Except for public union workers with pensions that ultimately will not be met, retirement age for most keeps inching up.
People need to work longer or go back to work after a few years of retirement because they have insufficient savings. This creates competition between those over 60 and those under 20 for low-paying jobs.
I have been discussing this for years. This week it hit the cover of the NY Post: 80 is the new 60 when it comes to retirement
Call it the new American nightmare: Running out of money in retirement is scaring the hell out of record numbers of older workers, forcing them to stay in the workforce.
Now 80 is the new 60 when it comes to retirement. Many older workers who finally clock out have sharply underestimated their financial needs in retirement, raising the specter of personal financial disaster.
By putting off retirement the Baby Boomers are a large reason for the high levels of unemployment for those looking to enter the workforce. According to the latest Bureau of Labor Statistics the rate of joblessness in people 20- to 25-years old is 12.5 percent, twice the rate of people 25 and older.
These Boomers have plenty of company. The American Dream of retirement at 65 is looking more like a pipe dream to many.
Nearly half of older workers are on the job longer than they had planned to be — on average, by three more years than they estimated at age 40, according to a recent survey of Americans 50 and over by the Associated Press-NORC Center for Public Affairs Research.
And the latest studies shed additional disturbing light:
UBS Wealth Management Americas discovered that most wealthy investors today do not feel “old” until they turn 80. That’s a gigantic change from their parents’ generation, when “old” was regarded to be about 60. Also, pre-retirees underestimate how much it will take to finance a long and phased-in retirement. Their average expectation is that 58 percent of prior annual income will sustain them. The industry recommends 75 percent to 80 percent.
The percentage of older middle-class Americans who said their day-to-day financial concern is “paying the monthly bills” has climbed from 52 percent last year to 59 percent today, according to Wells Fargo. Saving for retirement comes in second. Four in 10 say saving and paying the bills is “not possible.”
Older adults are now the fastest-growing share of the US labor force. By 2020, workers 55 and older will comprise a stunning 25 percent of the civilian labor force.
I posted the following charts by Tim Wallace in October (see Workforce, Population, Jobs by Age-Group), but since they tie in, here they are again.
click on any chart for sharper image
Workforce Since 1970
Percent of Population in Workforce Since 1970
Number in Age Group Employed
Percent of Age Group Employed Since 1970
Mike “Mish” Shedlock