Fifty-percent of American retirees don’t have enough money to actually retire, forcing many of them to head back to work during what should be their golden years, a new report details.
In a new investigation from CBS, analysts say that there are 11 million Americans who are over 65 and still working.
CBS follows the Gessecks, a once-retired couple in Florida that are now back on the job to make ends meet.
77-Year old Garry Gesseck wakes up at 5:30am to unload trailers at a supermarket in St. Petersburg, Florida, for $14.75 an hour, while his wife Joyce, 66, makes $14 an hour working full-time as a legal administrator.
Says Joyce,
“It’s not really a retirement… It’s working every day.”
Labor economist Teresa Ghilarducci blames the surge in failed retirements on the 401(k), which was introduced in 1978 as an alternative to the traditional pension system.
“I call it the ‘work, retirement, repeat syndrome.’
More than half of the people who are retired right now do not have enough money to be retired…
I blame the policymakers, who experimented with our retirement system 40 years ago, and they are not saying the experiment failed.”
The effectiveness of the 401(k) has been called into question as of late, especially for lower income cohorts whose retirement savings arguably don’t keep up with inflation.
Citing data from the Federal Reserve, Politico reported that when adjusted for inflation, retirement accounts for virtually everybody except the highest earners have remained flat for decades.
Former Federal Reserve economist Alicia Munnell told Politico,
“I am persuaded that these are bills designed for the high-earners and stuff for middle- and low-earners gets put in along the way to make the legislation less shameful.”
As for the Gessecks, even with social security, old pension funds and their paychecks, the couple ends each month with about $50 left over.
“It’s stressful now, but I think we can see the light at the end of the tunnel.”