'I’m never going to be able to retire.'

At age 58 and less than a decade away from retirement, Nancie Eichengreen, found herself having to start over from scratch.

It was 2012 and she had been laid off for the second time in 10 years from her job as a legal secretary. She spent a few years collecting unemployment benefits and dipping into her meager 401(k) savings to fill in the gaps.

“It’s kind of scary because I don’t envision a retirement for myself,” Eichengreen told Yahoo Finance. “I’m just going to have to keep working.”

Two years ago, she decided to start over completely, going back to school for a Masters degree in social work at Yeshiva University in New York. Today, Eichengreen now 60, is living off of student loans and says it’s unlikely that she’ll be able to pay off her $200,000 student debt, which includes what she borrowed for her first Masters studies in broadcast management.
“I don’t think social workers make much money so I’ll probably be dead before I pay that off,” she said.

Her situation is unfortunate but not unique. Thirty-four percent of workers have nothing set aside for retirement, according to the U.S. Social Security Administration. A study by the National Institute on Retirement Securityfound 40 percent of workers 55-65 years old do not own assets in a retirement account.

And as a result of the recession, more and more workers over the age of 50 are ill-prepared for retirement and are doing whatever they can to get by. Eichengreen, who was unemployed for over a year, chose social work as a way to counsel and encourage her peers. She is one of 2.2 million Americans over the age of 60 still saddled with $43 billion of student loan debt.

“I’m looking in the face of people like myself so I’m able to help them and be an encouragement to them to have an active and productive life,” said Eichengreen.

While Eichengreen’s financial woes were prompted by layoffs during the recession, others like Natt Chomsky, who was able to retire on his own terms, are struggling in retirement because of unforeseen problems.

Getting married later in life, Chomsky, 61, and his wife had their daughter in their 40s. After a successful career as a video editor, he made the difficult decision to take a company buy-out and retire before the age of 60. Although he had a considerable amount saved, he did not anticipate the need to send his daughter, now 17, to a specialized school.

“I never in my wildest dreams thought it would be as expensive as it is, so I’m watching my savings actually dwindle as each semester goes by,” said Chomsky.

His wife is eager to join him in retirement, but Chomsky encourages her to stay employed until they get over this bump. Once their savings are depleted, their plan is to sell their home and move to a cheaper, rural location.
 
If you find yourself ill-prepared and on the verge of retirement, there are still steps you can take to improve your financial situation, says Nevin Adams, Co-Director of EBRI Center for Research on Retirement Income. Here are five ways he recommends building a realistic retirement budget:

1. Calculate all your potential income sources:
- Go to http://www.ssa.gov and find out how much social security you can expect to collect.
- Look over your work history and check for defined pension plans you may have missed. The Pension Benefit Guaranty Corporation (pbgc.gov) helps locate owed benefits from fully-funded pension plans that have ended.
- Make sure you are taking full advantage of your workplace retirement plan, saving enough to receive the full employer match (if any), contributing up to the full legal limits (including catch-up contributions for those over age 50 1/2)

2. Budget based on needs, not wants:
- Get into the practice of living off of the fixed income you will be bringing in upon retirement.
- Plan for medical expenses and schedule health check-ups and preventative exams.
- Decrease expenses by cutting back on “luxuries” now and redirecting that money into savings.

3. Increase income by postponing retirement:
- If you can postpone retirement a few years, the additional Social Security income you will make per month could be considerable.
- Part-time employment, if available, can be a good option to both help delay retirement spending, and give you more time to set aside additional savings.

4. Downsize major expenses:
- Consider switching from mortgage to rent.
- Taking public transportation can save on car payments, insurance, and maintenance.

5. Consider relocating to cut costs on basic living expenses:
- Where you live matters. Considering more affordable states or regions can help you live more comfortably if you’ll be relying on Social Security for the majority of your retirement income.
Special thanks to The Hudson Guild for making this video possible.