Boomer couple can’t survive on social security, pension

Although Nina and James have admitted that they have enough to live on and spend on renovating their house, they are worried about their financial future as their pensions barely cover their living expenses. Nina recently worked part-time at a hospital to give them more financial stability. Both asked to use pseudonyms because of sensitivities surrounding past jobs as state workers.

“We’re definitely not poor, but at the same time, we really thought that between retirement and Social Security, we’d be in really good shape and have a good health plan,” Nina said. “But even with that, the way inflation is, it’s just out of control. We haven’t had a holiday in eight years. We’ve got plenty to do unless there’s another big emergency.”

In the US, millions of Americans are worried they won’t have enough to retire. Some boomers told Business Insider they’d have to work into their 70s or 80s to afford their daily expenses, while some Gen Xers and millennials said they’ve adjusted their retirement plans or become more cautious in terms of expenses. Some said that while they could have made better financial decisions earlier in life, they believe that working for more than four decades should guarantee some comfort later in life.

“Sometimes when I read things about baby boomers, they describe us all as rich,” Nina said. “We’re not rich. I worked really hard and started working as a babysitter when I was 12. But I think we’re lucky and certainly better off than a lot of people.”

I pull back, but not comfortably

Nina said that neither of her parents were rich, noting that she was expected to marry and become a housewife. Instead, she earned a social work degree using loans she paid off 20 years later and married young, though she later divorced. It took another 20 years to pay off her son’s student loans.

Nina married James 35 years ago. Nina was a state social worker, then became a probation officer. James, who has a degree in criminology, worked as a police officer for many years and was transferred as a parole officer. He started law enforcement at age 21 and worked non-stop for 36 years.

Nina said they both worked in dangerous situations and spent long hours in the summer heat.

“I never had the luxury of working from home or telling my employer I was looking for a job where I could balance my work and personal life,” James said. “We had to prove ourselves and if we ever told our bosses I’d like to work from home this week, they’d laugh at us.”

Both took early retirement in 2012, although Nina said she had to stop working early due to health problems. Both worked part-time teaching domestic violence case management courses. Nina returned to work a few years ago as a concierge at a local hospital to cover her expenses and afford home repairs.

“We were able to retire early because we were law enforcement, so we had a better retirement plan that allowed us to pay for our health insurance,” James said. “The work we did was pretty stressful. We had to carry a firearm and we had to make arrests. We had a very high-risk caseload. Given our age, we were nearing burnout. the job”.

After decades of work, both expected retirement to be fairly easy. Their children were grown, they had pension and social security income, and they lived a frugal lifestyle. However, the last few years have proved particularly difficult from a financial point of view.

Five years ago, Nina had a heart attack, which consumed some retirement savings, even with their medical plan. James was recently hospitalized for a pancreatic tumor. And during the pandemic, two of her three children died, which devastated the family.

“You might think you have a good amount of money and things will be fine, but life happens,” Nina said, adding that she struggles to keep up with inflation. “We’ve worked so hard and now we’re getting crumbs thrown at us.”

They lost about two-thirds of what they were owed in Social Security because of the elimination of exceptions provision, which reduces the Social Security benefit for some people who receive a state pension. James receives about $650 a month in Social Security from his private sector employment, while Nina receives only $32.

Making his retirement work

James said his state pension is about $40,000 a year, although he only gets a 3 per cent increase each year thanks to a cap implemented more than a decade ago.

Their part of New England is “not a cheap place to live” because they pay high utility bills in the summers and winters. James said he did a lot of landscaping and home renovations himself to save some money. They have also shopped more carefully in recent years, cutting unnecessary costs.

Nina estimates they pay about $1,700 a month on clothing, toiletries and food for themselves and their three cats. They stick to discount stores and cheaper grocery stores where they buy exactly what they need without wasting. They occasionally go out to eat, though Nina said they often get sticker shock. They cut back whenever possible, like paying for only a dozen cable channels, even though they pay for Netflix and Amazon Prime.

They recently purchased a 2014 car — the newest used vehicle they could afford, Nina said. She’s seen five-year-old cars sell for more than $30,000, which she avoided given the high interest rates.

They are still paying a modest mortgage on the house they moved into in 2011 and have invested heavily in remodeling their kitchen, which was built over 70 years ago. They refinanced their 1,400-square-foot home in 2020 at a 3.9% APR and have six years left on their mortgage. They don’t plan to move because they have some equity and the homes they both grew up in average over $500,000.

“We get a lot of compliments on how nice the house looks on the outside,” said Nina. “I’d be depressed if we didn’t have something to be comfortable with.”

The remodeling cost about $48,000, which I am still paying. James said he is considering going back to work, although he still feels exhausted from decades of work. Nina works a “physically demanding” job that includes helping to move people in their wheelchairs.

“We’re both proud of what we have, so we’re not the type of people to let our house go,” James said, noting that they want to give their house to their son in a few years. “We put a lot of money into it, nothing fancy, but we had to maintain it and keep it looking nice.”

They also sacrificed vacations as they haven’t been away in over eight years. Still, Nina said investing whatever disposable income they have in their home is the best use of their money.

“I would love to go on vacation, but leaving my child with something is more important,” Nina said.

Are you worried about retirement? Contact this reporter at [email protected].