Boomer Retirement Savings: Social Security Pension Budgeting In 2024

by | Jul 5, 2024

A retired baby boomer struggling to make ends meet believes Social Security should be considered a right in the United States.

Linda, who is a former teacher from Ohio, has to keep working to survive. She and her husband, both public service workers, lived modestly, but she still needs to work. Many retirees face similar difficulties with low incomes, shrinking pensions, and diminishing Social Security.

At 64, Linda has worked for 31 years, yet she’s not done.

The retired high school teacher in Ohio, whose last name is being kept confidential for privacy and professional reasons, said her retirement isn’t turning out as she expected. Both she and her late husband were public servants, so they didn’t have high-paying jobs, but she does have a pension, which means she’ll receive a monthly payment in retirement. However, it’s not stretching as far as she had hoped.

“We lived modestly as two public employees just getting by,” Linda said. “We bought a house, struggled with debt. I’m still in debt after his death, and the bills keep coming, so I need to keep working.”

Before retiring, she earned about $5,000 monthly. Now, with her pension, she’ll receive around $3,700 a month, according to documents reviewed by BI.

She’s exploring part-time jobs and other options to stay afloat. She wants something that offers her a “bit of autonomy” with scheduling, and said if necessary, she’d apply for Instacart and deliver groceries. She wants to ensure she never becomes a burden to her children, even as she ages.

She doesn’t see herself ever fully retiring; she plans to work until she’s physically unable to.

Linda isn’t alone. Many retirees or those nearing retirement can’t completely stop working. The Census Bureau’s Current Population Survey found that just over half of respondents over 65 were living on an income of less than $30,000 in 2022. Many older Americans expect to work until they’re no longer physically able to. This situation has become more pronounced in recent years, as retirement becomes increasingly reserved for higher earners. It may only worsen as pensions continue to dwindle and Social Security remains at risk.

“I can see myself working for the next 20 years—if I have that many left. Whatever years I do have, I won’t be enjoying the retired life in Florida,” Linda said.

A Looming Retirement Crisis for Many

Linda’s retirement plans are modest: She hopes to make ends meet with her teacher’s pension, a rolled-over government-worker retirement plan, the sale of her house, and some part-time work.

“I’m hoping that all these elements together will create something I can live with. I will never be wealthy or free from worry, but I hope to reach a point where I can travel and supplement my income with part-time work,” she said.

older man having to work

Linda is among the few retirees with a pension, but it comes after a low-paying public service career. A Government Accountability Office report last year found that older, lower-income Americans are increasingly unlikely to have any retirement account balances. Additionally, fewer low-income households have a pension. This shift means workers, rather than employers, now bear the burden of retirement saving and planning. For lower-income workers, who might not be able to save much, this is a significant challenge.

Linda believes teachers have been unfairly criticized in recent decades. The notion that they just want to drain the system is far from the truth, she said.

“Even though I had that job, I also had the low salary that came with it. And there are many financial challenges in life,” she said. “Unfortunately, teaching is not a career that ensures financial stability.”

Despite this, she said it was still the most uplifting and rewarding work she’d ever done.

She also thinks the country needs to rethink its conversations around Social Security and retirement benefits. She said pensions have fallen into the hands of private equity, potentially endangering those guaranteed benefits. Meanwhile, politicians have targeted Social Security, suggesting raising the retirement age and not funding its reserves.

“We need to change the mindset that Social Security, which people have paid into for decades, is somehow an entitlement. It is a right,” she said.

Even so, Linda feels fortunate: She has two adult sons who will always look out for her; she’s even moving closer to one. They earn good money, and she knows she has a safety net.

“There are so many people in this country approaching retirement and feeling completely desperate, wondering how they’ll get by,” she said. “Those are the people I really feel terrible for.”

Original article: https://www.businessinsider.com/boomer-retirement-savings-social-security-pension-budgeting-2024-7

Author

  • scott hall

    Scott realized about 5 years ago that he was woefully behind on retirement savings and needed to catch up. He began writing about it on Assets.net

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