It’s National Save for Retirement Week, a time when financial services industry experts offer Americans conventional advice for preparing for their golden years. However, saving for retirement isn’t as simple as these people would have you believe.
A growing number of Americans are struggling just to get by—let alone save for retirement. I should know; I’m one of them. There’s no such thing as a retirement for me.
As an adjunct professor, my wages are so low that I haven’t been saving for retirement. I’ll be working until they carry me out of my job. That’s what makes retirement terrifying for me.
Many of my colleagues around the country share my fears and retirement prospects.
Nearly a third of part-time faculty at our nation’s colleges and universities are living near, at or below the poverty line.
The old adage of spend less and save more doesn’t apply to us.
Although I’ve been teaching writing and literature at small Vermont colleges for more than 35 years, this year I will only earn $10,000. This makes it difficult to save for retirement or anything else. With the help of my modest Social Security income (which is about $900 a month) I just purchased my first home—a mobile home—last year. I’m 67 years old.
You see, saving for retirement isn’t as simple as opening an IRA at your local bank or diversifying your portfolio when you’re an adjunct instructor. In fact, this advice isn’t applicable to many working Americans in today’s economy.
Wealthy corporations have pushed down employee wages and benefits making it harder for the average person to save for retirement. They have also eliminated the pension plans that our parents and grandparents fought for decades ago.
As a result, the availability of retirement savings is often tied to income for today’s workers who have fewer savings options than previous generations. Nearly half of working-age households do not own any retirement account assets. Those of us who aren’t earning the big bucks are unlikely to have a retirement account. Those who do have retirement accounts have virtually no money in them.
According to the National Institute on Retirement Security, the median retirement account balance is $2,500 for all working-age households and $14,500 for near-retirement households.
If the financial services industry wants to help more working families prepare for retirement, it should acknowledge the old advice isn’t working.
Times are changing and so is my profession. Adjuncts around the country are standing together and forming unions to get better pay and benefits. We’re even winning retirement benefits for adjuncts, including those at my job, who didn’t have access to our employer’s plan.
I’m also hopeful that our approach to retirement planning will change too. Several states around the country have begun to address the retirement security crisis faced by low income families by creating plans for people who don’t have access to one at work.
Plans like the California Secure Choice Retirement Savings Program would help many adjuncts around the country achieve a simple, dignified retirement after lifetime of hard work and playing by the rules. Hopefully, Vermont lawmakers will pass a similar bill soon.
Also, more lawmakers need to do more to make it easier for our nation’s educators to retire by expanding Social Security to increase benefits. After all, teachers do very important work.