What happened to that wave of Baby Boomers who was about to start retiring en masse early this year?
Readers may recall all the media frenzy late last year about what was billed as a “tsunami wave” of Baby Boomers flooding the offices of Social Security everywhere.
It was estimated that 77 million would become eligible to retire within years and that 10,000 people a day would be eligible to apply for benefits beginning in January this year.
Well, that “tsunami” was a very little one and has gone largely unnoticed. Fact is, people have not retired in droves as was previously expected. Working longer has become a trend that’s likely to continue in the near future Why? Experts point to four main reasons:
• Drastic fall of the stock market, 401(k)s and other types of investments, depleting whatever money Baby Boomers had for their retirement;
• Decline in home values;
• High prices of oil and gas, which have taken a big chunk out of people’s income.
• Employers cut back on retiree healthcare coverage and traditional pensions
Certainly, a shift is under way. In the first four months of 2008 about 30 percent of 65- to 69-year-olds were either employed or looking for work, up sharply from 24 percent in the last business-cycle peak in 2000, according to Labor Department figures.
“Retirement on hold,” reads a headline in the July-August issue of the AARP Bulletin. The cover story discusses how Baby Boomers are sticking to their jobs or looking for new ones in order to make ends meet.
An AARP survey in April found that nearly one in five people aged 55-60, and about one in four aged 45-54, planned to delay retirement because of the economic downturn. Nearly one in three people aged 45 – 54 blamed postponing their retirement on falling home values, among other reasons; 18 percent of those aged 55 – 64 said the same.
David Certner, AARP legislative policy director, is quoted in the AARP Bulletin story as saying it’s no surprise that people are pessimistic about their retirement security. “The stock market volatility has become even more important to many in or nearing retirement who rely on their own pensions, such as 401 (k)s, that put investment risk on individuals. So retirement security rises and fall with the market.”
The consolation? Americans are living longer and healthier lives. The only thing is they have to work a little longer to enjoy full retirement.
Wagner Dotto, Editor & Publisher, Editor@CNYHealth.com