RICHMOND —
When you reflect on the country’s Great Recession, what are the most important topics that come to your mind? Would it be high unemployment, record numbers of home foreclosures, or increased numbers of adult children living at home with their parents? Have you stopped to think another serious consequence of the recession – those retiring into poverty?
Consider the following scenario describing one of many loyal and hard-working employees across our country and then imagine how it will impact the retirement plans of many U.S. workers nationwide.
Our fictional character’s name is John. He worked for a business that was devastated by the Great Recession. John’s employer decided to close the location at which John worked in 2008, leaving John and hundreds of his co-workers suddenly unemployed. John was sixty years old and had worked for the company for the past twenty-five years. He held a college degree, worked his way up the ladder, and earned a salary of $65,000 per year. John was planning to retire in five more years using the nice nest egg he had built for himself.
Fast forward five years to 2013. John depleted all of his unemployment insurance benefits and now works as a customer service associate at a business located an hour from his home. Although John submitted hundreds of cover letters and resumes, it took him three years to finally land a job. Although he’s thankful for his current job, he is only able to earn half of his former salary.
John’s unemployment benefits were only a fraction of his previous salary, so he began making withdrawals from his retirement account to pay his mortgage and monthly payments immediately after his layoff. John attempted to sell his home after a year of unemployment, but no one was buying and the value of his home plummeted after the town’s largest employer closed its doors.
John now believes he’ll never retire because his retirement account is quickly depleting. When he lost his job, he also lost his health, dental, and life insurance policies. This means that when he had to have his gall bladder removed and a root canal performed, he was responsible for paying all of his medical and dental fees, doctor bills, and prescription medicine costs. John didn’t what to do, so he used his retirement savings to pay bills.
John’s health is suffering from the long work hours and the constant stress. His car is falling apart from all the driving he has to do to maintain a job, plus he spends a substantial portion of his income on gasoline to drive back and forth to work. John doesn’t have life insurance and can’t afford a new policy. John is not alone and his story is not unique, but we can learn from his situation. Stay tuned to next week’s column to learn what John could have done differently to have avoided his current situation.
Jennifer Napier is the owner of Jennifer Napier Career Consulting. Find her on Facebook: JNCC4U, or visit: www.jncc4u.com
Lifestyles & Community
Working towards retirement while in poverty
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