Seniors without Savings – A Growing Challenge in our Society

Social Security acts as a safety net for many seniors. It often provides their main source of income after retirement, ensuring that their needs are met. 

Yet, an increasing number of seniors do not have sufficient support through Social Security. The effect can occur for various reasons, including having an unpredictable working life. As the nature of employment shifts and the population ages, the challenge is only likely to get worse. 

A Picture of Hardship

An article in The Atlantic highlighted the problem in stunning detail. 

In it, Alana Semuels talks about the case of Roberta Gordan – a 76-year-old woman who needs to work on Saturdays to earn enough extra money to survive. 

Like many people, Alana did not hold one steady job throughout her life. She had a pattern of odd jobs instead, which would have lasted for varying lengths of time. At some points, her job pattern would have allowed her to pay into Social Security, but not all of the time. 

Gaps between jobs created periods where she could not contribute to Social Security. This pattern has also meant that Alana does not receive a pension and has not earned enough money to save for retirement. 

There is nothing at all unusual about this pattern. 

The idea that people will work consistently throughout their life is simply unrealistic. There are many reasons why someone might not. Perhaps they left the workforce to raise children or to be a caregiver. Perhaps they moved around a lot or worked menial jobs. Others may have not been able to find work. 

At the time of the Atlantic article, Social Security and SSI provided Alana with $915 each month. Her rent alone cost $1,040 monthly and she’s been taking whatever approaches she can to make ends meet. 

While her issue highlights the importance of planning for retirement, the issues run much deeper than that. 

Alana’s lack of savings is not truly the result of insufficient savings or lack of planning. Instead, it shows the many challenges that are present in our current system – issues that mean many people end up struggling most of their lives simply to stay above water. 

When income drops due to retirement, the pressures of the system become too much. 

For some Americans, like Alana, such patterns mean that senior years can involve a substantial amount of financial stress and strain. 

Females are particularly vulnerable from such issues. They tend to earn less across their lifetime, as the result of lower pay and an increased likelihood to take time off for caregiving or childcare roles. 

Doing so leads to lower Social Security payments. 

Looking to the Future

It isn’t just the current generation of seniors that we have to worry about either. 

Gone are the days where you could expect to have a single career throughout your lifetime. Even people who land good long-term jobs at reliable companies do not have complete job security. These days you never quite know what is going to happen. 

Many people are turning to alternative ways to earn, like the gig economy or working online. Doing so has many advantages, but the fields don’t offer any retirement plans or offers of pension.  

This means that the current generations will need to focus more heavily on saving for retirement. They’ll need to find approaches that don’t rely on employer contributions. Ones that can withstand changeable careers and perhaps unconventional sources of income. 

These areas are where budgeting and having a savings plan kick in. But, those goals only go so far. As many people already know, saving for the future simply isn’t realistic when surviving in the present is barely possible. 

More than anything, the arising issues underscore key challenges in the current system for retirement savings. As jobs become less stable and there are fewer pensions available, many Americans will have less income when they retire. 

For many seniors, this would mean a dramatic shift in living style just so that they can survive. Even then, altering living style may not be enough. 

It’s clear that some changes are needed at the institutional level, changes that mean seniors do not become impoverized when they retire.  

The problem isn’t just one for individuals either. It has significant implications for society and the economy. As the Atlantic article points out, if seniors need to drop their spending dramatically when they hit retirement, the economy would suffer dramatically. 

Finding Ways to Improve Finances

Poverty is a challenging problem, especially when there are few options for increasing income. 

Thankfully, there are some approaches that people can take, such as looking for financial support, finding ways to decrease costs and even returning to work. 

Regardless of a person’s age, budgeting is one of the first important steps. 

Budgeting highlights the current balance of income versus expenses. It can also show the main areas where money is being spent. This information can then be used to work out more effective ways to use money, ones that can decrease costs overall.

Other relevant approaches include finding affordable housing for seniors, decreasing costs for new purchases, finding general discounts and prescription discounts, cutting expenses and changing spending patterns.