White River Junction
John Pate, 63, who owns his own marketing business, said his retirement plan can be summed up in five words.
“Live long and die fast,” Pate said, who had just finished up a 9-mile outing with a local running club in Lebanon.
Pate said the traditional model of putting money into retirement accounts and leaving the workforce at 65 just doesn’t make sense anymore.
“It’s a different world today,” Pate said. “Fifty years ago, people were pensioned and could work a day or two a week. Those days are gone.”
He worries that stockpiling savings might entail decades of deprivation, without ever feeling truly secure.
“Today, if you end up in a nursing home, it’s $20,000 a month,” Pate said. “Even if you saved a million dollars, it would go pretty quick. It’s an issue.”
He said that, after watching his retired parents complain about boredom, he’s also not interested in the staid lifestyle of a retired person.
“I never plan to retire,” Pate said.
A recent Associated Press analysis of savings data from the Federal Reserve found that more than a third of households in their prime earning years have no retirement savings, and no access to traditional pension plans.
U.S. Rep. Peter Welch, D-Vt., was handing out frozen turkeys and bags of frozen blueberries as part of the Thanksgiving meals being donated to those in need at The Upper Valley Haven, a homeless shelter in White River Junction.
Welch said retirements are getting less secure, and that the trend is worsening. “Thank goodness for Social Security,” he said. “For many folks, that’s the difference between terrible poverty and getting by.”
But, driven largely by a long-term leveling out of the U.S. population, the Social Security Administration’s estimates are that the program will face a $500 billion annual shortfall by 2034.
Trump himself has broken with the Republican establishment, saying that he would not support cuts to the program.
“We’re not going to hurt the people who have been paying into Social Security their whole life and then all of a sudden they’re supposed to get less,” Trump said during a campaign stop earlier this year.
But Trump hasn’t been very specific about his plans for the program, and he recently appointed lobbyist Michael Korbey, who has advocated for privatization of the program, to head the transition team’s Social Security effort.
Welch said Trump’s election adds a new element of uncertainty to the mix.
“He has a lot of folks around him now who have been advocates for privatizing Social Security in the past,” Welch said. “He’s taken some positions I’m going to fully support. Big infrastructure plan. Protecting Social Security. I hope he follows through on that.”
Many of those who stood in line to receive food from The Haven on Saturday morning are also not saving for retirement — not by choice, but by necessity.
Alicia Vasquezi, a 28-year-old single mother of three from White River Junction, earns about $200 a week from 25 hours at her part-time job cleaning homes. She spends about $60 a week on child care, leaving little more for diapers and wipes, gasoline and her share of the rent on her subsidized housing.
“I’ve always lived day by day,” she said.
Clara Politano, 37, recently moved to Lebanon from Manchester because she thought it would be a better environment for her three children, ages 17, 12 and 10.
She keeps a mental list of her financial needs.
“If I could afford it, I’d be buying clothes. Then, trying to work on my credit,” she said. “Retirement is the last thing on the list, to be honest. Unfortunately.”
Sara Kobylenski, executive director of the Upper Valley Haven, said Vasquezi and Politano are examples of a large number of Americans for whom retirement savings are a distant hope.
“People are living in the moment. They’re focused on survival today. Survival in the future is beyond the scope of what most of us can achieve,” she said.
She said that the traditional view of a home as a safeguard against destitution is also being challenged. The Haven has received several phone calls in recent months from homeowners who can’t afford to keep their house in livable condition.
“The deferred maintenance hits all at once,” Kobylenski said. “What should be their greatest equity instead becomes a liability. They call in despair. They say, ‘I don’t know what to do.’ ”
Financial shocks, such as a layoff, car repair or a divorce, happen to most of us. Six in 10 households experienced one over a 12-month period, according to a recent study by the Pew Charitable Trusts.
But when such shocks happen, lower-income households are less able to weather them without dipping into retirement savings or halting their contributions. Not only does that drain nest eggs, it also means people miss out on future gains their savings would have earned if they’d remained invested in the stock market.
Kobylenski also pointed to another disturbing trend that undermines the argument in favor of saving for retirement. She hears it all the time from struggling area residents.
“I’m not going to live long enough to worry about not having money,” they tell her.
The most distressing thing, Kobylenski said, is that many of them are right.
“How long you live past age 50 is highly dependent on your socioeconomic status,” she said. “The reality is that their life span is compromised also, and they’re aware of that.”
“The United States is experiencing a substantial widening of differences in life expectancy at age 50 by lifetime earnings,” according to a 2015 report from the National Academies of Science, Engineering and Medicine.
Census statistics from 2014 show that the bottom quintile of households earn less than $25,000 a year, (and have mean earnings of about $11,600) while the top quintile earn more than $115,000 a year (and have mean earnings of $194,000).
A 50-year-old man whose earnings are in the lowest quintile can expect to live for 26 more years; by contrast, the same man earning in the top quintile has a life expectancy of an additional 39 years.
For women, the story is the same — those at 50 in the bottom quintile of earnings will live an average of 28 more years, while those in the top quintile will live 42 more years.
But not everyone has given up on the traditional model of funding a comfortable retirement. The gauntlet is much more difficult to run than it once was, but the dream is still possible to attain.
Tammy Wilson, a 53-year-old medical assistant at the White River Junction VA Medical Center, said she is well-positioned to enjoy retirement, with a mortgage that’s almost paid off, and a plan to retire at 63.
She got there through 20 years of heavy investment into private retirement accounts, along with plans that include matching employer contributions from the VA medical center and Dartmouth-Hitchcock Medical Center, her previous employer. She said she looks at the balance every week, and thinks about the future it promises.
“I want to enjoy life,” she said.
Then there’s Mary and Travis Peters, who married 3½ years ago and are still settling into their careers.
Travis, 26, is pursuing a master’s degree in computer science at Dartmouth College, while Mary, 25, just began working at the Frances C. Richmond Middle School in Hanover.
“It’s my first real job,” she said, which has allowed her to begin a retirement savings account for the first time.
Though this is the first tangible step they’ve taken for their long-term financial health, they’ve been aggressive in managing their short-term debt, and have thought about it a lot. They attended an informational session at Dartmouth and have resisted the temptation to upgrade their lifestyle by moving into a more expensive rental home.
“We live like we’re college students,” Mary Peters said.
But Travis Peters said they’ve also talked about whether a full-time, long-term stint in the workforce is the right approach. They’d like to find the right balance, and only an ongoing conversation helps them find what that balance is for them.
But opting out of retirement and working until they’re dead isn’t on the table.
“The dream,” he said, “would be retiring tomorrow.”
Material from the Associated Press was used in this report. Matt Hongoltz-Hetling can be reached at mhonghet@vnews.com or 603-727-3211.