A lot of people are living paycheck to paycheck. About 3 in 10 Americans (28 percent) have no emergency savings, according to Bankrate's Financial Security Index, released earlier this week. That means they don't have money readily available in a checking account, savings account or money market account for emergency purposes. Just one out of four people do have enough money to cover six months' worth of expenses or more.
How does it shake out among retirees?
- Eighteen percent say they have no emergency savings.
- Thirteen percent have some but less than enough to cover three months' expenses.
- Another 13 percent have enough for three to five months' expenses.
- Forty-two percent have enough to cover six months' expenses or more.
- Fourteen percent don't know or refused to answer.
I'm not sure how retirees may have perceived the question. Did they distinguish their emergency fund from their retirement nest egg? I hope so. If not, many retirees are living Social Security check to Social Security check.
On the verge of homelessness
Last fall in the first installment of a retirement horror story, I wrote about my friend Jeanette who'd been evicted from the condo she owned outright over a plumbing bill she didn't feel was her responsibility to pay. As the movers hauled her belongings out into the parking lot, she was Baker Acted -- involuntarily committed to an institution for mental evaluation. During her weeklong stay, she was held down and injected with drugs against her will on at least three different occasions that I know about. The experience left deep scars.
After she got out, she thought she found a cheap rental, but it turned out that the $410-a-month apartment deal fell through. With just $15,000 to her name back in October -- call it her emergency fund/nest egg -- she found a place to live for $650 through a rental agent -- the cheapest rental around in Broward County, Florida. But with an income of less than $1,000 a month, it's unaffordable for her.
The other day, she told me that she has less than five grand left, enough money to cover her rent until about October or November. At that point, she's worried she might get evicted and thrown into a locked ward again. She asked me if I thought she could get her rent payment down to a more manageable level. I told her rents usually go up, not down.
I described Jeanette's situation to a Certified Financial Planner at the National Press Foundation's Retirement Issues program earlier this month. "She has to be careful because she's very vulnerable and can be a target for abuse … as a result of being single, near or at poverty, financially unsophisticated, and experiencing some cognitive difficulties," says Eleanor Blayney, founder and president of Directions for Women, a consulting firm that focuses on empowering and educating women about their personal finances.
Blayney suggested that Jeanette might be eligible for social services, probably food stamps and legal assistance. I called the Aging & Disability Resource Center of Broward County and was given a phone number to the Center for Independent Living, a nonprofit that helps people with financial constraints find a roommate or an affordable room to rent.
But that's about all the resource center could offer her. There's a three-to-five-year wait for Section 8 subsidized housing (Jeanette did apply at a couple of them last fall), and the county offers no emergency housing. I do know of a couple of places in Fort Lauderdale where a van comes around daily to pick up homeless people looking for food and shelter for the night. Jeanette will never be ready for that.
Jeanette is an artist who worked as a part-time art teacher during most of her career. She uses mixed media, acrylic paint and collage to create objective abstraction and nonobjective abstraction, she says. (I took a couple of snapshots the last time I visited her, shown below.) The former owner of a gallery in Naples, where Jeanette kept a considerable body of work, passed away in January. The niece handling the estate contacted Jeanette to pick up her pieces, but twice Jeanette canceled at the last minute. Among the reasons: She doesn't have the space to keep it. Her apartment is already jampacked with her work.
I told her she should apply for a job at Publix, the big grocery chain in these parts, which is good about hiring disabled people and seniors.
"Hey -- I would do it if I had to," I said. "There's nothing wrong with it." Besides, Publix is a private company, and its stock has appreciated nicely over the years.
"No," she said. "I don't want to bag groceries. I want to sell my artwork."
"That's a good long-term goal," I replied, "But you need to do something in the short term to either increase your income or lower your expenses."
Yesterday, I asked Jeanette if, during her working years, she ever did any retirement planning.
"I'm asking because I blog about retirement, and this is what I think about all the time," I said apologetically, knowing I was hitting a sore point.
"No," she said magnanimously. "I worked some part-time jobs but never made enough to put some money aside."
"You're not alone," I told her.
Small comfort, that.