The Retirement Lie

This morning, the New York Times published an article called "Forced to Early Social Security, Unemployed Pay a Steep Price."  It tells the tragic story of Clare Keany, a resident of a mobile home park in Palm Springs.  Ms. Keany lives on just $1,082 a month in Social Security benefits.  This is despite the fact that she worked most of her life, earning as much as $64,000 a year.  She saved money and planned to work until she was 70.  Unfortunately, Ms. Keany lost her job and has been unable to find a full-time, permanent job to replace it.  A hard worker, she has been willing and able to work at a few part-time and temporary jobs in the past few years.  However, as she went through her savings, she eventually had to break down and begin to collect her Social Security benefits at age 62, much sooner than she had planned.

Ms. Keany is not alone.  According to federal government records, one-third of older workers who became unemployed between 2008 and 2011 have found it necessary to begin collecting their Social Security benefits early.

Many Baby Boomers feel that they were lied to about retirement.  They did everything they were told ... they found jobs with pensions, when possible; they paid into Social Security; they put money into retirement investments such as 401K's and IRA's; they made payments on a house; and they planned to work until they were at least 65 or 66 years old before they retired.

Then along came 2008 and the Great Recession.  Many government employees who had been promised pensions lost their jobs.  Private employers did away with pensions.  Other pensions were dramatically renegotiated.  Retirees who had saved for their Golden Years discovered that their private investment accounts had lost sizeable amounts of money.  Many people learned that the equity they had in their homes was gone; others simply lost their homes.  As a final blow, a number of older people have found themselves unemployed, often for the first time in their lives.  Once their retirement savings ran out, they were forced to start collecting their Social Security benefits at age 62 instead of 66.  When Social Security is collected early, it can cause the recipient to suffer at least a 20% reduction in benefits.

Baby Boomers feel, in many cases, that they were lied to.  They worked hard, saved money, bought homes and now far too many of them are broke, just as they reach retirement age.

If you have a story to share about your lost retirement benefits, please feel free to share it in the comments section.

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