thought…..It was STRESS…… God has blessed me with health and I amsubbing a few days here and there…wearing a hat and sweater and suddenly found myself the happiest in years without being in a relationship or with money…I saved an old horse from slaughter and live withmy 2 rescue dogs…my sons still love me and I forgave them in their pain…I don’t need a retirement …I found a re-LIVEMENT….blessings and prayers to you….for you

    by Betty — April 20, 2013

  5. Your stories are heartbreaking, and of course you are not alone. I have a sibling who was laid off at 60, who is living on his 401K now so there won’t be anything left when by the time he reaches retirement age. He’s trying to find temp work or a new job, but the fact that he threatened to sue for age discrimination (he settled for a few months of salary continuation and health care) have apparently made him unemployable in his small town and industry. I am in my early 60s, and our company is talking about lay-offs too. I go from pay check to paycheck and am doing everything possible to pay down debt, worrying about getting the last kids out of school and launched. My spouse just died after some years in a nursing home. We had to qualify for Medicaid, so lost our savings during the spend-down for his care. I had to start over in my late 50s and he had no life insurance due to preexisting health conditions. I’ve verified that I will receive about $1350/mo in widow’s benefits from SS whenenever I get laid off, so that’s going to be a helpful safety net. I admit that I find myself jealous of couples who have pensions, enough savings that they talk about enjoying travel and having retirement homes in two locations, or even couples who look forward to a loving retirement together. However, there are also many people in our boat whose lives and retirement plans have blown up for one reason or another, and not always for reasons within our control. We have to just do the best we can, and tell ourselves that this will pass eventually. There are a lot of us struggling day-to-day. I liked seeing re-LIVEMENT. I think I’m going to appreciate just being able to wake up and enjoy a library book even if retirement turns out to be a financial struggle.

    by Elizabeth — April 21, 2013

  6. My husband became ill in 2010, and he has been unable to work since then. I took my Socical Security benefits at age 63 to make ends meet. I started having debilatating back problems after I collected SS, so I was unable to apply for SS disability. We now live on SS benefits of about $1600 per month, and neither of us have pensions. We have very modest savings which I know will eventually run out. Although we have once another and a house without a mortgage, we are really not able to enjoy our retirement due to the high expenses of utilities, medical bills, food etc. What a shame that we seniors who worked all our lives have to live like this

    by Linda — April 21, 2013

  7. I think Edwrd has some useful suggestions on how to reduce some costs and take advantage of some of the social safety net benefits you’ve been paying for all of your working lives. The government didn’t create the problems of little money in retirement – the private sector did, when it stopped funding pensions and advocated for 401K as a creditable replacement. That was a complete fabrication, because the market now decides whether you will have any pension money. How ridiculous! The other issue is how much you can take each year in order to live, without touching the principal. Once you start taking that, then it won’t last very long. I have a friend whose in her 70s and alone. She wants to sell her house and rental property and move home to California ( from NC). We recently had a conversation where I advised her to stay put. That’s because, given cost of living in LA and taxes in that state, she wkd probably go through it in two years! Then what? She would only be left with SS….in LA? I don’t think so. She’s decided to stay put and vacation in LA. Thank goodness for social security and Medicare. Not perfect programs by any means. But how wonderful to have them for those who have nothing else.

    by Sheila — April 21, 2013

  8. Ginger & Claire, how impressive are your realistic assessments of your situations and making plans BEFORE all your options have evaporated! I’m so stunned at the number of people who went from $500K homes to living in their cars – a very sad situation, to be sure. But how in the world did they not see it coming? While ignoring the mortgage for 6 months before foreclosure on an upside-down-house, why didn’t they stash that money to move into a mobile home, or at least purchase a small, used motor home to bridge the gap? At least there would be closets, a shower and a toilet and therefore be able to get to work presentably. Let’s face it, asking a friend or relative for power and water hookups for a few months is far different from asking to sleep on their couch.

    Honest to goodness, I’m really not judging those who have fallen on misfortune. Reversals can and do happen to everyone at various stages of life. I’m just flabbergasted at why so many wait until the sheriffs get to the door before understanding the magnitude of their circumstances.

    Preparation is so essential at all stages of life. When looking at retirement it is even more crucial that we separate fact from fiction and true reality from best case reality. We also need to take note of where our safety nets lie.

    Sheila, bless you for pointing thest things out to your friend. You may have done her the biggest favor of her life. Edward, I totally agree with your statements about eliminating debt, mortgages and car notes. I am finishing off a mortgage soon and then hope to save for home repairs that will surely crop up over the next several years.

    Retirement is farther away than I’d hoped, but with no pension and only about $200K in retirement savings (plus SS when it’s time), I know that I will need to keep working for a while. 😳

    by Jaycee — April 22, 2013

  9. My friend was divorced by her husband. She bought out the house from him for just about all of her savings. He subsequently died so all that money went to his family. Then we had the financial crisis and her house in Southern California went way upside down. Then she got cancer and had to quit work. She is winning her battle with cancer, but lost her house. Zero proceeds from the sale. The dead ex has the bulk of her savings, so now she is surviving in a trailer in a 55+ community and making the best of it.

    by robert — April 22, 2013

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