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A retirement horror story

By Barbara Whelehan ·
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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November 11, 2011 at 2:54 pm

GeargeLaw could be right. There are several legal remedies that might be pursued but these vary from state to state. If all else fails the HOA will probably owe Jeanette the difference between what she owed and what the condo is eventually sold for. (less taxes and other expenses incurred) This woman desperately needs a guardian and a good lawyer.

November 10, 2011 at 6:27 pm

I agree with Charlie H.

Charlie H
November 09, 2011 at 3:58 pm

This is a mental health issue and a family issue.
This is not a retirement issue.

November 09, 2011 at 8:50 am

Let's see now what we have here. Jeanette moved because she believed that the neighbors were gassing her. She is said to have delusional thoughts. She ignored a plumbing bill that escalated to $15,000 because she believed that the condo board was singling her out (persecuting her). She insists on living where she can cook her own food (does not want to eat food cooked by others?). She insists on maintaining a private automobile when her gross annual income is $10,800. Is this about "retirement planning" or about a woman who is mentally ill and so lacks competent social judgment? Her helpful friends are kind, but perhaps they would be kinder to steer her toward treatment. Appropriate medication and therapeutic support can address the delusions.

November 09, 2011 at 1:35 am

If this only happened 3 months ago, there is a possibility that Jeanette can redeem the property if she could get a loan for the $14K plumbing bill. The facts are scant, but there are probably many legal remedies she could seek, because it sounds like the condoboard may have engaged in some self-serving behaviour. There could be a problem with proper notice and other legal requirements necessary for a valid foreclosure. I have been a lawyer for 38 years and I just grit my teeth when I read these horror stories, as had the person been properly directed it is likely that most of the situations would have been resolved. I would still recommend that Jeanette contact legal aid or a senior service operated by the city/county/state, as it is likely that the action taken against her property could be overturn under several legal theories. If she is legally entitled to have her condo back, it is irrelevant that the other condo owners do not want her back. They have no legal authority to prevent it.

November 07, 2011 at 7:41 pm

Folks, it is not getting any better especially if your over 50. The economy is bad. Average folks, are struggling to survive. Many have been layed off from good paying jobs, and will never get hired again. Its time to pay it forward and help yourself and your neighbor, and your neighbors neighbor get a financial lifetline for all of them to hang on to. That requires some action on your part, the first part is to listen to this powerful 15 minute call, the second part is to leave a message and be serious about signing up. Its like having a private gold mine for everyone folks, get your share today and pass it along to others. Just call 503 389 2140, listen to the whole call. Your be happy you did for yourself and your family. This call could be the answer. 24hrs. call now.

November 07, 2011 at 5:48 pm

Where is the nightmare part?

W Atkins
November 07, 2011 at 4:40 pm

It is always a gamble. My Company United Airlines claimed bankruptcy and I lost my pension after twenty seven years of service. I will get a small portion of it from the PBGC at 67. Ps. The PBGC is millions in the whole. I don't plan on getting anything.

November 07, 2011 at 12:46 pm

This woman sounds lucky to have the writer as a friend. She was willing to let her condo be taken away, and become homeless, for not addressing plumbing bills. The story makes it sound like she suffers from paranoid schizophrenia. As mentioned by other commenters, this is not a retirement horror story, but a reminder that there are those less fortunate than us that are unable to handle their daily affairs. We can sit in judgment or we can try to help them before they become homeless.

November 06, 2011 at 11:54 pm

You are a brainwashed idiot and have never had an original thought