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THE TIGHT WIRE ACT OF LIVING
ONLY ON SOCIAL SECURITY
LIVING on an inflexible budget, one that teeters on the
brink of poverty, is not what most people equate with
retirement. But that is pretty much what anyone who
lives solely on Social Security can expect.
According to the Social Security Administration, 23 percent
of married couples and 46 percent of single people receive
90 percent or more of their income from Social Security.
Furthermore, 53 percent of married couples and 74
percent of unmarried people receive half of their income
or more from the program.
Such statistics represent a group of people forever trying to
make ends meet at a time when their health may be
declining, their friends dying and their ability to do things
not what it used to be. According to a report by AARP,
the lobby for people older than 50, three out of five
families headed by a retiree over 65 had no retirement
savings.
“It gets hard for a lot of people to imagine getting along
on just the Social Security check, but obviously millions of
people are doing it,” said David Certner, legislative policy
director for AARP. “They’re really living month to month
and relying on that check. Some people have a paid-off
home, but they’re still dealing with upkeep, insurance,
taxes, plus utilities and health care.”
“I have to be really careful with my check,” she said.
“Usually every other month I can go to the grocery store
and spend $130 to $150. I buy a lot of freezer things.
I’ve been a diabetic for five years, and I can’t eat a lot of
things.”
She says that it is the unexpected expenses that are
difficult to manage. In August, she had to pay $72 to get
new license plates for her car and $28 to change the
address on her driver’s license. “I would have been all
right if I didn’t have to buy the tags on my car,” she said.
Ms. Flatley is part of one of the most vulnerable groups:
older single women. According to an AARP report,
women are more likely to live in poverty in retirement
than men across all ethnic and racial groups.
Another typical situation is the one Greta Morrison, a
former insurance claims administrator, found herself
in a few years back. She had a paid-off house 12 miles
from downtown Indianapolis. But she never had more
than $4,000 in the bank, and her $1,100 a month Social
Security and $200 pension from the Travelers Insurance
Company did not cover her expenses.
“I was cash-poor and dirt rich,” she said. “I was having to
use my home equity loan to pay for home expenses, my
taxes, my nursing home insurance.”
With an average monthly payment of $1,200 per
individual (the actual amount is determined from one’s
earnings record), nobody is getting rich on Social Security;
that’s $14,400 a year, not much above the federal
individual poverty line of $10,890, and payments aren’t
adjusted by regional differences in the cost of living.
Mrs. Morrison, 81, sold the house this year and rented an
apartment in St. Petersburg, Fla., to be closer to one of
her daughters. Her son, 52, is unemployed and lives with
her.
Modest as that average income is, someone would need
about $300,000 to buy an equivalent annuity with a
built-in cost-of-living increase, Mr.Certner said. Few retirees
have savings like that.
“Money is a definite concern every time I break a
twenty,” Mrs. Morrison said. “I can’t be cavalier about
money. I don’t eat out, but I had a lot of years of eating
out. I don’t subscribe to a lot of magazines. I don’t buy
clothes, but I don’t go anywhere I need them.”
Sue Ann Flatley, who lives outside Tampa, is an example
of what it is like to live almost entirely on Social Security
with no savings and no house to sell if need be. Ms. Flatley,
72, stayed home when her children were young, but then
worked for 30 years before retiring as a certified nursing
assistant at age 65.
Divorced with three children in their 40s, Ms. Flatley
receives $890 a month in Social Security. Her rent, in
subsidized housing, is $128 a month. She has two bills, one
from a clothing store credit card, the other from medical
expenses from a hip replacement, that she is working to
pay down at $50 to $100 a month. Then there are her
regular expenses, like phone, cable, electricity and trash
collection bills.
Yet selling the home was a great relief, she said, even
though such a step is undoubtedly traumatic for others
in her situation. When all the bills were settled, she put
$130,000 in the bank. After years of struggling, she rented
a condo on Snell Isle, a nice neighborhood in St.
Petersburg, that consumes most of her Social Security
check.
“I make it now because I sold my home,” she said. “My
apartment costs more than I can afford, but at 81,
I figured why not?”
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