Maureen had a tradition with her third grade class. Each year, she and her students would read The Keeping Quilt by Patricia Polacco and spend the afternoon working on a craft related to the story. Students would decorate their own fabric squares—and Maureen would sew them together. She kept each quilt long after each class graduated.
The 66-year-old taught at elementary and middle schools for over four decades.
“It didn’t pay much, but it was a wonderful job,” she told Business Insider. “I was very lucky to have it.”
Maureen – who uses her first name for privacy reasons – lost her teaching job in 2020 when the Catholic school where she worked closed due to lack of funding. She felt “blindsided,” she said.
Maureen currently lives on monthly Social Security payments of $1,601 in northeastern Pennsylvania, according to bank records viewed by BI. She lives check to check and struggles to pay her bills. And although she is just months away from the federal retirement age of 67, She wonders if she needs to look for a new job.
She estimates she has $180,000 in the 401(k) account she built over her long career. After taxes, that will be about $144,000. She could use the money now, but hasn’t spent it yet because she’s worried about whether it will last for the rest of her life.
Americans like Maureen face difficult retirement decisions. Some, thanks to good savings and smart investments, have the $1.5 million that Northwestern Mutual says most Americans need for a comfortable retirement. For others, the steady income from Social Security is not enough to afford basic needs.
More than half of baby boomers have a pension of $250,000 or less assets, according to a report by the Institute for Retirement IncomeMany older people wonder when the right time is to use their savings or benefits – and whether the assets they have accumulated will be enough to live on.
“I’m trying to wait,” Maureen said of her 401(k) savings. “I think to myself: If I start using it now, what if I live to be 90? Then I’m going to be in trouble.”
Maureen is struggling to make ends meet but is “afraid” to use her 401(k) savings
Maureen feels like she has struggled with money issues for most of her adult life. Her husband died unexpectedly 22 years ago and she was left to support her two young daughters on her own.
Although she said her teaching salary was often around $42,000 a year, Maureen often had to take two or three part-time tutoring jobs to make ends meet. It was sad that she would be able to spend less time with her children as they grew up, but she had to put food on the table, she said.
Maureen has received other benefits and income over the years, but nothing permanent.
Her husband’s Social Security money went primarily to their daughters when they were young, she said, but she recently learned that his employer closes its pension scheme. Maureen expects to receive a small amount of money, but not enough to substantially cover the bills.
She doesn’t have her own teacher’s pension because her private school stopped offering them in the 1990s and started a 401(k) pension instead, she said. And during the pandemic, she only received unemployment benefits for about a year.
With her only reliable source of income being her Social Security check of $1,601 a month, Maureen lives on a tight budget, and her list of expenses seems long: cell phone, Wi-Fi, Medicare fees, car, gas, and unexpected house or medical bills.
She and her husband bought their home in the 1980s and the mortgage is paid off, but Maureen said utilities and insurance on the home are expensive.
Her electric bill can be $500 or more each month, she said. She tries to keep her heater temperature below 13 to 15 degrees, even in Pennsylvania’s frigid winters.
Maureen said she receives $23 a month from SNAP for groceries — which doesn’t go very far. She frequently cooks large batches of soup that she can eat for several days and buys foods like pasta and tomato sauce in bulk when they’re on sale.
She doesn’t tell most people around her that she receives government assistance. Her finances can feel isolating: she often has to turn down concerts and restaurant invitations. with friends because she can’t afford it.
Although Maureen knows she needs money, she is “afraid” to touch her 401(k) account. She plans to wait a few more years before touching her savings, perhaps when she turns 70.
“Unless I have to do it first,” she said, “and that may be.”
Are you living on a fixed income in retirement? Have you experienced stigma or loneliness associated with receiving government assistance? If you are ready to share your story, contact [email protected].