Two Thirds Of Americans Aged 45-60 Plan To Delay Retirement
With today's jobs number due out shortly, it is worth pointing out some of the key trends that we have observed in the underlying data stripped of month-to-month seasonal variance, which expose the "quality" side of the US non-recovery, instead of the far more manageable "quantity" side. First and foremost, as we showed over two years ago, and as the mainstream is gradually picking up, the US labor force is increasingly transitioning to one of part-time, and temp workers, which has key implications for wages, worker leverage, and overall job prospects, all of which logically are negative. But perhaps an even more disturbing trends is the conversion of America into a gerontocratic worker society, where the bulk of jobs are handed out to those 55 and over, which puts all young workers, not to mention college graduates, at a major disadvantage relative to far more experienced older workers, who are willing to work for less as they scramble to compensate for retirement shortfalls, and which prevents the natural rotation of the US labor force from older to younger.
And as the WSJ today reports, there is zero hope that this trend will change in the near of far future, as nearly two-thirds of Americans between the ages of 45 and 60 say they plan to delay retirement, according to a report to be released Friday by the Conference Board. This compares to 42% of respondents expecting to put off retirement just two years earlier.
The WSJ explains how the "recovery" is anything but especially to those who may have hoped to be able to afford a peaceful and quiet retirement:
Nearly two-thirds of Americans between the ages of 45 and 60 say they plan to delay retirement, according to a report to be released Friday by the Conference Board. That was a steep jump from just two years earlier, when the group found that 42% of respondents expected to put off retirement.
The increase was driven by the financial losses, layoffs and income stagnation sustained during the last few years of recession and recovery, said Gad Levanon, director of macroeconomic research at the organization and a co-author of the report, which is based on a 2012 survey of 15,000 individuals.
Matt Stern, 51 years old, a former analyst at a Manhattan hedge fund, met with a financial planner in December, days before he was laid off and the fund announced its imminent liquidation. At the meeting, the planner projected that Mr. Stern could retire at age 62. But now, with his assets down 10% to 20% from their 2008 peak, he is looking for a job and retooling his expectations for retirement.
"I might have to prioritize income over whatever calls to me on other levels," such as travel or being involved in nonprofit organizations, Mr. Stern said.
The labor force has been getting older for decades for reasons that range from longer life spans and better health to companies' replacement of defined-benefit pensions with higher-risk 401(k) plans.
But the stark increase in workers expecting to stay on the job—now 62%—was a surprise, Mr. Levanon said. After all, the stock market has largely earned back its losses, home prices are rising, and the unemployment rate is creeping down, all of which suggests workers should be feeling more secure.
Yet, lo and behold, just the opposite is happening, at least for US workers, if not for those 1% whose primary source of wealth is the stock market:
Many middle-aged Americans, though, drew down their savings during those lean years and now find that leaving the work force on their original timeline is no longer viable, he said.
They are also facing low interest rates, an uncertain future for Social Security, and a lower likelihood of receiving employer health insurance after retirement.
We suggest readers keep the above in mind once the spin brigade comes out full bore later today to spin the "great" jobs number which will add barely enough jobs to keep up with the population growth of the US.
- advertisements -