Profile: Bev
Bev, 51, says she is “counting on” Social Security for her retirement—just as she has already counted on it throughout her life. When Bev was 18, her father, the family’s sole wage earner, died, leaving Bev and her mother with Social Security’s widows and survivors benefits to keep them financially stable. These benefits helped send Bev to college, something her mother could not have done on her own. (Note: Social Security no longer pays benefits to survivors over 18 and in college.)
After having a child and working for a short time as teacher, Bev started a career in retail and human resources management. Her first management job, at age 30, provided a defined benefit pension that would have vested after 10 years of employment. But because the job required frequent travel, Bev left after seven years in order to spend more time with her daughter. Despite her seven years of service, Bev received nothing from the pension.
When she was 38, Bev started contributing to a 401(k) (defined contribution) plan. Many of the jobs that she has held since have either not matched employee contributions to the plan, or have not offered a 401(k) program at all. Her current job used to match her 401(k) contributions dollar for dollar, but due to the economic downturn, the company recently cut that match by half, significantly reducing the amount Bev can put away for her retirement.
Bev’s 401(k) nest egg now totals approximately $40,000, but she has lost about 8 percent of her account during the past year: “Almost every dollar I put in this year, I lost.” Her husband, whose work history has been much more varied than hers, has a much smaller pool of retirement savings in addition to a small government pension. At 51, Bev, like so many other women her age, is facing the fact that she will be dependent on Social Security in her retirement. Bev’s Social Security benefits estimate shows that her retirement benefit will be $1,600 a month at age 65, providing a significant part of Bev’s retirement income.
Social Security’s family protections have come full circle for Bev and her mother. Bev is now a full-time caregiver for her mother, Kate, age 87, who lives in an apartment attached to Bev’s house in New Hampshire. Bev’s job is flexible enough that she can work full-time while providing care for her mother, but she subsidizes her mother’s rent and some living expenses. Kate lives off interest and dividends from her savings, a small pension from her late husband, and Social Security. Without Social Security, Kate would have to live on about $12,000 per year, requiring Bev to provide much more economic support to her mother.
As a human resources manager, Bev advises her employees, especially younger employees, to put in at least as much in their 401(k) as the company matches. Though she has tried to save, she knows that Social Security will be the guaranteed bedrock of her retirement income, just as it is for her mother now.