Associated Press, Published January 14 2012
Older Americans find it harder to retire at 65
Stampley, who earns $11 an hour as a jobs counselor for seniors, didn’t expect to be working at age 72. But like many of her clients, she is among a growing number of U.S. seniors who are working much later into their golden years.
“My doctor asks me, ‘Why are you doing this?’ I tell him, ‘Because I have to, just to live,’ ” said Stampley, whose Social Security check barely tops $650 a month, not enough to cover her $900 rent, much less food.
After a century-long trend of Americans retiring at a younger age, many seniors are wondering if they will ever turn in their employee IDs. Almost 7 million are working who are 65 or older, a 60 percent increase since 2001. About 3 million of those workers are 70 or older, up from almost 2 million a decade ago.
The Great Recession accelerated the trend. Since 2006, the last full year before the recession, the number of 65-and-older workers jumped 22 percent, or 1.25 million workers.
“People have lost savings in the most recent economic downturn, and realized they are probably going to live longer than they expected to,” said Jacquelyn James, research director of the Sloan Center on Aging and Work at Boston College. “All of those things have (helped) change the balance between work and leisure in favor of work.”
Beyond the economy, shifting demographics continue to have an effect. The first wave of the roughly 79 million baby boomers turned 65 this year. Today, a 65-year-old man can expect to live 17 more years; a 65-year-old woman, another 20 years.
“People are living longer and generally are healthier and can – and do – work longer,” said Minnesota state economist Tom Stinson.
When the recession took hold, home values plummeted, health care costs soared, and seniors, in particular, saw heavy losses from their investment portfolios. As a result, one in four Americans believes he or she will need to work until at least age 80, according to a recent Wells Fargo survey.
“Many of us have targeted age 65 as our normal retirement age,” said Laurie Nordquist, director of Wells Fargo Institutional Retirement and Trust. “For people to actually be saying, ‘It’s going to be 80 or later,’ I think is a dramatic shift.”
For some older workers, staying on the job is more of a choice. They might scale back hours at their current job, launch an encore career or start a nonprofit or small business. Changes to the Social Security program reward those who work longer, and employers eliminating pension plans and retiree health benefits have prompted more workers to think twice about ending their careers.
Studies even show a health benefit to working longer – the activity can delay dementia, increase lifespan and contribute to greater happiness.
However, the majority of senior Americans who work are doing so because they need the paycheck. Of the three-quarters of Americans who expect to do some form of work in retirement, about two-thirds say they need the income, according to the Wells Fargo survey.
With the median retirement savings balance for Americans 65 and older at $36,000, it’s easy to see why more seniors continue to work. By staying on the job, they delay the need to tap into retirement savings, continue to contribute to 401(k)s and allow more time for stock investments to recover.
Even if employees delay retirement past 65, many are still at risk of running out of money before they die. This fear explains why a growing number of older workers in several studies have said they’re not sure if they will ever retire.
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