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Financial Woes Force Boomers to Work Longer

The latest victim of the financial crisis: boomers’ retirement. With plunging stock values and tanking home prices, an increasing number of boomers approaching retirement age are postponing travel plans and staying on the job longer. According to a study in late 2008 by AARP, 65 percent of people over the age of 45 say they will delay retirement if the economic situation doesn’t improve significantly. Since that survey was published, stocks have sunk lower and the economy has formally entered into recession.

But don’t expect a federal bailout of boomers, because delayed retirement is seen as a good thing by many policy analysts. A November study from the McKinsey Global Institute found that having a workforce that continues a few years beyond the traditional retirement age is the only way for boomers to prevent a decline in their standard of living and not drag down U.S. economic growth. The report estimates that a two-year increase in the median retirement age – from 62.6 to 64.1 over the next decade – would add nearly $13 trillion to real U.S. GDP during the next 30 years while reducing by half the number of boomers who would find themselves without enough money for retirement.

The Department of Labor projects a labor shortage by the year 2010, with fields like education, healthcare, engineering and nursing set to suffer from a scarcity of workers. In a way, two negatives– boomer financial woes and a coming labor shortage– add up to a positive. More boomers are continuing to work and shoring up their savings.
 (excerpted from AGENDA, Aging Service of California, Feb 09 & Time, 11-18-08)

Will Boomers be Healthy Enough to Work?

There’s an assumption that some boomers will continue to work past their normal retirement. But that assumption begs the question: Will these boomers be healthy enough to continue working?

It’s evident older boomers are entering a retirement crossroad. Some boomers who are approaching 62 and are eligible to start collecting Social Security will take the money and run, rather than wait until 66 or later. There is also evidence of the aging boomers who have no intention of retiring because they want to work for altruistic fulfillment or for financial reasons driven by a Wall Street mess that has threatened many a nest egg.

A new brief from the Center for Retirement Research at Boston College – entitled “Are Older Men Healthy Enough to Work” – raises some troubling issues for the older boomers who plan to work well into their 60s and possibly beyond.

The brief, which focuses on men only, notes that the average retirement age in the country has dropped from 66 to 63 since the 1960s. In the meantime, mortality rates have decreased. So we have a case where people are living longer yet retiring younger. Yet, circumstances are changing, prompting a need in some to delay that retirement.

“In determining whether people will be able to work longer, it is not simply measuring how long they will live, but rather how much longer they will be capable of working. Life expectancy may be increasing, but can the same be said for healthy, disability-free life expectancy?” the brief said.

The center is encouraged by its conclusion that “men, on average, can expect more disability free years than they could in the 1960s when the average retirement age was 66.” (excerpted from the from AGENDA, Aging Service of California, Feb 09 & San Francisco Examiner by Paul Briard, 10-31-08)
 

According to a study in late 2008 by AARP, 65 percent of people over the age of 45 say they will delay retirement if the economic situation doesn’t improve significantly.
 

“In determining whether people will be able to work longer, it is not simply measuring how long they will live, but rather how much longer they will be capable of working. Life expectancy may be increasing, but can the same be said for healthy, disability-free life expectancy?” the brief said.
 



 








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