Nina, 72, and her husband James, 68, retired in 2012 expecting to enjoy a comfortable retirement. However, an unexpected turn of events meant their retirement was far from peaceful.
The New England couple, who had retired with pensions after decades of public service work, never expected to endure lengthy hospital stays, lose two children, and struggle to buy a new car.
Although Nina and James acknowledge they have enough to live on and to renovate their home, they worry about their financial future as their pensions barely cover their living expenses. Nina recently started a part-time job at a hospital to help them be more financially stable. Both asked to use pseudonyms due to the sensitivity of their past work as civil servants.
“We’re not poor by any means, but at the same time, we thought we’d be able to live really well because of our retirement benefits and Social Security, and we have good health insurance,” Nina said. “But even with that, the inflation situation is out of control. We haven’t taken a vacation in eight years. As long as there aren’t any more major emergencies, we have enough money to get by.”
Millions of Americans across the country are worried about not having enough money for retirement. Some Baby Boomers told Business Insider that they’ll have to work into their 70s or 80s to cover everyday living expenses, while some Gen Xers and millennials say they’ve reevaluated their retirement plans or become more cautious with their spending. Some believe they could have made better financial decisions when they were younger, but that working 40 years or more should guarantee them security in retirement.
“When you read articles about baby boomers, they often say we’re all wealthy,” Nina says. “We’re not wealthy. We’ve worked hard, and I started working as a babysitter when I was 12. But we’re lucky, and we’re definitely better off than a lot of people.”
Retirement is not easy
Nina says her parents weren’t wealthy and she was expected to get married and become a housewife, but instead she earned a degree in social work, using loans she paid off 20 years later, married young but later divorced, and it took her son another 20 years to pay off his student loans.
Nina married James 35 years ago. Nina worked as a state social worker and then became a probation officer. James, who has a degree in criminology, worked for many years as a police officer and then transferred to a parole officer. He started working as a law enforcement officer at the age of 21 and worked nonstop for 36 years.
Nina said they both worked in dangerous conditions and long hours in the summer heat.
“Before, we didn’t have the luxury of working from home and telling our employers we were looking for a job that would allow us to balance work and life,” James said. “We had to prove ourselves and if we told our bosses we wanted to work from home this week, they would laugh at us.”
They both took early retirement in 2012, but Nina said she had to leave work earlier due to health issues. They both worked part-time as teachers teaching how to handle domestic violence cases. Nina returned to work as a concierge at a local hospital a few years ago to help cover living expenses and home repairs.
“Being police officers, we were able to retire early, had a great retirement plan, and health insurance was paid for,” James said. “Our job was pretty stressful. We carried firearms, we had to make arrests, we worked high-risk cases, and given our age, we were approaching job burnout.”
After decades of work, they both expected their retirements to be relatively easy — their children were grown, they had pensions and Social Security income, and they lived frugally — but the past few years have been particularly difficult financially.
Five years ago, Nina suffered a heart attack that eroded some of her retirement savings despite having health insurance, James was recently hospitalized with a pancreatic tumor, and now, in the midst of the pandemic, the family has been hit hard by the deaths of two of Nina’s three children.
“You think you have enough money and everything will be fine, but things happen in life,” Nina said, adding that she struggles to keep up with inflation. “We’ve worked so hard and now we’re being given so little.”
They lost about two-thirds of the money they were due in Social Security. Extraordinary income exclusion clauseThis will reduce Social Security benefits for some people who receive public pensions. James receives about $650 a month in Social Security from his private sector employment, while Nina receives just $32.
Managing retirement well
James said her state pension is about $40,000 a year but gets just a 3% increase each year because of a cap introduced more than a decade ago.
Their part of New England is “not a cheap place to live,” with high utility bills in the summer and winter, and James said he’s done a lot of his own landscaping and home renovations to save money. He’s also become more cautious with his purchases in recent years, cutting out unnecessary expenses.
Nina estimates that she spends about $1,700 a month on clothes, toiletries, and food for herself and her three cats. They frequent discount and low-cost grocery stores, buying only what they need and without waste. They do eat out occasionally, but Nina says they are often surprised by the prices. They pay for Netflix and Amazon Prime, but try to save where they can, such as limiting their cable TV bill to just 12 channels.
Nina said they recently purchased a 2014 model, the newest used car they could afford, and that they had seen five-year-old cars for sale for more than $30,000, but avoided them because of the high interest rates.
They’re still paying the mortgage on the home they moved into in 2011, and they’re spending a lot of money renovating the kitchen that was built more than 70 years ago. They refinanced their 1,400-square-foot home in 2020 at 3.9 percent APR, with six years left on the mortgage. They have some equity, and the homes they grew up in averaged more than $500,000, so they have no plans to move.
“We get a lot of compliments on how nice the exterior of our house is,” Nina says. “We’d be depressed if we didn’t have any comforts.”
The renovation cost about $48,000, and the payments are still coming in. James said he’s considering returning to work, even though he’s still tired from decades of work, while Nina works a “physically demanding” job, helping people in wheelchairs move around.
“We’re both really proud of what we have and aren’t the type to give it away,” James said, revealing that he hopes to pass it on to his son in a few years. “We’ve put a lot of money into this house. It’s nothing extravagant, but it needed to be maintained and looked good.”
They’ve also sacrificed vacation time – they haven’t taken a holiday in over eight years – but Nina said investing their disposable income in a home is the best use of their money.
“I want to go on holiday, but it’s more important to me to leave something behind for my kids,” Nina says.
Worried about retirement? Contact this reporter nsheid lower@businessinsider.com.
