Retirement Age Grows More Distant For Many In Wake Of Crisis

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

Iowa Faces Surplus Of Jobs

People across the country who are worried about layoffs leading to them and a looming recession can take solace in

"As rising unemployment and layoffs beset workers around the country, Iowa faces a different problem: a surplus of jobs. Or to put it another way: a shortage of workers. A survey of companies by Iowa Workforce Development, a state agency, found as many as 48,000 job vacancies, in industries including financial services — Des Moines trails only Hartford as the nation’s insurance capital — health care and skilled manufacturing. One estimate projects the job surplus to reach 198,000 by 2014, with vacancies increasingly in professional positions. Greater Des Moines alone faces a shortfall of 60,000 workers in the next decade," according to the New York Times.

Baby Boomers: Invest In Yourself

I recently read an article MSN titled “Internships for Boomers” and it hit home. I’ll turn 53 next month and I’m an intern at NuWire Investor, getting my feet wet in the world of online publications. I want to confirm what I read in that article with my personal story so others will know that big boomer changes are happening all over the country. I guess the first thing I would like to declare is that retirement is an anachronism for many people 50 and older. I don’t ever want to stop being involved, plugged in or a contributing member of society--I just want to have fun doing it. I think it’s a national tragedy that so many retirees take their experience (and money) out of societal circulation. OK, so much for the rant.

After 18 years in the ceramic tile industry I (and my knees) decided that it was time for a change. I taught myself how to type and use a computer. During the course of a year, my wife and I downsized into a small condo located between the local community college and the University of Washington. We did this anticipating we would be paying huge college tuitions with only her income. As it turned out, we didn’t need to.

At the community college, I wrote for the school paper. The job paid $750 per quarter and tuition was around $800 per quarter. Even though I had never had a job writing before, I quickly adapted. I even had an advice column called “Ask the Old Guy.” After my first year, and because of my high GPA (I wasn’t messing around) and my involvement with the paper, I was nominated by the school for a national two-year college award. That award resulted in a $750 scholarship and eventually a $400 partial quarterly tuition waiver at the UW. Meanwhile I applied for and was awarded an honors scholarship from a private foundation for community college transfer students. Between the two awards, I actually ended up netting about $200 per quarter to attend the University of Washington for two years. I graduated in 2007 cum laude, Phi Beta Kappa, with a liberal arts degree. The challenge that I had put off all of my life had become a reality. None of it would have happened without the decision to “pull the trigger” and do it.

The point that I would like to make is that starting a new endeavor at 50ish is completely possible--as far as getting a college degree anyway. I was astonished how many scholarships are available for “non-traditional” students, making financing a non-issue if you go through the rigors of their application process. I would suggest doing some research on the available scholarships in your area prior to enrolling. There are scholarships out there that will take you through all four years if you ask. The thing to note is that you have to commit to doing it. Even once you’re in school, the opportunities are available.

I don’t know where this internship will lead. I don’t know if it will lead to a job in this field, or a new set of questions. What I do know is that whether you leave a job because you have to or because you want to, there are many, many opportunities for older Americans to stay sharp, and stay involved.

Guest post by James Krieger, an intern at NuWire

Layoffs Up 68 Percent From March To April

Planned layoffs by U.S. companies in April increased 68 percent compared to planned layoffs in March, hitting the highest levels seen since September 2006, according to a report released today by employment consulting firm Challenger, Gray & Christmas Inc.

U.S. companies planned 90,015 layoffs last month, compared to 53,579 in March. April's layoffs were a 27 percent increase from a year earlier. Planned layoffs haven't been this high since September 2006, when 100,315 jobs were cut, according to the report.

The financial sector was hit hardest by the spate of layoffs, because of "the housing slump and about $300 billion in write-downs on bad mortgages and investments, the firm said," according to Reuters. "The financial services industry announced 23,106 cuts in April with almost half of them occurring in a two-day period that saw hefty planned layoffs from Citigroup and Merrill Lynch, it said."

The telecommunications and transportation sectors also suffered heavy job losses, with 8,007 and 7,954 planned layoffs in April, respectively.

"Employers have announced 290,671 jobs to be eliminated in the first four months of 2008, up 9 percent from the 266,658 cuts recorded during the same span in 2007, the firm said," according to Reuters.

Recession Forces Teens To Curb Spending

In a previous post, I talked about how the tightening job market would bode poorly for teens--there will be more competition for fewer summer jobs.

A recent Associated Press article documented another way in which the slowing economy is affecting life for teenagers: the recession has made frugality cool.

"Teen hiring has slumped by 5 percent since March 2007, with many mom-and-pop stores, which typically hire younger workers, laying off employees. Hiring in the overall job market fell by just 0.1 percent during the same period," according to the article.

