Survey: Millions Forced To Rethink Retirement
National Public Radio, June 29th, 2009
With the recession squeezing wages and
holding back stock prices, millions of Americans are being forced to
rethink their plans for retirement, according to a new survey.
Watson
Wyatt Worldwide Inc., a retirement consulting firm, has released a
survey showing that in the past year, 44 percent of workers age 50 or
older have had to delay their planned retirement date. Three-quarters
of those now planning to postpone retirement cite the loss of savings
in their 401(k) accounts as the single biggest reason, the survey
showed. The respondents also said they need to work longer because of
rising health care costs and fears about price inflation.
If
Americans do keep working longer, it would reverse a decades-long trend
toward earlier retirement. The U.S. Bureau of Labor Statistics says the
average age for men at retirement in the early 1950s was just under 67.
That age fell continually until it hit 62 in the late 1990s.
The
survey of 2,200 full-time workers suggests the recession, stock market
crash and drop in home values could dramatically reverse the early
retirement trend. Half of workers over age 50 now say they plan to
retire at age 66 or later.
"The economic crisis has affected
many workers' retirement plans and nest eggs, but those nearest to
retirement have been especially hard hit," David Speier, senior
retirement consultant at Watson Wyatt, said in a written analysis of
the data. "Older workers do not have the time to offset declining
retirement account values, either by recouping their investment losses
or significantly increasing their savings rate. For many, the only
choice is to delay retirement."
A Federal Reserve survey in
2007 found that the median household in the pre-retirement age group —
ages 55 to 64 — had total financial assets of more than $72,000. Based
on the stock market's performance over the past two years, those
savings would have been whittled down to $55,000.
Such losses
appear to be spurring more Americans to save. On Friday, the Commerce
Department said the savings rate spiked to 6.9 percent in May, up from
5.6 percent the previous month. That's the highest savings level in 15
years.
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