The recent Wall Street Journal article reporting that a surprisingly high percentage of Americans are likely to delay retirement is causing a real buzz and highlighting the problem that almost everyone in the retirement industry knows: Most people are not saving enough to retire comfortably. Based on a Conference Board survey of 15,000 workers age 45-60, 62% said they are likely to delay retirement — a number that’s up 20 percentage points from just two years ago.
Even though the stock market has recovered and the housing market is showing good signs in some areas of the country, many workers drew down their savings and some used credit cards to pay bills during the recession. Add to that the tepid increases in pay and continued high unemployment rates, and you begin to understand the problem.
The implications for younger workers are fewer opportunities as older employees stay on the job; additionally, with low confidence in the long term viability of Social Security and lessons learned from their parents and older workers, younger workers might be ready to save more — especially since they have not yet hit the peak spending years associated with buying houses and raising families.
The American workforce is likely to get grayer due to longer life spans and better health, giving employers a larger labor pool. But with post-retirement health benefits rare and getting even more so, many workers plan to stay on in order to keep their health insurance, resulting in higher health care costs for employers.
