I’m 63 with a master’s degree and two jobs – I’m worried I’ll never retire

A WOMAN approaching retirement age has shared her fears about not being able to afford her golden years.

She belongs to the 50% of peak boomers who have $250,000 or less in assets.

Cathy is a 63-year-old clerical worker from St Paul, Minnesota who is worried she will never retire.

As she revealed to Business Insider, she’s worked for the same company for 30 years, but is still earning a salary similar to some entry-level jobs.

Despite earning a master’s degree, Cathy is stuck on $20 an hour, plus whatever part-time work she can get as a tax consultant.

She rents her apartment for $1,500 a month, and still has student loans.

“I can’t afford life while working. How can I even think of retiring?” she told the outlet.

With no home that she could use for equity, and little saved in retirement accounts, Cathy is what’s known as asset poor.

Where to save your retirement money

There are several different places where you can put the money you save for retirement. Each has different tax advantages, but not all of them are available to everyone.

401(k) – an employer-sponsored retirement account. Contributions are made pre-tax and many employers will match a certain percentage of your contributions. Taxes are paid when the funds are withdrawn in retirement.

Roth IRA – an individual retirement account. Contributions are made post-tax but withdrawals in retirement are not taxed.

TSP (thrift savings plan) – a retirement savings and investment plan for Federal employees and members of the uniformed services. They work similarly to 401(k)s but may have more limited investment options.

Pension – an employee benefit that commits the employer to make payments to the employee in retirement. Pensions are becoming increasingly rare.

There are now so many asset poor older Americans that there’s a new acronym being used to describe this section of the population – ALICE.

ALICE stands for asset-limited, income-constrained, and employed.

Now, Cathy is worried that Social Security and her incoming pension won’t be enough for retirement.

“I don’t own anything except a car, I always have to rent, but I don’t know how seniors on limited income are paying rent,” she said.

“My biggest worry is how are we going to be able to keep affording rent when it keeps going up like that?

“There is only so much income I have. I live off of what I make every two weeks, and it’s scary.”

GENERATIONAL STRUGGLE

Cathy is one of 30 million Americans who are part “peak boomer” generation – born between 1959 and 1964.

More than half of peak boomers have assets valued lower than $250,000, despite their impending retirement, according to the Alliance for Lifetime Income’s Retirement Income Institute.

“America has never seen so many people reaching retirement age over a short period, and well over half of them will find it challenging to meet their needs through their retirements, let alone maintain their current standard of living,” said Robert J Shapiro, former under secretary of commerce for economic affairs.

“They lack the protected income that many older Boomers have from solid pensions or higher savings.”

See what financial expert Dave Ramsey advised for a 46-year-old caller with nothing saved for retirement.

On the other hand, find out how a couple retired in their 30s, despite never making more than the average American.