Because of the recession, "jobs for teens are less plentiful, and parents who supply the allowances are feeling the economic pinch themselves," according to the article. "The stalwart retailers of teen apparel, such as Abercrombie and American Eagle Outfitters Inc., are reporting sluggish sales, defying the myth that teen spending is recession-proof: It holds up longer, but can eventually fold."

Teenagers always want to be trendy, but now they have less money to spend on trends. So, "Last week, Ellegirl.com, the teen offshoot of Elle magazine, launched a new video fixture called Self-Made Girl, which shows teens how to make clothes and accessories. The first video offers tips on how to create a prom clutch," according to the article.

For those who aren't crafty (such as myself), thrift shops, consignment stores and second-hand stores are all great options for saving money on close. An added bonus is that buying used clothes allows people to reduce their carbon footprints.

"Kerstin Block, president and co-founder of Buffalo Exchange, a Tucson, Ariz.-based chain that sells second-hand clothing, said Gap jeans there run $9 to $20. A new pair runs $50 to $60. Block noted that buying second-hand is also appealing to a growing eco-friendly sentiment among teenagers," according to the article.

"Economists say this teen spending slump could be the worst in 17 years, when teen frugality led to the demise of once-hot Merry-Go-Round Enterprises Inc. and ushered in an era of flannel shirts and torn jeans," according to the article.

I grew up in Seattle, and had no idea that flannel and ripped jeans were popular because they were cheap. I just thought everyone was into grunge. And while we're on the subject, the 14th anniversary of Kurt Cobain's tragic death was this month. May the voice of his generation rest in peace.

Slowing Economy Could Impact Summer Jobs

When I was a student, I spent four summers working at a small Greek restaurant in my hometown (Kafe Neo in Edmonds, for those of you in the Seattle area. Try the Grecian Special gyro--pronounced "YEAR-oh"--and definitely get a side of skordalia and pita!). The money wasn't great, but it was something; I got delicious free Greek food while I worked, and whenever I went in while I wasn't working; I liked my coworkers; it wasn't too stressful. In short, it was a typical summer job.

Unfortunately for today's high school and college students--prime candidates for seasonal work--summer jobs are likely to be hard to come by this year.

"Oil prices skyrocketing. Home sales plummeting. Retail sales falling. Because of all these factors, there is likely to be a dearth of 'help wanted' signs up this summer. And many teens may be extra motivated to want work as parents, seeing discretionary dollars dwindle, start asking kids to pick up more of the tab," according to a recent MSNBC article.

Two recent studies show that the summer job market is going to be a competitive one.

"Nearly half of hiring managers say they have no plans to hire any seasonal workers this year, according to a study of 1,100 companies released today by SnagAJob.com, a job site for hourly positions. When asked why they wouldn’t be hiring, 31 percent of those polled said they didn’t have the budget," according to the article.

Further, "a report put out this month by the Center for Labor Market Studies at Northeastern University states that 'the summer 2008 job outlook for teens looks particularly bleak,'" according to the article.

Part of the squeeze will come from "the growing number of older workers going after traditional teen jobs in retail and food services, and also the increase in illegal and legal immigrants vying for those jobs," according to the article.

With the economy in a slowdown or a recession--depending on your point of view--more people are looking for work and there are fewer jobs to go around. I know one woman, well established in her job, who recently got a second job working weekends at Starbucks to help cover her rising gas and food costs.

Teenagers and adults alike who are looking for part-time, seasonal work should start looking soon. According to the SnagAJob.com study, 76 percent of companies that will be hiring summer and seasonal workers expect to fill those positions by May.

Job Markets: The 15 Best States

In my previous post, I noted the 10 states with the worst job markets in the U.S. Despite the increasing unemployment across the country, there are definitely some states where jobs are more plentiful.

According to CareerBuilder, these 15 states are:

South Dakota
Idaho
Wyoming
Nebraska
Utah
Hawaii
North Dakota
Virginia
Montana
New Hampshire
New Mexico
Delaware
Maryland
Iowa
Vermont

Iowa and Vermont have the highest rates of unemployment among these states at 4 percent, according to CareerBuilder. That's a full 1 percent lower than the national unemployment rate of 5 percent, according to the Bureau of Labor Statistics. South Dakota and Idaho, meanwhile, have unemployment rates of only 3 percent, according to CareerBuilder.

Real estate investors who get their foot in the door in these markets early may find themselves with plenty of options when people begin moving to these states, brimming with job opportunities, from states that are hemorrhaging jobs.

Job Markets: The 10 Worst States

With the economy teetering on the brink of recession, economists and armchair economists are closely analyzing the number of jobless claims. While the number has been rising pretty consistently across the country, and the national unemployment rate is at 5 percent, according to the Bureau of Labor Statistics, there are some states with worse job markets than others.

