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A retirement horror story

By Barbara Whelehan · Bankrate.com
Friday, October 14, 2011
Posted: 2 pm ET

More than half (54 percent) of full-time workers from ages 21 to 64 participated in their employer's retirement plan last year, according to a report released earlier this week by the Employee Benefit Research Institute. Among all workers, including part-timers, the participation level was 40 percent.

That means a lot of people slip through the cracks.

The phenomenon extends overseas in England. More than a third of nonretired adults no longer pay into their plans, according to a Prudential survey. Nearly one out of three who don't participate (27 percent) say they just can't afford the contributions.

The fact is, they can't afford not to make them.

Frightening true story

What happens if you don't do any retirement planning and you have little savings to fall back on?

Let me tell you a story about my eccentric friend Jeanette, who many years ago received a Master of Fine Arts degree from the Hoffberger Graduate School of Painting at the Maryland Institute in Baltimore. During most of her career she worked part time as an art teacher. She's also a talented artist in her own right whose works are being sold by an art gallery in Naples, Fla., though she hasn't seen any proceeds from recent sales. She doesn't want to press charges against the gallery owner because if she does, she says, her name would be mud in the art community. "No, you don't understand the art world," she says each time the subject comes up.

Between her pension and Social Security, Jeanette's income amounts to $900 a month. When her mother passed away some 20 years ago, she left Jeanette her condo and a small portfolio of stocks, about $50,000 worth. Over the years, Jeanette slowly liquidated the stocks, spending the money on necessities. Six years ago, she sold her condo at the height of the real estate boom and bought another cheaper one outright for $85,600 in a different area. The reason for the move? She thought her neighbors were trying to gas her. Jeanette is plagued by delusional thoughts.

Three weeks ago she was evicted from her condo. While movers hauled her furniture and all her possessions to the parking lot, two police officers seized her, put her in a "cage" and brought her to the psych ward of a local hospital. She had been "Baker Acted," involuntarily committed for detention so that psychiatrists could evaluate her mental health. I received a call from her that evening. "Barbara, you've got to come pick me up. I have to get out of here," she said urgently.

It wasn't that easy. They wouldn't let me take her anywhere, not even to look for alternative housing. The hospital's case manager wouldn't talk to me until Jeanette signed a form, which Jeanette was reluctant to do. It took me a week to convince her to sign it. Her stubbornness is exasperating.

When we finally talked, I told the case manager that Jeanette didn't belong in a locked ward, and she didn't belong in an assisted living facility either. That was where the case manager was trying to place her. Jeanette didn't go along with the idea. She said she didn't want to eat prepared food in a dining hall; she wanted to cook her own food. And she didn't want to give up her Social Security check to live in a facility. That would mean she'd have no way to make car payments. And if she gave up her car, it would be like giving up everything.

A couple of days after I talked to the case manager, Jeanette was released. Our mutual friend Louise picked her up and took her to a nice, but inexpensive, hotel.

Why was Jeanette evicted? It turned out she had ignored a $6,000 plumbing bill, which over time, due to fines and penalties, escalated to $15,000. She paid her bills, but that one she had dismissed, telling herself she had been singled out by the condo board. There was no proof the leak came from her apartment, she'd told herself. She ignored the bills, and then years later, the eviction notices. In her mind, it was all a big scam.

Now she feels she's really been scammed. She lost her paid-for condo to the condo board in a foreclosure for a judgment of $11,337.20. Prices for comparable units are on the market for around $35,500.

Getting back on track

Over the past couple of weeks, Louise and I have been trying to help her straighten out her finances and find housing. Her stuff had been put into storage, paid for by her brother in New Jersey. Jeanette can't go back and live at the condo; the board won't let her back in. Apartment rentals seemed out of the question, at a minimum of $665 a month. Luckily, a friend of a friend found a one-bedroom apartment for $410 a month.

On Monday, Louise and I accompanied Jeanette to visit her broker, and she sold the last of her stock -- 461 shares of Merck, 12 shares of Comcast, and three shares each of AT&T and Verizon. She got roughly $15,000 from the sale.

Jeanette is living on the edge and it's only a matter of time before she runs out of resources. This is what retirement looks like without retirement planning, but who's to blame for this? She's always lived a frugal existence. She was lucky to get an inheritance. But one big unexpected bill -- and her inability to take it seriously -- were all it took to throw her life off kilter.

Do you have a horror story to share? Bankrate is running a Halloween Horrors contest and is looking for scary financial tales. The winner with the most votes gets a $200 award. A selection of stories will be published in a future Bankrate article. You can also enter via Facebook. The last day to submit a story is Wednesday, Oct. 19.

