Retirees struggling to stay afloat: How to keep health and economic issues from draining your savings

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Dorri Olds, a 61-year-old freelance writer and graphic designer, says she has spent nearly all her savings to refurbish her New York City apartment. In an emergency, she says she would sell it and consider retiring outside the U.S., possibly in a country like Costa Rica.

But she is also the caretaker for her 89-year-old mother, who lives a half-hour away in Manhattan’s Upper West Side. Olds sees how her mother’s health is declining, and worries that she, too, may have health issues as she ages.

“Ideally, I would wait until 70 to collect Social Security; that’s when you get the most money,” Olds says. “But I’m also panicked that politicians may gut it. I’m working harder to get more freelance jobs.”

“I won’t be out on the street with a tin cup if I sell my apartment, but I don’t want to have to do that.”

— Dorri Olds, 61

Running out of money in retirement

Olds’ concerns about waiting to collect Social Security are valid given the increasing number of older Americans who are projected to face health problems that are not fully covered by Medicare and could deplete their savings.

The number of Americans who are 75 and older is expected to more than double by 2040, according to the Center for Retirement Research at Boston College. It cautions that as both physical and mental health problems become more pronounced with age, retirees run the risk of draining their savings and investments.

Read: Many retirees can’t wait until 70 to collect Social Security benefits, but they could if they used this strategy

Olds bought her one-bedroom apartment in 1994 when she began freelancing full time. Over the past two years, she has spent around $65,000 on upgrades to the apartment, including a new kitchen, repaired ceiling in her bedroom, an upgraded bathroom and fresh paint throughout.

This has resulted in her first-ever experience with credit card debt, since her grocery bills and monthly maintenance fees have also increased. “My apartment is my nest egg,” Olds says. “I won’t be out on the street with a tin cup if I sell my apartment, but I don’t want to have to do that.”

Required to retire

On the other side of the country, Sasha Patterson says she didn’t choose to retire; circumstances forced her into it.

Patterson, 62, quit her job in New Jersey in 2018 to move cross-country with her husband, Paul Seaver, who’s also 62. At the time, Patterson had worked at the Center for American Women and Politics (CAWP) at the Eagleton Institute of Politics at Rutgers University for 20 years.

“I wasn’t growing in my job, and my position stagnated,” she says. Her husband had lost his job as a landscaper in 2016, so they jointly decided to move to the West Coast, where homes were less expensive. They sold their house in Maplewood, New Jersey, and moved near Seattle.

Patterson says she wanted to do similar work to what she did at CAWP. She made connections at the University of Puget Sound. She attended a conference in February 2020 to continue networking and ask about consulting work, but the COVID-19 pandemic shut the country down just weeks later. By the time the U.S. eased quarantine restrictions about a year later, there were no open positions for Patterson.

See: ‘Working longer is not a realistic cure for retirement insecurity.’ Time to get real about how long you’ll really work.

Where is the work?

Disappointed but not yet discouraged, Patterson continued applying for jobs but received no response. She even took her college graduation dates out of her résumé but received almost no responses.

Patterson recently began collecting her pension from Rutgers, while her husband started receiving his Social Security benefits. In addition, they have a Roth IRA and some savings from the sale of their New Jersey home, which they put in a Certificate of Deposit.

Patterson says they can survive on a limited budget, but emergencies take a toll. When they needed a new roof, Patterson and her husband borrowed $12,000 from a relative.

“I’m living without a safety net and hope to make it until I can start collecting my Social Security at 70,” Patterson says. Still, she says the biggest benefit of living in Washington is the state’s Medicaid program. Called Apple Health, it offers free or low-cost coverage to those who meet eligibility requirements.

“We can’t afford a new car, and it would be tough to deal with another home-related expense, but at least we don’t have to worry about healthcare,” Patterson adds.

Dip deferred his departure

Despite their different financial situations, both Patterson and Bob Polans face common anxieties about retirement in 2023.

Polans, 70, a CPA and financial planner, advises soon-to-be retirees. He’s also planning to retire at the end of the year. Polans, who works at Armanino LLP in Philadelphia, deferred his retirement last year, partly because of the stock market dip and the uncertainty of what 2023 would bring.

“I’m seeing a trend among professionals with specialized skills, such as lawyers, accountants and investment advisers, who continue to work part-time in retirement to maintain some level of involvement in their careers and generate additional income,” Polans says. He adds that he, too, may continue to work some hours a week after he officially retires at the end of this year.

Polans recommends that soon-to-be retirees build cash reserves and avoid liquidating investments during market downturns. As for investments, Polans suggests finding the optimal way to draw from IRAs, 401(k)s and other tax-deferred retirement accounts, considering one’s tax bracket.

More: Feeling insecure about retirement? 6 ideas for getting unstuck.

He also advises balancing withdrawals from savings and retirement accounts and finding a strategy that minimizes the income tax hit during retirement years. He adds that it’s challenging to plan around health issues, especially during retirement.

“You can’t keep working if you’re not healthy enough to do that,” Polans says.

One way to prepare for potential health problems in retirement is to buy long-term-care insurance, says George Nshanyan, 51, a financial adviser and CFP in the Northridge section of Los Angeles. It is expensive but he says unforeseen medical expenses can lead to bankruptcies.

See: Do you need $3 million to retire?

Three retiree categories

“I find that people fall into three categories,” Polans says. “One is higher-net-worth individuals who have accumulated enough assets and can afford to ‘self-insure’ and pay for such expenses when it comes up.

“On the other end of the spectrum,” he continues, “are those who cannot afford to buy any sort of insurance — there is no room in the budget.”

“For those in the middle,” he adds, “there are various options to plan for unforeseen medical expenses, including strategies and products that are not traditional long-term-care insurance.”

There are government programs for those who cannot afford long-term-care insurance. “In California, for example, Medi-Cal may pay for long-term nursing home and home care costs if you can’t afford the cost of a nursing home,” says Nshanyan. “However, these strategies need to be in place before the need arises, so planning is key.”

Carmen Cusido earned a bachelor’s from Rutgers University and a master’s degree from the Columbia School of Journalism. Her work has appeared in Newsweek, Oprah Daily, Refinery29, Health, NBC, CNN, NPR, Cosmopolitan, and other publications. 

This article is reprinted by permission from, ©2023 Twin Cities Public Television, Inc. All rights reserved.

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