F I N A N C E
26
Edited by
Pat RegnierBloombergBusinessweek March 30, 2020For older people, the coronavirus crisis has been
an appalling shock. Many can’t travel or see grand-
children. Even buying groceries is a risk. Their life
savings are melting as the global economy shuts
down and financial markets plummet. The pain may
be particularly acute in the U.S., where Americans
rely on a retirement system that was broken well
before a pandemic dashed it to pieces.
Almost half of U.S. households 55 and older have
nothing saved for retirement. Many of the rest were
already doing worse than earlier waves of retirees.
After a 40-year-long shift from traditional pensions
to individual 401(k) retirement accounts, Americans’
financial security is now defenseless against what-
ever crisis comes along.
Just before the markets tumbled, Alicia Munnell,
a professor and director of Boston College’s Center
for Retirement Research, and her colleagues exam-
ined the retirement savings of late baby boomers,
now 55 to 60 years old, the first cohort to spend
their careers with 401(k) accounts rather than pen-
sions. What she found was “really horrifying,” she
says. With just a decade or more to retirement, late
boomers had far less saved in 401(k)-style definedCeci Dominguez celebrated her 67th birthday alone
in her home in the Elysian Valley neighborhood of
Los Angeles. The threat of coronavirus kept her from
friends and family—and from the part-time jobs and
informal gigs that keep her frugal budget balanced.
As her few investments were plunging in value,
she’d thought about driving down to the Census
Bureau, where a job was waiting if she just got her
picture taken and picked up an employee ID. The
Census Bureau would pay $25 an hour, almost $11
more than the rate she earned working 19 hours a
week at a private school that abruptly closed the week
before. But the virus news was insisting she stay in.
“I’m always looking for a job. Always,” she says.
“This time, I think I’m going to pass.” Once a mid-
dle manager at a food company, Dominguez used
to consider herself upper middle class. Then her
employer was bought. She lost her job and, at 59,
discovered no one would hire her for comparable
work. She never thought that in her late 60s she’d
be contemplating risking her health for the chance
at a part-time job. “I’m right there at the edge,”
Dominguez says. “The next couple months are
going to be tough.”Thecoronavirusandtheeconomiccrisisleave
many with one fallback: Social SecurityGoodbye, Retirement