This week, Gail addresses the issue of retirement for baby boomers and discusses a recent study showing more Americans are planning to work into their 70s and 80s.
Cracks are beginning to show in Americans' eternal optimism about retirement.
A survey just released by AARP indicates a record number of workers plan to remain in the labor force well beyond the "normal" retirement age. Jeff Love, director of research at AARP told me this is something they organization has never seen before. "Nearly half [45 percent] said they were going to work into their 70s or later!"
While a majority — 53 percent — of those polled by AARP still expects to retire before age 70, this number is declining. Twenty-seven percent said they plan to work into their 70s. But a startling 18 percent predicted retirement would not come until they were in their 80s or "never."
The poll covered people between the ages of 50 and 70. This is the target membership for AARP, which used to be known as the American Association for Retired Persons, but changed its name to appeal to baby boomers. It confirms what appears to be a growing trend: Americans are staying at work later in life.
According to the Bureau of Labor Statistics, the number of individuals between the ages of 65 and 74 who are still in the labor force rose 14 percent between 1998 and 2000. As a result, the average age of the workforce is getting older.
Love speculates that the sell-off in the stock market in the past three years is partially behind the big jump in the number of baby boomers who expect to delay retirement. "They probably realize they have to work longer so they can re-build their 401(k) assets," he said. (The AARP survey was conducted in mid-June, before investors received their second quarter statements reflecting the recovery seen in the stock market)
But money isn't everything. Although 22 percent of pre-retirees cite the "need for money" as their main reason for remaining in the workforce, concern about health insurance is a close second, with 17 percent giving that as their motivation for staying on the job.
Keep in mind that baby boomers are an educated generation whose identities are often defined by their jobs. So it should not be a surprise that 15 percent say they want to continue working in order to remain "mentally active."
An aging workforce isn't a bad thing, according to Love, who said aging baby boomers represent a "valuable, trained workforce." And one that AARP said employers will need to cater to because there aren't enough Gen-Xers to meet the demand for workers. He said companies need to think about issues such as continued training for older employees and flexible benefits such as time off to provide care for aging boomer parents.
The good news is that baby boomers say when they retire from their current positions, they're willing to take on many of the jobs that are expected to need workers: customer service representatives, teachers, teaching assistants, retail representatives, cashiers, landscapers and computer support specialists. "There's a nice match there," said Love.
But despite their best intentions, baby boomers who plan to continue working simply might not be able to because of unanticipated health issues. According to Love, "Health is the wild card."
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