Baby boomers’ financial outlook turns bleak as retirement nears

The Great Recession saw unemployment rates double and the housing bust that proved far stronger and lasted much longer than many people had expected. Through it all, retirement savings plans took a major hit.

The economy is improving now. But for baby boomers who can see the finish line of retirement in the not-so-far-off distance, the race is on to rebuild — or start over — with their retirement plans.

The clock is ticking — loudly. Finding work still isn’t easy. Neither is finding safe investments with reasonable returns.

For Vilma Hart, 58, an unexpected layoff during the recession undermined her best-laid retirement plans.

“It was a rude awakening,” said Hart, a former corporate trainer and state caseload manager who was let go by the state in 2008. “I could not find a job for a year and a half. I exhausted all my retirement savings.”

Hart took a part-time job with the AARP Foundation in 2010 so she could scrape by with her bills and also watch over her elderly mother. She hopes to find full-time work, but also understands the challenges ahead. She has nothing saved for retirement now, and hasn’t yet been able to start saving again.

“I have to adapt,” she said. “I thought I had my ducks in a row but it didn’t work out.”

Hart is among the two out of every three baby boomers who are in some kind of unfavorable retirement situation.

Surveys spell out in detail the depth of the problem. About 63 percent of displaced workers during the recession dipped into their retirement savings to pay bills, according to a 2012 study by the nonprofit Transamerica Center for Retirement Studies. Middle-aged workers were most at risk, the survey found. Workers in their 40s and 50s had only a median $2,300 left in their retirement accounts.

Investment earnings for Americans 65 and over accounted for 10 percent of their income on average in 2006 Now, it’s only 6 percent, according to a separate AARP survey of 2011 trends, the most-recent year available.

“This is going to be a huge story for years and years,” Florida AARP spokesman Dave Bruns said. Many boomers “are in a world of hurt. You have to wonder what their options are. Many say, ‘I’m going to work until I drop.’ “

Sharon Hallback is 65 years old. She went back to school late in life and has two master’s degrees. She still can’t find the right full-time job to help get her back on her feet.

“They say I am overqualified,” said Hallback, who has stopped telling some prospective employers about her degrees.

Hallback was a counselor who was hired by a private company to make home visits to help special needs children. But in 2009, her mother became gravely ill and Hallback ultimately lost her job because she refused to give up caring for her mother. “I will never regret what I did.”

She went on Social Security at 62 to bring in a monthly check. Her retirement savings accounts had been depleted by putting her three children through college.

“I was a single parent,” Hallback said. “I had to pull out my money.”

She was able to find work at a juvenile program but has struggled since then to get by. She considers herself lucky that she got into an AARP program, working at a state workforce agency in Hollywood, Fla. Even with her Social Security benefits, making ends meet has not been easy. And saving for retirement? Out of the question.

Her warning to other baby boomers: If you think you want to get a part-time job to supplement your Social Security, realize it may be harder than you think to snag one.

“There are so many people looking for work — even part-time work,” Hallback said. “It didn’t use to be that way. But now there’s so much competition.”

To get to a comfortable retirement level, many baby boomers will have to reinvent themselves by working longer and resuming their saving — even if it means not financially helping their children and further shaving off living expenses, said financial planners and analysts who work with older workers.

Most who lost jobs will have to rework their budgets to still save for retirement with smaller paychecks, said Florida’s AARP director Jeff Johnson.

“Chances are they are going into a much lower salary than they had before,” Johnson said.

More in Herald Business Journal

Snohomish inventor makes changing beds magical

He hopes to make his big push in the hotel industry, where injuries to housekeepers are increasing.

Boeing planes designed for Alaska to make final flights

The special Boeing 737-400s carry cargo in the middle of the plane and 72 passengers in the rear.

Monroe’s Canyon Creek Cabinet names new exec VP

Mark Kovich has joined Monroe-headquartered Canyon Creek Cabinet Company as the executive… Continue reading

Century 21 North Homes Realty adds new agent in Lynnwood

Century 21 North Homes Realty has welcomed Adriene Crum to its Lynnwood… Continue reading

Longtime Comcast Everett employee travels to aid Houston

Lake Stevens resident and longtime Comcast Everett employee Brandon Johnson traveled to… Continue reading

Emory’s fun run raises $2,000 for Housing Hope, Beck’s Place

Proceeds from the 1st Annual Emory’s Silver Lake Fun Run on Labor… Continue reading

Happy accident leads Edmonds couple to make Hunniwater drink

The latest line of energy drinks by Karin and Eric… Continue reading

Single payer is no panacea for our costly health care system

We must address the cost of health care before designing an insurance system.

Voters are on the sidelines as the port fills a vacant seat

Troy McClelland resigned from the Port of Everett commission too late for an election before 2019.

Most Read