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In Depth December 4, 2008, 5:00PM EST

Unretired: Retirees are Back, Looking for Work

(page 3 of 3)

Nelson is negotiating to sell his Tucson home for $80,000 less than his mortgage Brandon Sullivan

She wasn't feeling well for a month or so, but didn't want to go to the physician," says Nelson. "Then she felt bad enough that we went to the emergency room, and that was the end." Eight days after the diagnosis, his wife died. The following March he put the house on the market and bought a three-bedroom place. He only put down 10%, even though that meant a higher mortgage, because he expected to sell his other house quickly and put down more.

But the local real estate market suddenly started cracking. "The market waited for Nelson to make a stupid move," he says. Three months later, he cut the price on the house he was selling. Other cuts followed as the market spiraled down. "We didn't get any offers that year. People were cautious," says Nelson. "We would get lookie-loos, and then the market would drop again, and we would lower the price." As the problem dragged into the summer, Nelson decided to put his second house on the market, too.

To cover both mortgages, he dipped into his savings. He started looking for a job, signing up for online employment services, including Monster.com (MNST). He got no responses beyond interviews with placement services. Then Wall Street began its slide last fall, and the savings in his retirement accounts started draining at an alarming speed. Nelson stopped eating out and canceled his newspaper, magazine, and cable subscriptions. "I cut back on everything I know to cut back on," Nelson says. He applied to retail stores but found they weren't hiring because of the downturn.

Finally, this spring, one family offered to pay the current asking price on the bigger house. It was about $400,000 less than Nelson had listed it for originally, but he jumped at it. He took his second house off the market briefly, thinking he could refinance it. "But by then, I didn't have anything to use as credit," he says.

Over the summer, Nelson realized the precarious situation he was in. He met with a bankruptcy lawyer in June, though he hasn't decided whether he'll file for protection from creditors. "I am paying the bills, but not the mortgage," he says. His real estate agent is negotiating with the bank to sell the second house to a prospective buyer for $80,000 less than the mortgage, he says. If his bank agrees, Nelson plans to move into an apartment and find a storage unit for some family furniture that's precious to him.

These days, Nelson says he is living off of his monthly Social Security check of $1,700 and has no savings left. Nelson talked to his daughter and son-in-law about moving near them in Minneapolis. But he worries that things are tough for them too, since they're both self-employed. "I am clearly torn," he says. Since his daughter also has three kids and doesn't have an extra room, he has to rent an apartment, whether it's in Minnesota or Arizona. "I am pretty tense," he says. "It's going to be a struggle."

With Susann Rutledge

Business Exchange related topics:
Employment for retirees
Baby Boomer Retirement
Retirement Strategies
U.S. Stock Market

Green is an associate editor for BusinessWeek .

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