Wednesday, Apr 28, 2010, 10:00 am
Goodbye Golden Years: Americans Planning Late Retirement, Poll Finds
The number of Americans who are planning to work beyond the traditional retirement age has increased, according to a new Gallup poll released this week.
For the first time since Gallup began conducting the survey in 1995, the number of individuals planning to work beyond 65 years-old now outnumber those who are planning to retire before that age.
The trend toward postponing retirement has risen over the years and underscores the growing anxiety of American workers who fear they will lack income and savings during their twilight years. Baby boomers and young generations, struggling to create a nest egg amid a climate of cutbacks and scant benefits, are finding it difficult to rest easy.
When Gallup first asked Americans the age they plan on retiring 15 years ago, respondents were more optimistic about their prospects. In 1995, 50 percent said they saw themselves leaving the workforce before 65 years of age. But that confidence has steadily dwindled over the years. These days, fewer than a third (27 percent) believe they will be able to retire before 65.
Meanwhile, the number of Americans who see themselves working beyond 65 has grown. More than a third (34 percent) of non-retirees plan to work beyond that age, a stark difference from when only 12 to 15 percent thought they would be able to retire early in the mid-nineties.
The decision to work longer stems from fears that many are not saving enough for their futures.
Similar Gallup polls have found that more Americans do not believe that their savings will grow by the time they retire. Retirement in the United States is heavily oriented toward private savings, but traditional means of income and assets have taken a hit. Stock values have dwindled in the wake of the economic slump. Most traditional pension plans have switched to 401(k) plans, adding to Americans' insecurity. As a result, aging employees are either reluctant or unable to stop working.
Compared to other developed countries, Americans are already working longer. Twenty-six of the 30 countries in the Organization of Economic Cooperation and Development (OECD) have retirement ages below 65, with an average of 63.5 years for men and 62.3 years for women. In many of these countries in Europe, individuals are able to retire thanks to a widespread pension system. Yet as of 2007, the official U.S. retirement age was 65.8—and it's increasing.
Even as people plan to retire later, the age at which Americans can receive full Social Security Benefits is also rising. The average retiring age for most workers is 66, but it will rise to 67 for those born after 1960. (Individuals can get benefits as early as 62 and up to 70 years but at a reduced rate).
Raising the retirement age has been seen as a solution to address the shortfalls plaguing Social Security. But the Economic Policy Institute (EPI) argues that it would hurt those who need a social safety net:
Raising the retirement age would hurt many workers who have little choice but to retire early due to poor health and job prospects – often the low-income workers who rely on Social Security the most.
For young and old alike, the current labor market is challenging. Older workers are now more susceptible displacement from a plant closure, layoffs or changes in demand than young workers, according to the EPI. And as we've reported before, young workers are less likely to put money aside, have health insurance and save for retirement.
The decaying social safety net has spurred some new ideas for reforming a broken system. But for most Americans who once saw their Golden Years waiting on the horizon, retirement is looking more and more like a mirage.
Akito Yoshikane is a freelance writer based in Chicago.