Postponing Retirement - A Harsh Reality For Many

8/26/2008

posted by N. Sioris

Stumble It!

According to a recent AARP survey, one in four respondents 45 and older are planning to work much longer. One third of them, cited falling home values and shrinking investments as the main reasons.

U.S. labor statistics show that 16 percent of Americans over the age of 65 were still working last year, compared to 11 percent two decades ago.

Meanwhile, nest eggs are shrinking. Nationwide, the average American worker's 401(k) balance dropped to $64,000, down 7.5%, according to an August report by Fidelity Investments. Interestingly enough, the same report pointed out that the drop would have been closer to the market's average loss of 22%, except for the fact that many workers increased their average contributions by 7 percent, to $3,500. through the first half of this year.

At the same time, energy costs went up 30 percent, and gasoline prices were up 14.4 percent, according to federal figures. Couple these statistics with a just released U.S. National Home Price Index report showing a 15.4% drop in home values, the steepest national decline ever reported, and you have the recipe for why so many 60 something folks are unable to retire.

Budgets are blown out by the basics of everyday living; utilities, gasoline, and groceries not to mention, rising health care costs. Consequently, many retirement age Americans are postponing retirement indefinitely.