The Recession's Impact on Baby Boomer Retirement
Workers on the verge of retirement continue to be worse off than before the recession
The recession has severely limited the retirement prospects of the oldest baby boomers. Some older adults will have to work longer to try to recoup their stock market losses and falling home values, but others have already been forced into retirement earlier than planned and are struggling to adapt to a lower standard of living.
Many older adults have found themselves forced into retirement earlier than planned. The unemployment rate for workers ages 55 to 64 more than doubled from 3 percent in 2006 to 7.1 percent in 2010. While the unemployment rate among older workers is more modest than what younger employees are experiencing, it's harder for older workers to find new employment. The median duration of unemployment for workers ages 55 to 64 jumped from 11 weeks in 2007 to 31 weeks in 2010. "It's been a tough struggle for today's unemployed older workers to get back into jobs," says
Since 2007, household income has fallen by 6 percent for adults ages 55 to 64, which makes it more difficult for this group to prepare for retirement. Many older workers aren't earning enough to build a significant nest egg. In 2010, about one-third of workers age 65 and older were in low-wage jobs that paid less than
Declining retirement benefits.
Many people approaching retirement lack employer-sponsored retirement benefits. Some 44 percent of full-time workers in their 50s have neither a traditional pension nor a 401(k) with their current employer. And those who have retirement benefits may not be fully taking advantage of them. "People who have 401(k)s aren't necessarily saving enough to retire," says
Few options to recoup losses.
Individuals on the verge of retirement have little time to accumulate additional retirement savings. Older adults may have to reconsider when they retire or how much income they can expect in retirement. GAO reports that stocks, on average, have not fully recovered from their low point during the recession and housing prices have also not recuperated. "It used to be that your best retirement investment was your home," says
Increasing reliance on
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