St. Petersburg, Florida — Larry Gesick, a 77-year-old electrician by training, leaves his home at 5:30 a.m. to go to his part-time job unloading trailers at a local supermarket in St. Petersburg, Florida, for $14.75 an hour. It certainly wasn’t in his retirement plan.
His wife, Joyce, 66, prepares for her day at work, earning $14 an hour as a full-time legal administrator.
“It’s not really retirement,” Joyce told CBS News. “… It’s working every day.”
The Gesicks came out of retirementnot because they wanted to, but because they had to. According to the Pew Research Center, about one in five people over the age of 65, or about 11 million Americans, are still working.
According to labor economist Teresa Ghilarducci, work is the new retirement.
“It’s what I call the work, retire, repeat syndrome,” Ghilarducci said. “More than half of the people who are retired right now don’t have enough money to do so.”
Ghilarducci says she blames “the policymakers who experimented with our pension system 40 years ago, and they don’t say the experiment failed.”
This experiment is what is now known as the 401K, named after part of a 1978 law that offered companies an alternative to the traditional retirement plan.
“The idea was that Americans just needed a little financial education and they could just save on their own,” Ghilarducci said.
But in fact, many of today’s older workers have never received enough education about save and invest for retirement.
“I grew up on a farm,” Larry said. “Nobody there asked us to save money to help ourselves later.”
Whether you’re over 65, like the Gesicks, or approaching that age, there are a few rules to keep in mind. Everyone needs a plan. First, figure out the best time to file for Social Security. Next, build an emergency fund. If you’re still working, set aside six to 12 months’ worth of living expenses. If you’re already retired, plan for one to two years’ worth of living expenses. And keep that fund in a safe, easily accessible, interest-bearing account.
Like many American workers, the Gesicks were more doers than savers, and they depleted their 401k funds.
“I think for us it was more like a savings account than a question of, ‘I need to have this money saved up to live,’” Joyce said.
Today, they have a mortgage, a car loan and are paying off about $12,000 in other debt. But even with Social Security, some old pension funds and their paychecks, money is tight.
After paying off all their expenses and debts each month, they say they have only $50 left. And if the Gessicks had waited until they were 70 to collect Social Security, they would have gotten more.
“Yes, it’s stressful right now,” Joyce said. “But I think we can see the light at the end of the tunnel.”
Jill Schlesinger
