Rayena Lyngen expected to live her retirement years in the same comfort she lived in during the prime of her life.
Then reality set in.
Roy Murray didn’t really have any expectations for retirement. During his career in retail computer sales, retirement wasn’t something he ever planned for. Now he has to mow lawns on the weekends to make ends meet.
Glendon Richardson has been retired since 1973, and the 86-year-old former roofer said his retirement is as enjoyable now as it ever was. He said he doesn’t have anything to worry about. And the reason he offers is simple.
“I saved,” said Richardson.
On a given day, there are dozens of retirees enjoying the leisure and learning activities at the Lions Club Senior Center in Killeen. But these three seem to represent something larger.
A recent study by the Employee Benefit Research Institute revealed that one in three households headed by people aged 55 to 64 won’t be financially prepared to retire, even by age 70. On this day at the senior center, the number of actual retirees who are living comfortably is only one in three.
“I always lived very well,” said the 67-year-old Lyngen. “We lived in big houses. We had everything we ever needed. But three years into retirement, we got divorced, and he took everything.”
Now Lyngen, who volunteers at the senior center, is entirely dependent on a Social Security check that provides less than $700 a month after health care deductions.
She does not have a car. She has to depend on others to get to the center, and she often finds herself walking a mile and back in order to stock up on groceries.
She depends on the housing authority to subsidize her rent and she has been on and off food stamps for the last several years. Amid all of this, Lyngen is afraid inflation will make it impossible for her to get by.
“People say that inflation has not been that bad,” she said. “They should try to get by on $650 a month. Everything is going up. Food. The price of my medication. I have good insurance, so co-pays have not been a problem, but it keeps going up, too. I am afraid I will have to depend on Medicaid soon.”
Lyngen could be a cautionary tale for people still in the workforce. According to the EBRI study, only 60 percent of married couples aged 55 to 64 have at least $25,000 saved up for their retirement. That means 40 percent of Americans approaching retirement are precariously close to finding themselves in a position similar to Lyngen’s.
“It is something to be concerned about, but as long as you have a plan, you should be OK,” said Susan Mitchell, certified financial planner and branch manager at financial service holding company Raymond James in Killeen.
Careful planning needed
Mitchell said that unless somebody has a generous pension to depend on, it takes careful planning to make it comfortably through retirement. She said a majority of people aged 55 to 64 will have to depend on Social Security and savings to get by. And she said that is more than the next generation can depend on.
“I truly feel that people who are 55 or older will have their Social Security benefits as we know them,” she said. “But if you are 55 or younger, you will have to save more or work longer.”
Mitchell said people can be understandably reticent about sharing their private information with a stranger.
“I think where the angst comes in is the pre-planning,” she said.
Joyce Mayer, director of the Harker Heights Senior Center, said that is indeed a big part of the problem.
“A lot of seniors don’t like to discuss their personal financial situations,” she said. “The could get a lot from opening up, but they are afraid. They are afraid of the information. They are afraid any advice they are given might not be right for them.”
“Many seniors who do have financial advisers have had the same one for decades,” she said. “They stick with them even though they might not be right for them. They might have the same bank they stuck with throughout their married life. They didn’t consider other options.”
Killeen attorney Gene Silverblatt said his generation seems to be learning from that mistake. Silverblatt, an elder care attorney, said more and more people approaching retirement are realizing they could benefit from his services.
“The problem as I see it from my perspective as an elder law attorney is that my age group, those people in their 50s and early 60s, are going through, or have gone through, a period where they have to see their parents become incapacitated before passing on,” Silverblatt said.
“That has brought those fears and concerns to my age group in a very firsthand way. So as I work on power of attorney documents or trusts for their parents, they are realizing more and more that they will need those documents, too.”
Another helpful tool
Silverblatt said an elder care attorney is another tool that can be used to build a comfortable retirement. He said having a power of attorney or trust in place can make things a lot simpler if there is an unforeseen medical disaster during one’s retirement years.
“Very often, I have a lot of interaction with a financial planner,” he said. “Sometimes the tax preparer is involved. The family, which may include adult children as well as the client, and myself are the team.”
“The estate planning attorney very often ends up being the coordinator of the process,” he added. “I don’t direct, but I coordinate a lot. A lot of times it is the financial planner who initially asks the client if they have a will, if they have a power of attorney. Very often, they get the idea from those existing relationships. But once I am brought into the picture, I tend to coordinate all the pieces.”
At the end of the day, whether the economy is strong or weak, there is one simple thing that will likely determine if a middle class earner can sustain their lifestyle through retirement.
“You have to save,” said Mitchell. “You have to be debt free, or at least prepared to manage your debts. The people who struggle during retirement are the people who did not save enough.”
On Wednesday afternoon, there were three retirees sitting in the waiting area of the Lions Club Senior Center. Only one of them was relaxing. And whatever else is going on in the world, he will likely always be comfortable simply because he saved.