Old age is not turning out the way some expected. Just ask the new generation of “workampers”—seniors who live in RVs or trailers and travel the country in search of work to supplement any Social Security or retirement savings they might have.
All too many of them have no savings at all and are dependent on a migrant lifestyle even in their 70s, with most older people—workamping or not—fearing illness or injury even more than they fear death.
And the jobs they’re able to get? Walmart greeter. Campground caretaker. NASCAR usher. Security guard at a Texas oil field. Migrant harvester. Packager for Amazon’s Christmas rush. Hourly jobs that are part time and lack benefits.
So says a Washington Post report about the new realities of old age in America, which takes a hard look at the realities most seniors face even as wealthy seniors seem to have it all.
Nearly 20 percent of seniors 65 and older have no other source of income than Social Security, and for more than 33 percent it makes up at least 90 percent of their income, while for more than 50 percent it makes up more than 60 percent of their income.
Yet it’s lost more than 30 percent of its purchasing power since 2000, with no recovery in sight—particularly under the current administration. It’s now less than the minimum wage, in fact, with the poverty threshold at $16,240, the average Social Security benefit $27,120 and the federal minimum wage $30,160 per year.
Nearly 30 percent of households headed by someone 55 or older, says the report, have neither a pension nor any retirement savings, according to a 2015 report from the U.S. Government Accountability Office. One out of five have no savings at all.
As a result, more seniors than ever are postponing retirement. Back in 1986, 10.6 percent of the population over 65 was still working; by 2000, that had increased to 12.5 percent. But by 2016, it had hit 18.6 percent and is still rising.
“There is no part of the country where the majority of middle-class older workers have adequate retirement savings to maintain their standard of living in their retirement,” Teresa Ghilarducci, a labor economist who specializes in retirement security, says in the report. “People are coming into retirement with a lot more anxiety and a lot less buying power.”
But another segment of the population is doing a lot better, with enough assets that the two recessions that destroyed most people’s retirement accounts haven’t harmed them enough to notice. Says the report,”[R]ich older people are doing better than ever. Among people older than 65, the wealthiest 20 percent own virtually all of the nation’s $25 trillion in retirement accounts, according to the Economic Policy Institute.”
It adds that the move to 401(k)s from pensions that used to provide guaranteed benefits for life has also benefited the wealthy, “who not only have the extra cash to invest but also use 401(k)s to shelter their income from taxes while they are working.” But the average American finds 401(k)s confusing and fails to use them to their advantage through lack of understanding—and fees.
Ghilarducci, who teaches at the New School in New York, points out that the new system does not serve the average American well. In the report, she says, “It’s as if we moved from a system where everybody went to the dentist to a system where everybody now pulls their own teeth.”
And about those fees: retirement consultant Ted Benna, credited with creating the modern 401(k), calls them “outrageous.” In the report, he says that many people, especially those who need the money the most, don’t even know they are paying them. But Wall Street certainly does; according to the Center for Retirement Research at Boston College, brokerages and insurance companies that manage retirement accounts earned roughly $33 billion in fees last year.