[box type=”default” size=”large”] Workers may have to postpone their retirement [/box]
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Will present-day employees age with too little money for retirement and have to “work till they drop”? That worry was the focus of experts on older workers who spoke on a panel at the Gerontological Society of America’s annual convention in Washington, D.C. in November.
The experts broke the myth that younger generations may have to postpone retirement until the very end of their lives because of the lack of financial security. The good news is that we may have to work longer than our parents, but most of us will still be able to enjoy retiring, sooner or later.
Social Security is secure
In recent years, talks about the possible bankruptcy of the Social Security system has made many people believe that they may have to retire late–or never.
Sara Rix, senior strategic policy advisor of the Economics Team of the AARP Public Policy Institute, in Washington, D.C., said while the Social Security program is in good financial shape, it is only one income source. Some studies of retirement security have shown concern about the future is not completely unfounded.
In 2013, Rix said, 49 percent of Americans ages 40-59 had no income source in retirement, besides Social Security.
For those ages 65 and older, four in 10 seniors (39 percent) 65 or older in the United States had no other source of retirement income than Social Security in 2012.
A major trend in recent years has been a sharp increase in the proportion of older people continuing to work. Back in 1985, 18.4 percent of those ages 65-69 were still working. But by 2013, that jumped to 32.2 percent.
A key reason for them to stay on the job was the Great Recession, which hit retirement savings for many. Among others over the years was that in the early 1990s Congress removed a special tax on earnings for workers in that age group, who also took Social Security. But participation in the workforce, even for those over age 70, who were not subject to that extra tax–also jumped from 6.7 percent to 12 percent in the same period.
Researches have also found that things may not be as bad as they seem. A new study released this year found although nearly a quarter (23 percent) of people 65-plus had said in a previous survey that they expected to postpone their retirement, only 11 percent really did so. Among those 66-69, 11 percent planned to postpone retirement and only seven percent eventually did.
Half of boomers have too little
In addition, Rix said, 71 percent of Americans now 65-69 are financially ready for retirement–with almost all in this group having enough to leave some inheritance by the time they die.
However, she stressed, if the huge boomer generation, 78 million people born from 1946 through 1964, does not do more to prepare for retirement, half will have to lower their living standard after retirement just to get by.
In summarizing this research, Rix remarked that the common phrase, “Work till you drop,” is only a small exaggeration. Most people, without sufficient savings beyond Social Security, would have to work longer than their parents’ generation did.
Late retirement puts the job market for seniors in the spotlight. Anthony Sarmiento, executive director of Senior Service America, based in Silver Spring, Md., noted that the only federal program helping low-income or unemployed seniors find jobs is the Senior Community Service Employment Program (SCSEP). ( Sing Tao Daily – New York)