We frequently hear stories about retiring early, but today Mellody Hobson talks about retiring late.
More and more, people are abandoning the dream of playing canasta beachside in favor of staying in the workforce. This is a big change from the past fifty years, when Americans were retiring younger and younger, aided by private pensions and Social Security. But that trend seems to be reversing.
Why is that?
In a word: Money. One of the main reasons people are retiring later is because they simply can’t afford to put on their house slippers. This has proven especially true as companies move away from fixed pension plans in favor of 401(k) plans. On top of that, we’re living longer. The average American lives to be 78 years old. These factors have workers reconsidering their retirement plans.
In 1950, nearly half of men 65 and older were still in the labor force, according to the Census Bureau. That percentage bottomed out in the 1980s at less than 16 per cent. It has since edged up to about 19 per cent, and experts believe it will increase even more as the oldest baby boomers reach 65.
While the average boomer plans to retire from his full time job at age 63, nearly 80 percent say they’ll work on a part-time basis well beyond that.
In April, a Gallup survey of nonretired adults found that the average American expects to retire at age 67 — four years later than those polled a decade earlier and seven years later than those polled in the mid-1990s.
So people are working longer because they don’t have enough money to retire?