Editor’s Note: “Friends wonder privately how someone so well educated could be in economic free fall,” Elizabeth White wrote in a column for PBS’ Next Avenue. “At fifty-five, she has learned how to fake cheeriness and to appear to be engaged, but her phone doesn’t ring with opportunities anymore.”
The article about the growing number of women facing retirement and struggling to make ends meet hit a nerve, receiving thousands of likes and comments on Facebook. People resonated with the reality White faced herself. She had had a comfortable upper-middle-class lifestyle and a good-paying job, but after a failed entrepreneurial endeavor and the Great Recession, she was facing a stark reality. She was broke.
In “Fifty-Five, Unemployed, and Faking Normal,” White offers advice to those baby boomers who, instead of facing cushy retirements in Florida, are facing financial ruin and the shame that comes with it. The following is an excerpt from her book. For more on the topic, tune in to tonight’s Making Sen$e segment, which airs every Thursday on the PBS NewsHour.
— Kristen Doerer, Making Sen$e Editor
I have been fortunate. I have been poor for quite a long time now, so I’m pretty good at it. The simple no-frills life is fine by me. — Debie
Millions of us are trying to wrap our brains around futures that look nothing like the ones we imagined. How do we walk up that hill? It’s about letting go of what used to be and figuring out what we need to do and to change now so that we can have a shot at a more satisfying life in our fourth quarter.
You may not like all of the things that I invite you to consider and take on in the chapters ahead. Adaptation is hard at any age, but it’s especially hard now, as all of the rules changed just as we baby boomers are planning our end games. It would be so much easier to just do what we’ve always done.
But we can’t. We’re anxious, uncertain about the future and just scraping by for the next 30 years is just not going to cut it. Nor is being mired in some old stuck story or feeling mad, bitter and crotchety. All of those “wouldas, couldas and shouldas” are just a waste of precious time at this point.
The bottom line is that we are where we are. And it’s from here that we start. While there is no one-size-fits-all solution to the challenges we’re facing, there is much we can learn from our peers who are experimenting with unconventional approaches and innovative ways of relating to others, consuming goods and working to find security and happiness.
If we’re in denial, resistant to change or unwilling to consider anything new or outside of our comfort zones, we might as well close up shop now. How we start this exploration matters. Staying open and hanging loose are important.
I have to say one thing. You cannot have a victim mentality, or you might as well not get up in the morning. The days of cushy desk jobs, ordering lunch every day and fat paychecks might be over, but you have to keep pushing. If you have ‘friends’ who go to bars and restaurants that you can’t afford, find some new friends who enjoy a cup of coffee and a chat instead. Learn how to be self-sufficient and enjoy the things in life that cost less. Stop reading the don’t-want-you ads, and try to do something else. — Tracy
The cavalry ain’t coming
Where we start is by recognizing that the cavalry is not coming to rescue us. There is no national bailout—no prince charming on a white horse.
In the short to medium term, we’re going to have to save ourselves and one another.
Why? Well, with few exceptions, our politicians are not offering comprehensive solutions to the retirement-income crisis. Most are focused on Social Security as though it were the answer and the magic bullet. But what if you’re one of the millions of boomers under the full-retirement age, of between 65 or 67 depending on when you were born? Then for now, you’re out. Receiving the full Social Security benefit isn’t even an option.
And even when you are eligible for it, the full benefit will only replace about 40 percent of your preretirement income, if that. Most financial advisors say you’ll need 70 to 80 percent of it to maintain your standard of living. For tens of millions of Americans, that small Social Security check is the only money coming in. Our lawmakers can pretend all they want that that’s enough to live on. Give me a break.
And while we welcome the recent talk in Washington about increasing the Social Security benefit, we also know that the wheels of change turn slowly. We’re living in the meantime.
And exhorting us to simply save more without telling us how to do it doesn’t help us either.
I went with my sister to one of those financial-planning seminars and had to leave the room a few times because I was so upset by what I was hearing. It was just so sobering. I have no savings. The planner kept talking about putting 30 percent of your assets into this or that thing. Well, 30 percent of zero is zero. — Chris
The truth is that Americans are saving less, not more.
It will take years for our government and institutions to find and scale solutions to the myriad of problems that underlie the retirement-income crisis. And as those most affected by the crisis, part of our job is pressuring them to do more and to do it faster.
But in the meantime, with no big interventions in the works, our immediate focus should be on what we can do for ourselves.
Saying goodbye to magical thinking
So where do we start? We start by dismantling the belief that if we just tough it out, things will return to normal. The truth is that we’re not going back. The normal we knew is gone.
In “normal land,” we could zig and zag, move, change jobs or spouses, try new things and still recover from our mistakes. We had time. Now, in our late 50s, 60s and beyond, we don’t have that time anymore.
“Normal” was when we had money and did not have to weigh our every decision against its affordability.
Normal was before we knew anyone trapped in their homes, unable to move because their mortgage was underwater.
It was before we were outsourced, merged downsized, rifted and surplused.
In normal land, the “sharing economy” had mostly not been invented yet. Instead, there were good IRS W-2 jobs with pensions and benefits.
