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January 07, 2014 at 12:00 AM
The economy may be emerging from the Great Recession, but many retirement planners may find 2014 to be one of their most challenging years.
The reasons have to do with two workforce trends affecting the Baby Boomer generation: the growing number of older workers that are pushing off retirement and the still large number of Boomers that remain unemployed as a result of the recession.
The impacts are that more Boomers are ill-prepared to face retirement than members of the previous generation, while many expect to work part time for years into what they had assumed would be their break from the workforce.
Those are among the findings of recent research by the American Association of Retired Persons (AARP) Public Policy Institute.
The Institute has been keeping a close eye on the factors impacting the Boomer workforce that it explored in its October 2010 report, “Boomers and the Great Recession: Struggling to Recover.” A year later the Institute published a follow-up study of workers participating in the first study. This year the organization has been keeping an especially close watch on unemployment trends among those Boomers.
“Unfortunately, things are pretty much status quo according to the additional research that has been done,” said Sara Rix, a lead researcher with the Institute, and one of the authors of the 2010 and 2011 studies. “The big issue is the long-term unemployment rate among Boomers. It has absolutely skyrocketed.”
While overall unemployment numbers remain high among the general workforce, they are especially troubling at the oldest segments of the population, Rix notes. Despite their skills and experiences, older workers historically have a harder time finding suitable employment. The recession caused many to be out of work for two, three, even four years or more.
“Americans of all ages suffered during the recession. Older Americans, however, have relatively little time to recover from job loss, stock market losses, declining housing values, or having tapped into and possibly having exhausted their savings. Their ability to retire as planned and with the resources they had been counting on may have been jeopardized. How they coped, or tried to cope, has implications not only for those directly affected but for public policy as well,” according to the Institute’s 2011 updated report.
For its first survey, the Institute conducted interviews with 5,027 current or recent workers and job seekers aged 50 and over. Subsequently, “to obtain insights into how older Americans’ financial situation and perceptions about current and future well-being may have changed in the months since initial contact (when for a few months, at least, the economy seemed on the road to recovery) a brief online follow-up survey of a random sample of 1,304 of the original respondents was conducted in August 2011,” the report states.
