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The Center for Retirement Research found that while half of American households are retirement-ready at age 65, more than 85 percent would be prepared by age 70.
For many people that’s only possible if they have a job. And unemployment for workers age 55 and older continues to increase at a rate faster than that for any other group.
According to July statistics from the U.S. Department of Labor, job seekers age 55 and older were unemployed on average 51.4 weeks, which is about 17 weeks longer than for their younger counterparts.
In December 2007, only 22.9 percent of older job seekers were out of work for more than 27 weeks. Last month, that figure was 50 percent.
The Center predicts that when unemployed older workers do find work, they will see a decrease of 10 to 17 percent in their earnings and 26 to 34 percent in their assets through 2018. They will also be up to 10 percent more likely to be laid off again.
Sara Rix, a policy analyst with the Washington D.C.-based AARP Public Policy Institute, said even before the recession, many baby boomers had planned to stay active and remain engaged in the workforce through volunteering or consulting.
"Now, I say if you want to work in retirement, then don’t retire," said Rix. "If you become unemployed and you’re over 55, the chances are pretty good you’re not going to find something with a good salary and benefits right now."
She said more workers are recognizing that maybe remaining a year or two longer in the labor force has advantages that are more important today than before the recession.
"For each additional year you work, you replace an earlier year of lower earnings (in terms of the calculations for your Social Security benefit)," Rix said. "That may not have been so important when your house was escalating in value or you were sure your mutual fund wasn’t going to fluctuate in such extremes."
Richard Johnson, director of the program on retirement policy at the Urban Institute in Washington, D.C., said workers 62 and older have been re-entering the workforce at a steady pace since the mid-1990s. But in 2009, just when the bottom was falling out of the economy, older workers were seeking jobs at unprecedented rates. By 2011, however, those rates began to decline for workers age 62 to 64.
"It’s complicated because jobs were tough to come by," said Johnson. "A lot of (older workers) who left careers were unable to find new jobs. They were giving up and retiring early. That participation rates peaked in 2009 didn’t mean people could afford to retire. They probably didn’t have a choice."
He said they also didn’t have some of the retirement safety nets of prior generations.
"Pension plans aren’t nearly as common as they once were 30 years ago," said Johnson. Older workers are "depending more on their savings, but they have rising health care costs and other expenses."
He said employers used to offer former workers health insurance that would tide them over until they qualified for Medicare. But that is much less common.
"That means retirement is not as secure as it used to be," said Johnson. "That’s why people are working longer."
Rix said some older workers are seeking re-training opportunities, or starting their own businesses.
Beril Basman, 59, a former vice president for strategic management who was laid off in 2009, now runs her own Chicago-based consulting business.
"Employers are much more careful about spending money by hiring people from the outside to do consulting," said Basman, who worked for a Chicago association. "I started [consulting in 2009]. My colleagues who do similar work, said when you quote, what you’re often getting are fees that are [the equivalent to those from] 10 years ago."
Woods has a home-based business marketing energy services. He’s exhausted his savings and has been relying on income from a part-time job, Social Security benefits and unemployment compensation, which ends in December.
"All of my needs are met, but the pleasures in life, the extras, the eating out, the vacations and trips have all been cut back," said Woods. "I’m driving a 10-year-old car. But these are lean times, and I don’t believe they will last forever."
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