Older Americans postpone retirement as economy sags
By Andrea Hopkins
CINCINNATI (Reuters) - Miriam Gorman wanted to retire more than a year ago, but steep financial losses in her retirement savings mean the 71-year-old bookkeeper now plans to work on indefinitely.
"I would have preferred to retire at the end of 2007, and then I was thinking at the end of this year, and now maybe it's next year. I really don't know," said Gorman, who's been with an advertising company in Bethesda, Maryland, for 15 years.
Across America, older workers are postponing retirement plans, dismayed by huge losses in the value of the investments they had depended on to fund their retirement. The U.S. recession has compounded the problem, with home values too low to provide the nest egg many seniors need and interest rates on safer assets close to zero.
"This combination of forces creates a triple whammy for older people. The stock market is plunging, jobs are hard to find, and home values are sagging. This creates a really difficult environment in which to contemplate retiring," said Richard Johnson, an expert in seniors and retirement at the Urban Institute, a Washington think-tank.
Assets in retirement accounts have lost $2.8 trillion, or 32 percent of their value, as of December 2, 2008, compared with September 30, 2007, according to the institute.
These financial losses have translated to a huge shift in American retirement plans.
A December survey by the senior's advocacy group AARP showed 57 percent of Americans aged 45 or over who lost money in their investments over the past year and who are working or looking for work expect to delay retirement. One in four have already postponed plans to retire, the survey showed.
A separate poll by consulting firm Towers Perrin, also from December, showed nearly two-thirds of U.S. employees believe they face a much greater risk that they won't be able to afford to retire when they want to. In August 2008, 14 percent of those polled said they planned to retire in the next few years. In the December survey, that number dropped to 9 percent. Continued...