Video: Nest eggs cracking

By Rehema Ellis Correspondent
NBC News
updated 6/30/2005 7:35:32 PM ET 2005-06-30T23:35:32

Seventy-nine-year-old Margaret Jelly faces an uncertain future. After paying her monthly bills, she doesn’t have much left for food.

“I actually only have about $50 a week,” says Jelly.

That’s not exactly what her husband had planned for his wife's “golden years.”

“I felt he had his pension,” she says. “I felt we would continue with all the benefits.”

Two years ago, Jelly lost her husband to cancer. The retirement and drug benefits he worked 30 years to provide for her were cut back and she could no longer afford his company’s health coverage. Like thousands of widows, she had become a victim of a fundamental shift in the American economy.

“Employers are just cutting back on their generosity,” says Richard Johnson, an employment benefit analyst with the Urban Institute. “It used to be the case that they were insuring workers throughout their lives. Now they are saying, ‘Let's let individuals take on more of this responsibility.’”

Just this week Pittsburgh Brewing and the Dayton-based bicycle maker Huffy moved to terminate pension plans because of financial difficulties — joining big names like Circuit City and Sears.

Lucent Technologies, the company that inherited the Jelly's benefit package when it spun off from AT&T, says it saved $464 million by cutting back.

But that's no comfort to widows like Jelly, who stand to suffer even more when their husbands die, having never bought life insurance and relying instead on the company's assurance of a death benefit.

Lucent Technologies explained its decision in a statement to NBC News, saying, “eliminating the death benefit was one of the very difficult decisions we had to make over the last few years ... to fund our operations and return to profitability.”

Lew Coppes doesn't want his wife of 46 years to worry about the future. Since his benefits were cut, too, he's now working six days a week despite suffering a heart attack.

“I hadn't imagined that I'd still be working when I'm going on 67,” he says. “I'm more concerned about my wife and what's going to happen to her after I'm gone. I'm in God's hands.”

It's a tough new reality for many of the country's retirees.

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