According to CareerBuilder, the worst job markets are found in the following 10 states:

Michigan
Mississippi
South Carolina
Alaska
California
District of Columbia
Ohio
Arkansas
Nevada
Kentucky

Metropolitan areas within Michigan, California and Ohio were all featured on NuWire's 2007 list of the Top 5 Declining U.S. Markets. The metropolitan statistical areas (Detroit-Livonia-Dearborn in Michigan, San Francisco-San Mateo-Redwood City in California and Cleveland-Elyria-Mentor in Ohio) all suffered losses in terms of both jobs and population.

Real estate investors could likely find deals in these markets because of all the so-called motivated sellers who have to move elsewhere to find jobs. But, as my dad always told my brother and me, our baseball and basketball card collections weren't actually worth the prices listed in the Becketts we pored over unless we sold them to someone. So investors should keep in mind that, while a property may have a fantastic price, they still need an exit strategy, and with people and jobs leaving town, exit strategies may be harder to come by than deals.

Industries Friendly To Workers Over 40

"With the baby-boomer generation approaching retirement, resulting in a shortage of approximately 10 million employees over the next decade, candidates with relevant work experience are becoming more in demand," according to ClassesUSA, an online higher education portal.

Many workers of a certain age fear being forced out of their jobs and forced into retirement so that their company can then hire younger replacements. Younger workers are cheaper, in theory, than their older counterparts. They generally cannot command wages as high as those with more experience and education than they have themselves.

Companies can also save by employing younger workers because they will have to shell out fewer dollars for health care, because younger workers are often healthier. Assuming a company participates in a matching program for retirement plans, they will also save money on that front, because the rate of young workers participating in retirement plans is smaller than the rate of older workers doing so.

"With the baby-boomer generation approaching retirement, resulting in a shortage of approximately 10 million employees over the next decade, candidates with relevant work experience are becoming more in demand. That gives older employees more leverage to request bigger paychecks and to change jobs later in life," according to ClassesUSA. "Fields such as health care, business-to-business services, education and services for the elderly are practically custom made for the older worker considering a job change."

The health care industry is ideal because many of the required academic programs can be completed in two years or less, and many health care jobs offer flexible schedules; consulting is a common opportunity in business-to-business settings, and consulting clearly favors those with experience in an industry; education is facing shortages and high turnover across the board and would benefit from older workers, who often bring a sense of loyalty to their workplace; and finally, older workers are especially cut out for the industry of services for the elderly because they are the ones most likely to understand what that population wants and needs.

For more details on why each of these industries are particularly well suited to workers 40 years old and older, see the entire article here.

Immigrant Population In U.S. To Reach New Heights

According to a recent article in the New York Times, "If present trends continue, within two decades the proportion of immigrants in the United States will surpass the peak reached more than a century ago, a new analysis concludes."

The article cites estimates from the Pew Research Center that say that sometime between 2020 and 2025, immigrants will account for 15 percent of the American population, which works out to one in seven people.

The article also cites the Pew Research Center also estimates as evidence that this increase could affect the size and makeup of the American workforce. "Because the vast wave of baby boomers will be joining the ranks of the elderly, the number of young and elderly compared to the number of working people—the so-called dependency ratio—would rise to 72 per 100 in 2050, compared with 59 per 100 in 2005."

What does this mean for investors? For one thing, it means that the job market is likely to change. Both the types of jobs in demand and the types of workers available might shift as the population of immigrants increases. It also means that real estate prices could increase in areas traditionally heavily populated by immigrants, because the balance between supply and demand could be disrupted.

More Employers Now Seeking Older Workers

Many job seekers over a certain age feel discouraged by the fact that some employers may consider them old. In fact, statistics do show that there is some ageism in play in the hiring process; in 2004, job seekers 55 years old and older took 25.8 weeks to find jobs, while the job search lasted only 18.9 weeks for younger workers, according to the AARP.

Sometimes older workers are discriminated against because they are stereotyped as being unwilling or unable to adapt and to use technology and also because they command higher pay than workers straight out of school. There are also a lot of companies unwilling to invest time and training in employees who they think are just going to retire in a few years anyway.

There are definite and obvious benefits to hiring older employees, though. Older workers bring to the table years of experience and tend to stick with jobs longer than their younger counterparts.

To combat ageism in the hiring process, the AARP created the AARP National Employment Team three years ago; the group is comprised of a list of employers, in both the public and private sectors, looking to hire workers 50 years old and older for full-time, part-time and seasonal jobs. The Associated Press reported about two weeks ago that three federal government agencies and six private companies had been added to the list, bringing the total number of employers to 38.

The job opportunities are available for free on the AARP's website.

Deborah Russell, the AARP's director of workforce issues, said 69 percent of baby boomers intend to work past age 65--the traditional retirement age--and that most plan to do so to shore up their savings to cover the high costs of medical care.