Getting Old

Janet Clark is retired and wondering what she is going to do now that her income took a hit because her one pension check stopped coming. The pension plan is from the time she worked at R-Way in Sheboygan, WI. The pension came from the Local 800 Furniture Union.

She received a letter from the union telling her that due to funding and pension shortfalls that she will no longer be receiving money from the pension fund. That means she won’t be receiving $231 a month.

“I planned on getting so much from that pension fund and counted on it to be there for me. I called the union and I am waiting for them to get back to me. I just want them to explain it to me in a way that makes sense,” Janet said.

Her case is like a lot of retirees that learn that the pension benefits they were promised aren’t what they expected when they retire.

The hard part for Janet is finding the extra money to make ends meet. She did the budget cuts that help make up for the lost income. She looked to the government for some assistance, but she has too much money because she is about $900 above the poverty line.

Being above the poverty line means that Janet will not receive assistance for her healthcare and housing expenses. But she was hesitant to even see if the government could help her.

Getting a job at 68 isn’t a reality for someone that can’t stand for extended periods of time. There aren’t a lot of places she can work, even if she could work for a couple of hours.

Her body has the normal aches and pains of repetitive work, but some of her joints don’t work the way they used to, and her knees need some help from the surgeon’s hand to make them work better than they are working right now.

Medical bills are part of Janet’s life, but on a fixed income, these bills aren’t easily paid. The lost income from a pension that doesn’t pay isn’t helping her.

What to do?

She put off the surgery her aching knees because she can’t afford to pay all the bills she has now.

Janet can expect to pay $180,000 in healthcare cost during her retirement, if you divide the cost of $260,000 in half, according to Fidelity. That means that Janet can expect to spend $8,572 a year of her own money.

“When I was young, I didn’t worry about retirement because I worked at a place that offered a pension through the union. I feel the union sold me a package of lies,” Janet said.  

Janet did start a 401k after R-Way closed their doors and she found a different job. She didn’t think about a place that offered a matching program, but she took the job that offered a good paycheck. She only regrets not starting a 401k retirement plan sooner, because she didn’t save enough money for retirement. Her medical bills wiped out her savings.