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42 Comments
Bill
December 05, 2011 at 10:57 pm

To all those posting that an HOA would like to foreclose on a condo: You are delusional. I am on an HOA board and that is THE LAST THING we, or any board would want. Where do you think the money would come from to buy the unit at foreclosure?
Have you no idea what foreclosing on a condo or a house means? It means that the other residents must come up with the total price of the unit sold at auction, less what is owed to the HOA. Please read up on an issue before posting completely false notes.

Charlotte
November 26, 2011 at 10:09 am

A mental health issue? Maybe not. How about waiting all her life for the knight in shinning white armour to take her away? There are a lot of women out there who have done this. Living a fairy tale like Cinderella. A lot of people don't know who Suze Orman is, and, really don't want to know. Because, they will be exposed to their weak thinking skills. Now who wants to acknowledge this weakness? I know an ecentric woman like this. No computer skills,70 years old,still cleaning offices to put money in her hands to feed 3 old plugs and 2 cows on 4 acres with 2 trailers,one of which is her sons. Son has no interest in helping mom's situation, and,she just complains how broke she is.
Its like talking to a stick.

P Crabshaw
November 24, 2011 at 12:52 am

There's a lot of money being made by condo associations that foreclose on a homeowner for missed dues, long before the bank gets a shot at it for missed mortgage payments.

Thankfully, Republicans in Washington are trying desperately to make Obama look bad while ignoring all other matters, since that will fix everything. I'm sure the GOP, which is supported quite heartily by the rich, puts the best interests of ordinary people first and will soon turn their backs on all their multi-million dollar benefactors. Starting tomorrow.

I know it's true, because I heard it from the tooth fairy.

Carla
November 21, 2011 at 2:12 pm

I think this article is more about mental issues and irresponsibility. Not really a horror story. I'm sorry this happened to the author's friend but I'm sure there are other people out there in more dire straits.

stewart
November 21, 2011 at 10:40 am

all home based ads are a scam. The effort and money resourced to a phone/website, are a waste of time/money.

nixliberals
November 18, 2011 at 7:35 pm

Most condos would love to get rid of the too-old quack this easily, though it took time. This is a very unfortunate tale of a downward spiral. Where was her brother before? It must have been too touchy to interveen.

Bookworm
November 17, 2011 at 7:17 pm

This "Retirement Horror Story" is really about the perils of retirement for those who are jinxed with poor mental stability. Folks with bipolar disorder, depression, schizophrenia, delusions, etc. fit in this category. This artist probably could not afford any mental healthcare during her life. If we had a national healthplan, she could have gotten treatment and this sad scenario might never have happened. A fast-track life, meaning a full-time job, is not something everyone is able to do. This is why we need a national health plan. Everyone is not created equal as far as mental health goes. The mind is part of the body and it can become ill too. (Oh the stigma!)

Rugratz2222
November 15, 2011 at 9:16 pm

boy oh boy ... the network marketing people are sure posting here today. Hey, I'd love to post my website selling Amway stuff, but this is the wrong venture to post into. People who post "this is the greatest/latest/newest way to make money" ... makes for little credibility when you have no idea what they do but they want you to call a number, visit an unknown website and/or listen to a speal or read a doc of high PR slicked up jargan and if it sounds too good to be true, it probably is. Any home-based business takes WORK, TIME and MONEY - let no one kid you. Some will work and some will not. No one can guarantee you success. What works for some people won't work for others. Markets get saturated and products can be expensive ... some requirements make you buy more for yourself to "keep a level" of commitment. Just beware and very cautious and very stingy with your money and time. Possibilities are endless but no get-rich-quick schemes exist out there, so it will take time AND effort. But some can be very profitable. Just be careful and choose wisely.

John West
November 12, 2011 at 10:56 pm

Folks, let me speak from my heart, there are thousands of people over 50 that cannot find a job, let alone retire. And those that have a retirement, need to supplement their income. Average familes today are struggling to survive. I'm 68 and found something that works and pays be daily via my cell phone, so I supplement my social security check, you can have a good income if your willing to work. You can do this part time 10-20 hours per week and make several thousand or more each month, anyone can do this. Just call 503 389 2140 and listen to the full 15 minute call. Your be happy you did for yourself your family and you can help many, many others that are in a financial bind and need a real way out folks. This call could be the Answer. Call 24.7 call right now.

GDOGNCBD
November 12, 2011 at 12:10 am

this is a good reason not to buy any property connected with a HOA or other so call association that can have you removed from your home for not paying any bills,fees or services they have requested its members to pay.