Many boomers can’t afford to retire
Older workers — those 65 and up — are staying in the workforce in higher percentages than previous recent generations that hit retirement age. Labor force participation of older workers is at a 25 year high. And for many, the reason is economic necessity.
A recent report by AARP finds that nearly half of Americans 50 and over have $25,000 or less saved for retirement. The Great Recession slashed many older workers’ savings, retirement accounts (pensions and 401ks) and home equity. AARP reports that nearly half (44 percent) are now planning to work part-time after they reach retirement age, and one-third (33 percent) are delaying the age at which they expect retire.
Many older Americans have little choice in the matter and simply need to continue working as long as they can, if they can. The Economic Policy Institute, which researches labor-force trends, estimates that there are 57,000 men 70 to 74, and 69,000 women 75 and up, who are currently working but would not be in the workforce today if the recession hadn’t hit their savings and earnings so hard. EPI labor economist Elise Gould says that many wealthy households have fully rebounded from the recession as asset values (stocks and high-end homes) have surged back. But for the middle class, income and retirement savings still haven’t recovered.
“In fact, we have seen people losing their wealth,” says Gould. “And that can lead to people staying in the workforce longer, because they simply cannot afford to retire.”
Economist Matthew Rutledge at the Boston College Center for Retirement Research says money that people were counting on in retirement won’t go as far as people once supposed.
“Social Security benefits aren’t going to be replacing their income at the rates that they used to in previous generations,” Rutledge says. “People’s pensions aren’t as generous as they used to be. In all likelihood, people just haven’t saved all that much, (and) housing values have fallen, as we saw during the recession.”
Rutledge and other economists have looked at the kinds of jobs people in their 60s and 70s tend to land. “It’s a lot of people working retail, people working as night watchmen and security guards — jobs that are stereotypically ‘old’,” says Rutledge. “People are sort of shunted into jobs that don’t really pay as well, and may not have as secure a position.”
Kyle Pierce has some experience of this. She is 67, and retired from a career as a registered nurse at age 62. At the time she was making $42 an hour. “I actually went back to work about three years ago — for money,” she says.
She’s been waitressing at a local coffee shop in her hometown of Monterey in Western Massachusetts. Pierce says the retirement savings she and her husband had put away weren’t covering the bills. “I knew I was a really good waitress, way back,” says Pierce. “I have a really good strong work ethic. In fact, some of the summer people that get hired just stand around and it drives me crazy.”
Vicki Bernstein doesn’t believe in standing around either. She’s 64 and teaches a full load of fitness classes to seniors at a medical clinic’s health club in Portland, Oregon. Her husband, 63, works full-time as a shoemaker and coffee roaster. They also run a small business out of their home, selling prayer flags online.
“We always played more than we saved money,” says Bernstein. “I think it was just something from my generation. I have been working for a long time, and it brings me a lot of satisfaction to see people age well. So I’ll probably do it till I die.”
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