In normal land, we measured our worth by our incomes, props and credentials. For some of us, working hard assured a nice retirement “dessert” of travel and kicked back living.
Normal was when we weren’t worried about our children’s futures. As one friend put it, we figured we’d done our jobs if our adult children were employed and could afford their own therapy.
Normal land had material perks too. There was stuff and more stuff. Back in those days, designer labels mattered more than the factory workers who made those labels.
Before marketers coined the term HENRY, or “high earners not rich yet,” there were yuppies and buppies. A good life of achievement and acquisition was what most of us aspired to and sought.
Magical thinking is believing that the old normal is coming back.
The new normal of financial vulnerability
Right now, depending on your work situation or bank account, you may feel like a tourist in the land of the poor people. At this stage, your main goal is to avoid getting trapped and having to take up permanent residency there. It is a paralyzing thought. I know.
This happened to me in my 40s, and it took me a good 10 years to get back to a normal wage. It took periods of working three jobs at crummy wages and doing whatever I had to do to keep going. The truth is, your friends don’t notice the struggle, because they fear it will happen to them. Decide who your genuine friends are, and come clean to them. If nothing else, it will help to talk about it and frees you up from pretending. This is more widespread than most people think. — Linda
You see friends who used to be at or near the top of the food chain off ramped with no clear path back to normal. You see it in their faces. It’s like they have dematerialized.
Most of the women (and men) I worked with who suffered a similar fate never seemed to quite get back to where they were even though they worked as hard as I did and even in the booming tech market. And I pretty much expect every day that this could happen to me again, no matter how hard I work or how many points I put on the board. The worst part is the isolation. This is the first time I have ever let on how bad it was (is), and it still feels extremely risky to do so in a valley rife with swagger. — J
And you know that if it happened to others, it could happen to you. No longer in denial now, you actually begin to contemplate what would happen if the bottom totally fell out. What would you do? How would you survive?
And millions of us aren’t contemplating it—we’re living it.
I am at the 15-year mark of my uphill climb out of my hole. I am living tiny, but it is mine, and I am able to live within my means. — Lesa
Many of us won’t be making the money we’re used to making. For the first time, we will be facing the prospect of significant downward mobility, with our accustomed earnings cut by 20, 30, 40 percent—or more.
I never had to resort to food stamps but was headed that way and am still rattled to the core by that. — Linda
And the truth is that if we lose our jobs in our 50s and 60s, we’re unlikely to be reemployed at the same salaries we had before. This is even true for those whose career choice privilege has, until now, firmly established them in the high five- or six-figure salary range.
Sure, a few of us will manage to find traditional W-2 jobs paying that long bread like before. But many more of us can expect months or even years of unemployment that deplete our savings and shake our confidence.
And when we do work again, we’ll likely do contract work in the gig economy or some part-time jobs in new professions.
I am single, 64, getting Social Security and working whatever jobs I can find that pay the bills. I’m finally in a job I like now, but it has taken years to get to this place. During those years, I worked in factories, in retail and at a gas station, and I did home care. You name it, and I’ve done it. I’m tired of job hopping to survive. — Anita
I drive a school bus, have a class B CDL with a passenger/school-bus endorsement and feel lucky to have a job. I was a music-ed teacher. You gotta lose your pride and get out there and start somewhere. I am 57 and was married to a doctor for 20 years, and I got divorced 16 years ago. Pull up your big-girl pants, and take whatever job(s) you can find. — Mary
Some people start entrepreneurial ventures to try to make ends meet. Whatever we do, we’re looking at a lot less money to live on at least in the short term—and maybe forever.
That’s why a big first step in securing our futures is adopting live-low-to-the-ground mind-set which means that we have to drastically cut our expenses to fit our new income realities.
I know, I know … that sounds easy peasy. You’re thinking, how hard could it really be to live within your new means?
It’s true that reality forces most people to make the needed changes eventually. But that click down from the standard of living that you assumed you’d always have to one that is much more modest is … well, it’s an adjustment. And it’s a big adjustment if you were living large and are now scrambling just to cover the basic necessities.
But a downgrade in lifestyle is not hard only for the people who were doing well; it’s hard for everybody. The truth is that most folks just don’t have that much of a cushion. A recent Pew Charitable Trust Survey of American Family Finances found that “the median household does not have enough in liquid savings—money held in checking and savings accounts, unused balances on prepaid cards, and cash saved at home — to replace one month of income.”
And the average family in the lowest income quintile is even worse off, with less than two weeks of financial reserves—or, to be exact, enough to cover about nine days’ worth of expenses.
So as we look into the future, the key question will not be how to tighten our belts or live within our means in the conventional sense. In the new normal of financial insecurity, a lot of us are already doing that.
The real question is can we cut way back and still have good quality of life, still find ways to be connected to who and what we love?
I believe that the short answer is yes. But to have a shot at something other than being old and poor in America, we can’t just do what we’ve always done and be what we’ve always been. The world as we knew it has changed forever. And if we want better futures, we’re going to have to change too.