What Retirement Without Savings Looks Like

What Retirement Without Savings Looks Like

By Paul Sisolak, GOBankingRates.com (TNS)

In a perfect world, the perfect retirement is where life begins. But for people like Debra Leigh Scott, there’s the very bleak possibility that retirement is where life might end.

“Suicide is my retirement plan,” Scott, a 60-year-old adjunct professor, said in an interview with Vitae, an online career hub operated by The Chronicle of Higher Education. “Unless you have a spouse or partner, you’re looking at dire poverty in old age. In addition to poverty, you’re looking at getting no additional work because of your age, or you’re looking at dropping dead in the classroom.”

Scott, a divorced mother of two grown children, has been teaching for over a quarter century but never received the tenured position she hoped for. After years of financial struggles — including the loss of a home — she has no money saved for retirement.

Fewer Americans than ever before are adequately prepared financially to retire. In a survey earlier this year by the Employee Benefit Research Institute and Greenwald and Associates, 28 percent of respondents said they have less than $1,000 in savings and investments poised for retirement. A 2014 Federal Reserve survey paints a more discouraging picture: 31 percent of non-retired respondents have zero retirement savings — 19 percent of them ages 55 to 64.

Scott’s story is a real-life reminder that paints a painful portrait most people would rather avoid. With their golden years well ahead of them, many people assume there will be enough money stored up to retire without a hitch. And they don’t even want to think about considering the alternative. But for many adults behind on retirement savings, they might be unaware of the realities of retiring without enough money in the bank.

If that money isn’t there by the time you retire, that ideal retirement — world travel, time spent with family, and a life of leisure, relaxation and hobbies — will have to come with some major downgrades to compensate for your lack of savings.

The average Social Security check for retirees is $1,287. “Social Security can help boomers make ends meet during their golden years, but for many, it won’t be enough,” wrote Donna Fuscaldo of Fox Business. If you’re single and qualify for Supplemental Security Income, you might be able to barely live off Social Security and SSI, but if you have any extenuating expenses, like a mortgage or supporting adult children returning to the nest, you cannot.

Steve Vernon of CBS MoneyWatch offered the example of a single, 65-year-old woman with a $50,000 annual salary — and no savings or assets to invest — looking to retire. “To help cover her living expenses, one option she may want to consider is the ‘Golden Girls’ solution of sharing living quarters with other people in her situation,” he wrote. “If she owns her house, she may want to consider renting a room to bring in more income.”

If Vernon’s hypothetical retiree wants to retire full time at age 70, “she’ll need to focus on buying ‘just enough’ to meet her needs and be happy. Most likely this will be a struggle, unless she has paid off the mortgage on her house, which will make things a little easier,” he wrote.

Selling your big house or car and downgrading to smaller, more affordable living arrangements and transportation can save money. If every decade of your working life has been to dream bigger and bigger, however, scaling down smaller and smaller in retirement might seem a bit anticlimactic.

Trying to retire without any savings in the bank can be difficult, and that difficulty is compounded by other factors senior citizens need to keep in mind as they age, like health issues and mobility. If saving money is not possible for you, retirement doesn’t have to pass you by. There are plenty of government-assisted and nonprofit programs that can help you, such as the Commodity Supplemental Food Program, Medicare, senior housing help from Housing and Urban Development and other resources.
Paul Sisolak writes for GOBankingRates.com (), a leading portal for personal finance news and features, offering visitors the latest information on everything from interest rates to strategies on saving money, managing a budget and getting out of debt.

Photo: Beware. 401(k) 2012 via Flickr

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