Older Adults Are Outliving Their Retirement Savings: How I Helped My 89-Year Old Grandmother Bridge the Gap

By Denise Keiser, Fund Development Specialist at Elder Law of Michigan
Recently, I sat down with my grandmother who is in her 80’s to help prepare her monthly bills and discovered some startling news about her retirement savings – it’s gone! She, like many seniors her age, has outlived her nest egg. Surprisingly, she never thought she would live this long, and thus, ever run out of retirement savings.
She’s not alone. More and more older people like my grandmother find themselves in similar situations as they live in retirement years without enough savings. Or perhaps, as in my grandmother’s case, outlive retirement savings because it was parked in a low interest-bearing savings account which generated a very low rate-of-return. Furthermore, it only continues to worsen as medical expenses rise. For example, as a woman in her 80s, she is paying on average $4,300 in out-of-pocket medical expenses each year, even though she’s covered by Medicare.
It wasn’t easy for me to uncover my grandmother’s financial worries. As the proud woman she is, she didn’t want to ask for help and was reluctant to tell me what was keeping her up night after night. I only discovered the root of her worries after I realized she was withholding payment on what seemed like a routine monthly bill until her Social Security payment came in a few days later. It was only when I asked, “But what about your savings Gramms, can we pull it from there?” that I discovered the problem. She didn’t have to reply verbally because her face said it all – “No, because it’s all gone.”
Like many families, our family dynamic does not offer openness to talk about money matters.  So, when it was time to ask my family to help with bridging the gap between my grandmother’s $960 monthly Social Security income and her monthly expenses of approximately $1,500 per month, I prepared for objections. There was no way I would let her handle this ask on her own; Afterall, she was embarrassed as it was and didn’t want to burden anyone with her troubles. So, I started with a detailed budget which quickly identified the gap with a shortage of $540 per month or $6,480 annually.
With a budget in hand, I assured my grandmother that she was not alone in this. Next, I approached family members with the ask to contribute $50 to $100 each per month to help bridge the gap so that no one individual family member would have to bear the brunt of the gap. No doubt questions arose about how the savings dwindled, but by having the budget in hand and comparing it with how poorly the savings were invested, it was easy to justify the reality that her retirement savings was gone not because she spent it frivolously, but because she had been using it to bridge the gap between her income and monthly expenses.
Today, my grandmother is 89-years old and has less stress and worry about her money matters.  She still manages her own money, but her family is helping to cover miscellaneous expenses like her phone bill, cable TV, fuel for heating, and car insurance, leaving her enough money to live comfortably into her nineties.
If you have an older adult in your life, take the time to observe how they manage their money to be sure, in part, that they have enough to cover basic living needs during their golden years.  Chances are it may not be immediately clear if they are struggling financially. Be alert to any sign of financial stress such as unopened mail, delayed engagement with family, or excessive worry or stress about bills. If you find they are unable to afford the essentials, start with outlining monthly expenses and income in the form of a budget to identify their shortfall or gap and then talk to family members to see how they can assist. Ongoing open communication can help you avoid resentment and problems in family dynamics later.


Denise Keiser is a Fund Development Specialist with Elder Law of Michigan and has been a member of the Elder Law of Michigan team since August 2017. As a Fund Development Specialist, Denise assists Elder Law of Michigan’s leadership with donor management, grant writing, and communications.