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Retirement Planning > Retirement Investing

Some boomers will never retire, survey finds; Investment loss a critical factor

By Staff Writer

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A little more than half of American baby boomers say they may delay their retirement – and an additional 16 percent say they never expect to stop working, according to a national survey released Thursday by the Pew Research Center’s Social & Demographic Trends Project.

The Pew Research survey indicates that the amount investors lost in the market meltdown is a big factor in whether they are re-thinking their retirement plans. Among the “Threshold Generation” (what Pew Research Center calls those aged 50 to 64), as well as among other age groups, higher-income earners are only slightly less likely than lower-income adults to have considered postponing retirement. Regardless of income or age, Pew Research Center senior editor Rich Morin writes, those who have lost 40 percent or more of their investment nest eggs are roughly twice as likely as those who haven’t lost money in the market meltdown to say they have thought about delaying their eventual exit from the workforce.

Survey results found 52 percent of full-time workers age 50 to 64 say they have thought in the past year about postponing their retirement. The survey shows the boomer population maintains a much higher proportion among all other ages in expecting to work beyond retirement age – only 37 percent of full-time employed adults overall are thinking about postponing their retirement.

Members of the Threshold Generation are twice as likely as younger workers to say they never plan to retire (16 percent vs. 8 percent), writes Morin. “Moreover, the Thresholders who do plan to retire someday say they plan to keep working, on average, until they are age 66 – when they would be four years older than the age at which current retirees 65 or older report that they stopped working.”

Recession factors aside, Morin says labor trends in the past decade also influence retirement time frames. Among those 65 and older, research finds the labor force participation rate has increased from 12.9 percent in 2000 to 16.8 percent in 2008. A similar trend is also evident among the Threshold Generation (older boomers).

Gender among older boomers also plays a role. The survey found six in ten women working full-time in this age group say they have reconsidered when they will retire, compared with slightly less than half of all men (61 percent vs. 45 percent). This is a gender gap, Moring writes, that is consistent with other research that has found women often approach retirement age with fewer economic resources to draw on than do men.

Income levels among this age group didn’t make much of a difference; Those with family incomes of $75,000 or more are as likely as those earning less to say they have considered delaying retirement. Specifically, 69 percent of those with family incomes under $30,000 as well as 76 percent of those with incomes of $100,000 or more say the recession will make it harder to take care of their financial needs once they retire.

With little time to make up lost income, members of the Threshold Generation are the least confident age group when it comes to having enough money to make it through retirement. Barely two-in-ten (21 percent) of those ages 50 to 64 say they are “very confident” that they have enough income and assets to tide them over, according to the survey, compared with 37 percent of fulltime workers younger than age 30 and 40 percent of those ages 65 and older.

Overall, retirement fears – regardless of gender or income – are on a broad scale among those aged 50 to 64, according to Pew Research. About three-quarters of adults in this age range say they lost money in mutual funds, individual stocks or retirement accounts such as a 401(k), compared to barely half of those younger than 50 (76 percent vs. 54 percent).

About the study: The Pew Research findings are based on a telephone survey of a nationally representative sample of 2,969 adults conducted from February 23 through March 23, 2009. An earlier report based in part on that survey explored the varied impact of the recession on young, middle-aged and older adults. This new analysis examines in greater depth the impact of the recession on the retirement plans of one particular group: adults ages 50 to 64 who are employed fulltime. Poised at the threshold of retirement, these working Americans have suffered the greatest losses in their nest eggs and worry the most about their financial future.

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