boomers with paltry 401(k)s and IRAs are vowing to work
forever, or at least, past traditional retirement age.
But a new report says a crowded labor market will limit
their ability to amass the savings they need even if
they do work long past 65.
problem, researchers say, is that millions of boomers
will try to crowd into the job market during those later
tremendous number of people competing for full-time and
part-time jobs will give employers the leeway to keep
pay down. So boomers trying to make a last-ditch effort
to fill up their retirement savings accounts may have to
work longer than they think to generate the dollars they
delaying retirement will continue to reduce their wages
in old age," according to research co-authored by
Teresa Ghilarducci, director of the Schwartz Center for
Economic Policy Analysis at The New School in New York.
And while that could mean boomers continue to work for
less than they would want, it also won’t be good for
will cause the labor supply of older workers (those who
are 55 to 74 years old) to increase relative to the
labor supply of prime-age and younger workers,"
according to a related report, written by Ghilarducci,
along with research associates Michael Papadopoulos and
Siavash Radpour. If employers end up using older workers
instead of younger workers, this could also lower wages
for younger workers or slow down their wage growth, the
could be "vitally important" now, they note,
because there has never been a time when so many older
people have been working.
polling has found that 74 percent of adults now plan to
work past retirement age — 63 percent part time and 11
percent full time. In contrast, in 1995, only 14 percent
said they’d work after 65.
people told Gallup they want to work, rather than having
to work. But if they are honest with themselves and take
a thoughtful look at their savings, close to half of
people nearing retirement age would see that they should
be working. Only 57 percent of people between 55 and 64
have enough savings to last through retirement,
according to an Employee Benefit Research Institute
Bureau of Labor Statistics has estimated that 7.2
million people over 55 will be in the labor force in
2024. That group of older workers is expected to be the
fastest growing part of the labor force.
desire to work past retirement age has been edging up
since the 1980s, and bumped up after the 2008 recession.
That recession hit near-retirees both economically and
emotionally. People over 55, who lost jobs, were
unemployed for much longer than younger workers and took
a 23 percent pay cut to go back to work, according to
the Urban Institute. Some spent down retirement savings
while looking for work, and lower pay left them less
able to save.
addition, as the stock market crash destroyed half the
value of stock market investments, nervous near-retirees
pulled out money in a panic, and didn’t benefit from
gains of more than 200 percent since 2009.
from the feeling of vulnerability the recession left
behind, there has been an increase in working later into
life over the last couple of decades due to changes in
typical sources of retirement money. Fewer new retirees
will have guaranteed pensions like those that helped
older retirees. And the age to qualify for full Social
Security benefits has climbed. Although people can
retire as early as 62 and get some Social Security
benefits, full retirement age is 66 and will soon become
67. A person who delays taking Social Security until age
70 gets benefits 76 percent higher than a person
claiming Social Security at age 62.
researchers also say more people now have college
educations and white-collar jobs, which enable them to
work longer than people in physically demanding
blue-collar jobs. However, even with the intent to work
longer, many will fail to carry out their plan. Although
baby boomers assume they will stay youthful and work for
years, even those with desk jobs could end up with
health problems or lose jobs in layoffs. In a review of
government data, the Center for Retirement Research at
Boston College found that 41 percent of American workers
retired earlier than they had planned.
vowing to work forever tends not to be a solid plan. It’s
one reason why working young baby boomers should beef up
their retirement savings now, while they can, and why
young workers — even if struggling with disappointing
paychecks — should save 10 percent of their pay.