Late retirement is becoming a necessity for increasing numbers of older Americans amid the financial crisis. Before the turmoil on Wall Street decimated many retirement portfolios, in a survey conducted last year for a report released by the AARP last week, 70 percent of older workers said that they would retire late for lack of money. There is little doubt that this number has increased since the survey was conducted.
"With people's knee-jerk reaction in looking at both the economy and looking at their own finances, working longer may be the only way to get themselves to remain financially secure," said Deborah Russell, director of work-force issues at AARP. With retirement accounts taking a beating, a simple look at a retirement planning calculator will likely show that people need to work several more years to make up the difference. In addition more people are taking their money out of stocks and other investments out of fear and putting it into low yield things like savings accounts — which also lengthens the time needed to reach their retirement goals.
Late retirement complicates matters for the entire workforce and employers. Older workers may be costlier in terms of salary and benefits, and in an effect some have called "the gray ceiling" younger workers will have fewer opportunities as fewer and fewer elders retire at the previously anticipated age.
"A lot of younger people are waiting for those good jobs. To the extent that older people are not giving up those jobs, that's going to cause problems," said Richard Johnson, researcher at the Urban Institute in Washington.
If older Americans want to keep their jobs, they need to be assertive in doing so in the face of these many pressures on employers. Director of the Center for Retirement Research at Boston College, Alicia Munnell, advises, "Control what you can control. We can't do much about the craziness in the market, but you certainly can control, in many cases, how long you're going to work....We thought that was the right answer even before the financial crisis. Everything has just intensified since then."
Source: Reuters via NPR