Monday, September 23, 2013

Retirement dreams are disappearing

The U.S. has a history of being a hard-working nation, one where people who did their job and followed the rules were rewarded with financial security in their golden years. But as middle-class jobs have slipped away due to the last recession only to be replaced with low-wage opportunities, workers are losing hope about being able to retire. Instead, they plan to work longer.  

A report released by The Conference Board earlier this year noted that the number of current workers between ages 45 and 60 now planning to delay retirement grew to 62 percent in 2012, up 20 percent from two years earlier. A reduction in salary as well as job loss were the top reasons for putting off retirement, according to the document.  Another report by Gallup showed the average retirement age has increased by four years since 1995, and is expected to grow even more:
Younger Americans are growing more pessimistic about their golden years. The average non-retired American does not expect to retire until the age of 66, compared to 60 in 1995. Furthermore, 37 percent of those polled by Gallup say they expect to retire sometime after the age of 65, up sharply from 22 percent a decade ago and 14 percent in 1995. Meanwhile, only 26 percent say they will likely retire before age 65, down significantly from 49 percent in 1995.
Fewer and fewer Americans are contributing to their retirement, and those who do don’t seem to have enough saved anyway. Why is that? Because the increased reliance of 401(k) retirement funds has been a disaster, The National Memo notes:
Census surveys show that only a third of workers in their twenties have any form of retirement plan at work, compared to 62 percent of workers in their fifties.
But having a retirement plan and actually getting benefits are far from the same. Among all adult workers, only 43 percent say they have a vested right to either their own money they saved or money their employer set aside for them.
Betty Schueler, who worked as a bartender and restaurant server for 40 years at Baltimore-Washington International Airport, said she no longer harbors any illusions about retirement after recently losing her job:
Retirement is a word that's no longer in our vocabulary. I will never see that in my lifetime.