New Retirement Plan: Work Longer or Until You Die
Retirement is a popular goal among people in the workforce, but it’s a long-term one that appears to be delayed due to poor saving habits and the recent financial crisis. Many baby boomers — those born from 1946 to 1964 in the Untied States — plan to work well past the traditional retirement age.
Baby boomers are redefining their retirement habits, or lack thereof. According to a new survey from Gallup, 24 percent of baby boomers don’t expect to retire until they reach the age of 65, compared to the average age of 61 that American retirees say they retired at. Furthermore, 39 percent of baby boomers don’t expect to retire until they are 66 or older, and 10 percent say they will never be able to retire.
“Concerns about money likely play a significant role in explaining why so many baby boomers see themselves working longer,” Gallup reports. “Even before the 2008-2009 recession, financial advisers were warning that some baby boomers were carrying too much debt, saving too little, and relying too heavily on Social Security to retire comfortably. And then came the economic collapse — a perfect storm of layoffs, pension and stock losses, and plummeting home values — which was particularly ill-timed for boomers who might otherwise have been in financial shape to retire on schedule with the start of their Social Security benefits.”
Delayed retirement is affecting the workforce. Although the first group of boomers became eligible for early retirement under Social Security about six years ago, the generation still accounts for 31 percent of the workforce, similar to Generation X (32 percent) and millennials (33 percent). Some analysts point to the aging population to explain the recent decline in the Labor Department’s labor force participation rate, but these numbers don’t support that case.
Boomers are not the only Americans struggling with reaching retirement. According to a recent report from Wells Fargo, 37 percent of Americans with incomes between $25,000 and $100,000 say they will never retire and will work until “I’m too sick or die.” Meanwhile, 34 percent say they won’t retire until they are at least 80 years old, up from 25 percent in 2011 and 30 percent in 2012.
Nearly 60 percent of the middle class say their top daily financial concern is paying monthly bills, compared to 52 percent last year. Saving for retirement is a distant second place, with only 13 percent calling it a priority. Four in 10 Americans say saving and paying the bills is not possible at the same time.
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