Survey shows that about two out of every three boomers face an unfavorable retirement situation.
The Great Recession saw unemployment rates double and a housing bust that proved far stronger and lasted much longer than anyone had expected. Through it all, retirement savings plans took a major hit.
The economy is improving. 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. 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 Florida 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.
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.’ ’’
Working toward a comeback
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.”