Prior to 2019, Diane, who asked that her last name be withheld for privacy, owned a small business focused on learning and development and said she was able to earn enough income through her business to cover her expenses. her daily routine – and then some.
But when the pandemic hit, she was forced to close her business and couldn’t find any source of income for about two years. This forced her to take money from her 401(k) and savings account because her husband’s salary was not large enough to fully support the two of them.
Now, Diane has no money in savings—and she doesn’t see her situation improving until she retires in just under two years. (Business Insider reviewed documents from Diane to confirm this information.)
“I’m between contract jobs and have no savings,” Diane told BI. “I’ve been someone who’s done very well and it’s very depressing because I have no idea what’s going to happen with retirement. My husband and I are both a year and a half away from retirement age, but I think maybe we will I have to work until I die because there is no money”.
Diane is part of a group known as “peak boomers,” or boomers born between 1959 and 1964 who will begin turning 65 this year. A recent report from the Retirement Income Institute of the Alliance for Living Income found that this group includes over 30 million boomers, marking it as the “largest and last cohort” of that generation to retire. .
The report found that 52.5% of boomers have $250,000 or less in assets, which could force them to deplete their savings and rely on Social Security benefits to stay afloat in retirement. But Diane said the roughly $1,800 she would receive in Social Security each month would not cover her rent, groceries and prescriptions, and she anticipates having to continue working to supplement benefits.
“It’s simple math,” she said. “You’re talking about retirement, you need about $4,000 a month, at least, just to cover expenses. Social Security alone isn’t going to cover it.”
Many older Americans are facing the same problem. According to the Census Bureau’s Current Population Survey, just over half of Americans over 65 have annual incomes of $30,000 or less, meaning that living on Social Security alone probably won’t cut it.
And with the Social Security fund set to dry up by the late 2030s if lawmakers don’t step in, Diane is “extremely scared” for her future.
“The costs are huge,” she said. “To be a contractor, I have to have Internet. I have to have a cell phone. I have to have an office, which I can still deduct on my taxes, but immediately I have to pay for those things.”
‘Everyone my age is a bit worried now’
While Diane has years of experience in the workforce, she has not been able to land a full-time job despite applying for dozens of jobs. The only full-time jobs she has seen have tended to be more physically demanding, like working in a grocery store, which she is unable to do.
She said many of her peers are struggling with the same dilemma — they either can’t find work in fields they’re qualified for or have to work a low-wage, entry-level job.
“The only people who are hiring older people now are places like Home Depot and Walmart,” Diane said. “I just tell my friends as a cautionary tale, if you’re my age and you have a job, you’d better stick with it because nobody’s going to hire you.”
According to an October post by AARP, “age discrimination often prevents older adults from finding work at the same level as their last employment or higher.” AARP also referenced a September survey by The Harris Poll that found 60% of hiring managers prefer to hire older candidates over younger ones for entry-level positions because they tend to be more reliable.
However, with the low wages and sometimes physical demands of entry-level work, it is often not an option for those nearing retirement. AARP recently released the results of a January survey that found that one in five seniors have no retirement savings, and more than half don’t think they will have enough money to see them through to retirement.
“Everybody my age is a little worried right now,” Diane said.
“I know so many people my age who just don’t know what they’re going to do,” she continued. “Other countries take care of their seniors and we should be able to do that too.”
Worried about retirement? How are you preparing? Share your story with this reporter at asheffey@businessinsider.com.
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