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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