You’ve been saving plenty of money for retirement, haven’t you? Yeah… me neither. That tropical private island I assumed I’d own someday? Probably not happening! Never mind living like a baller in retirement age. At this point, I’m more worried about just having enough money to subsist on.
In a world where many of us struggle to put a realistic retirement plan together, what are you supposed to do when it’s too late? Alongside Lauren Locker, a certified financial planner in New Jersey who specializes in eldercare, we’re going to cross our fingers and see what the options are.
Honestly, how much money do I need to retire?
That’s a tough question, and Locker says a lot depends on where you live, based on taxes and cost of living. Retiring on the coasts (apart from Florida, with its lack of taxes) is a whole different story than retiring in parts of the interior, for example. And, of course, it matters greatly what you’re actually going to do in retirement.
“The reality is, when it’s time for you to retire, you’re going to adjust to live the way you can afford to live,” says Locker. “You know when you got married and the thought of having a kid made you think, ‘Oh my God, how am I going to do that?’ But you make it. You just do. It’s sort of the same thing, with a few less options.” For example, you can’t just go to Home Depot or wherever and ask for a job working 60 hours a week — it’s just not possible at that age.
How many people are actually saving for retirement age?
According to a 2018 survey by the Employee Benefit Research Institute, two in three workers say they’re “confident” in saving enough for a comfortable retirement, but only 17 percent overall said they’re “very confident” in having enough. However, two in three workers also say they expect to work at least somewhat in “retirement.” So, it’s not exactly retirement as we think of it, is it?
Why are more people continuing to work through their golden years?
The cost of living is high (as you’ve probably noticed). But also, people are just more active than before. “We’re living longer and getting new body parts,” says Locker. “Years ago, if you had a bad leg, you sat down in a rocking chair and it was over. You just sat there. Now you can get new knees, new hips, a new shoulder, and you can keep going.”
While people with new body parts are able to do more things, being active tends to cost more money than just sitting in a chair. Also, some people want to do a “second career” — maybe that’s a glorified hobby, an unrealized lifelong dream or just something more chill than what they did earlier in life. Either way, some folks just don’t want to sit in that chair all day.
Are Gen X-ers and millennials basically screwed?
The survey doesn’t break things down by generation, but Locker says we can draw some general conclusions about the different generations. Millennials, especially, are risk-averse, and they tend to try to save more: They have less need for the big car or big house. But, they also have crushing student-loan debt, and they don’t save enough, Locker says — or save the right way. They tend to just put it in a savings account, which earns them nothing.
Can I just live on my social security check? How much am I gonna get?
Not nearly enough! Can you live on $1,200 to $1,500 a month? That’s the amount of the average check. Unless you’re in a tiny town, it’s almost impossible to imagine living independently on so little. Think of social security as your absolute baseline. Everything above that is on you.
Shite. So what sorts of other programs are there to help out people with no money saved?
Well, there’s Medicare, which kicks in when you’re 65. That’s a big one. But aside from that, it’s a bleak picture. Other things — housing assistance, energy subsidies, disability, prescription drug discount, Meals on Wheels — those are all administered at the state or the county level. It’s no gravy train: The programs are often severely impoverished, or sometimes at risk of getting cut altogether. Even worse, it’s hard for many people to even receive these benefits. Locker says there’s sometimes a several-year wait just to get on the actual waiting list, and all at a time in your life when time’s running out.
And is there any chance these programs will even be around in 30 to 40 years?
Tough to say. Locker thinks social security will probably still be around, but they’ll probably move up the age when you can begin to collect (say, 65 instead of 62). And paying into it will cost more so that it’ll still be around for the generations after you. The other stuff? That’s up to your state and local politicians.
Yikes. Well, if I reach retirement age and don’t have any savings, what am I supposed to do?
You do have options. They’re not great, and of course, it’ll depend on your health and other things, but here are some things to consider, according to Locker. First, as you’re approaching retirement age, make a budget so that you know how much you need to have to live on. “If you start by getting a budget even two years before you retire — when you know what you have, and can see what you’re able to produce in terms of income — you can start by maybe working a little longer, or get a part-time job to supplement what you do,” Locker says.
Other things she suggests: If you own your home, you can sell it and rent somewhere. You can move to a cheaper town or state. You can move in with someone: A sibling, your child or strangers. For money, you could additionally barter for work or offer your skills. What are you good at? For example, are you handy? Think you could paint or do handyman stuff? These are all options. The world is your oyster! (Sort of.)
I mean… things will probably just kind of work out though? Right?
Locker points out that men tend to have this attitude. (I know I do!) And it’s true — it will work out. Maybe not the way you want it to, but things will fall into place. Locker says, “People will just rent a room somewhere, get their social security check and get a hamburger and a beer every night and they’ll be fine… until something happens. I’m being flippant, but it’s kind of the truth.”
Well, crap. What am I supposed to do? I just don’t have enough money at the end of the month to save any.
It’s simple: Start planning. You really don’t have a choice! Not a real one, at least. “We preach this all the time and everybody just rolls their eyes and thinks, ‘How can I even do this? I’ve got kids, a wife, a house, where am I supposed to fit saving into that?’ But it has to fit in, because it’s grim on the other side of it,” says Locker.
In short, whatever age you are now is the perfect time to begin. Start off simple: Make a budget, talk to a financial adviser, just get the ball rolling. The only other option is to die before you retire, but who wants to give their employer that satisfaction?
Adam Elder
Adam Elder is a writer in San Diego. He's also written for Esquire and WIRED magazines, VICE, The New York Times, The Wall Street Journal, The Guardian, newyorker.com and elsewhere.
