The Cost of Growing Old

Dec. 7, 2018

 AUSTIN, Texas— Debbie Littell anticipated a retirement spent with family and away from the pressures of her former career.

Now, she wakes up at 3 a.m. five days a week to prepare for the nine-hour workday required to afford her health care and insurance costs. She drives to the Home Depot off Highway 290 in darkness broken only by street lamps, thinking about the time she could be spending on vacation anywhere else. She is counting down the 10 months and 15 days until she turns 65 and qualifies for Medicare.

“When I first came to Austin, I kept saying, ‘Well, I don't want to work because I have to, but because I want to,’” Littell said. “It's horrifying how fast that went sour.”

Littell isn’t alone. To make ends meet, about one in four older Americans continues to work after 65 to supplement their existing retirement income. Sociologists now recognize a growing trend where individuals work in their later years because they simply cannot afford to grow old. This trend is expected to persist as out-of-pocket health and living expenses increase.

In early 2015, Littell retired from Florida Atlantic University, where she had worked in administration for 18 years. The decision came after the sudden death of her husband from cancer two years prior, which made it increasingly difficult to afford her home. Two years shy of full retirement through the university, Littell decided to move to Austin, Texas, a city closer to her family. To Littell, this outweighed the reduction in her pension.

Then, she would wait until she was eligible for Medicare.

Medicare is financed through an individual’s Social Security benefits and helps cover costs such as inpatient hospital care and doctors’ visits beginning at age 65. For Littell, who has Type 2 diabetes, the program will help her afford her endocrinologist appointments throughout the year, among other things.

After moving to Texas, she planned on working a part-time job not out of financial necessity, but as a social outlet and source of what she called “fun money,” or spare cash.

“She was burned out,” said Becca Crane, one of Littell’s three children. “My understanding was that she’d leave early and might do a part-time job, but it wasn’t imperative.”

However, Littell would eventually re-enter the workforce as a full-time employee. Approximately 20 percent of Americans return to full- or part-time employment in their retirement, according to a study conducted by the University of Michigan Survey Research Center.

In January of 2015, Littell and her son Tim moved into a two-story home, formerly occupied by Becca, near Buda, Texas. Katie, Littell’s third daughter, would later join them.

Littell started as a part-time cashier at Home Depot in January of 2015, working six- to eight-hour shifts three days a week. She didn’t necessarily mind the work, but she wasn’t fond of the long hours spent on her feet.

After about a year, Littell switched to working as a backup accountant at the store. The job was still part time, and to Littell’s relief, it consisted primarily of deskwork similar to what she had done for FAU for nearly two decades.

In the summer of 2017, Littell began experiencing cloudy vision. She initially thought it was a side effect of the corrective surgery she previously had for cataracts, but when it began to interfere with her sewing, a hobby she’d had since she was a teenager, she made a doctor’s appointment.

The doctor discovered a detached retina in Littell’s right eye, which required surgery in August. At the time, Littell received health insurance through the Affordable Care Act, which provides coverage to those who cannot otherwise afford it and prohibits insurance companies from denying coverage to individuals with pre-existing conditions. However, while Littell’s insurance covered the doctors’ fees associated with the procedure, it did not cover the inpatient care fees, drug costs or anesthesia. Instead, Littell was forced to pay for those costs out of pocket.

Although Littell was inconvenienced by the unexpected expense of the surgery, she was just grateful to have her sight back.

But in September, her retina detached again, requiring a second surgery. Then in October, she needed a third surgery and in December, a fourth. As with the first, Littell footed most of the bills herself.

To make matters worse, she discovered that she had made more money that year than she had anticipated. This meant the income estimate in her ACA paperwork was incorrect. As a result, the federal government required Littell to repay everything her insurance had initially covered in 2017. After growing frustrated with the ACA, Littell left the program.

Concerned about her finances, Littell decided to go back to work full time. In 2018, she became the primary accountant at Home Depot. As a benefit of full employment, she is covered by Home Depot’s group insurance, which covers the majority of her health costs.

While Littell’s savings and current job allow her to pay for the necessities of health care, she is still unable to comfortably afford a more comprehensive insurance plan or surgeries that may be necessary in the future.

Robert Town, a professor of economics at The University of Texas at Austin, said individuals like Littell, whose income is too low to easily pay for health insurance yet too high to significantly benefit from ACA coverage, face unique challenges of affordability.

"If you're in between, kind of in a gap, then it's tough," Town said. "Without health insurance, you're exposed to a lot of potential risk because if you have an adverse health event, it's just going to be extraordinarily expensive."

Many Americans plan their careers and ultimately their retirement around health insurance affordability, Town said. This leads many to put off retirement until they’re eligible for Medicare, which makes health insurance more certain.

Although it’s not uncommon for elderly Americans to work after retirement, the reasons behind this decision can vary.

Some pursue encore jobs that differ from their previous careers to feel as if they’re contributing to society. Others take up part-time, noncommittal jobs, such as driving for Uber, simply because it gets them out of the house.

But for a growing number of retirees like Littell, re-entering the workforce is a necessity, not a choice. Monthly Social Security payments are not always enough to cover basic living costs, and rising housing prices make it difficult to afford to live in more expensive cities, such as Austin.

"Place matters in terms of being able to afford to grow old with dignity and to have a better life,” said UT sociology professor Jacqueline Angel. “Those golden years may be turning not so golden.”

This trend was triggered in part by the Great Recession of the late 2000s, Angel said. Many baby boomers, half of which already had little to no retirement savings, lost substantial sums of money as a result of the economic downturn.

Angel says that while more privileged seniors can sit down with their financial counselors to solve their problems, the reality of their low-income counterparts is vastly different.

"Every penny counts," Angel said. "There is no money left over at the end of the month."

Littell is fortunate her situation is not as dire as some.

Still, Becca Crane worries about what's yet to come. While her mother’s diabetes is manageable now, Littell’s eye problems could always return, and no one knows what other long-term consequences of the disease could be in store.

"You still think of your parents as indestructible," Crane said. "And I don't think we see the bigger impact."

Littell has already decided she will leave Home Depot once she turns 65. Despite everything, she still hopes to have another part-time job like she intended when she first moved to Austin.

But now, Littell fears the years after Medicare eligibility, not just the months before.

As her enrollment date approaches, Littell remains uncertain as to how much coverage she will receive through the federal program. She can’t ignore the possibility that she could find herself in the position where even Medicare, a program designed for the purpose of health care affordability, is too costly.

"Here I am pinning all my hopes on something that may or may not take care of my needs.”