According to research by The New School, many American families experience downward social mobility in retirement caused by a lack of savings, and that can’t be remedied by working longer. Saving more is the only solution.
Nashville, Tennessee residents Mary and Steve Dacus haven’t found retirement to be easy. Like many middle- and working-class Americans, they had only modest savings for retirement.
Steve was forced into retirement at age 62 after medical issues, meaning he doesn’t get the maximum Social Security income each month, and that there’s a gap between his employer’s healthcare coverage and his Medicare eligibility.
AARP surveys have found that about seven in 10 baby boomers plan to work in retirement. But, working can’t be an alternative to saving.
The Dacuses didn’t plan for these issues. They spend about half of their retirement income on housing, and Steve is currently uninsured despite many health problems.
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Mary and Steve Dacus of Nashville, Tennessee didn’t retire to the life they thought they would.
“I thought I was going to be able to sit down and do my songwriting and take a little time to breathe, because I’ve always worked hard all my life,” said Steve Dacus, who retired early at 62 due to health issues after a 42-year career in sales for a plumbing supply company.
“We really didn’t think it was going to be a struggle,” his wife Mary, who took disability eight years ago due to Lupus, told Business Insider. “We really thought that more people would take care of the seniors.”
They had pictured a retirement where they’d have access to services like Medicare and affordable senior housing. They also thought that Steve would be able to continue earning and stay employed, even if just several hours per week.
The two spend about half of their $2,100-per-month retirement income on housing in Nashville. “The apartment that we live in is a one-bedroom and is old and is probably one of the nastiest places we’ve ever lived,” Steve told Business Insider. “And it’s $900 a month.”
While they’ve considered moving to Missouri for cheaper housing costs, they’ve found they don’t have the cash on hand to pay for the move. They still haven’t ruled it out. “That’s the next hurdle,” Steve said.
They didn’t plan on Steve being hurt and unable to work in retirement, didn’t think they’d spend half their monthly income on rent, and didn’t plan for the expense of Steve’s healthcare in the three-year gap between when he was unable to work at 62 and when he’ll reach Medicare age at 65. But, given how many Americans aren’t saving enough for retirement, Mary and Steve aren’t the only retirees feeling squeezed out of the life they once lived.
When he was working, Steve didn’t do much to save for retirement — there wasn’t a whole lot left over to save. The Dacuses say they lost $100,000 they did have saved for retirement during the Great Recession. And when the day …read more
Source:: Business Insider