Just how much the Great Recession reshaped what many baby boomers thought retirement would look like is becoming clearer: More than ever they expect to retire later or work when they’re “retired.”
In 1991, just one in 10 workers told the Employee Benefit Research Institute that they planned to wait to retire until they were older than 65. By 2007, three in 10 said that.
This year? More than four in 10.
Boomers cruising toward a traditional retirement suffered a financial comeuppance in the prolonged economic slump that began in late 2007. The downturn sapped jobs, stock and housing values, and interest on savings.
Many were also caught in the shift from defined-benefit pension plans to 401(k) plans that required workers to contribute toward their own retirement savings. Some didn’t, a choice that will leave them short financially.
Small wonder that, according to the Pew Research Center, boomers are the gloomiest of all age groups about the health and future of their finances. Boomers were more likely than other age groups to tell Pew researchers that they have lost money on investments since the recession hit. Nearly six in 10 said their household finances worsened.
Finally, employment-based health insurance for many retirees has been withering away, which is causing older workers to cling to paychecks.
Overall, the stage is set for a new normal: working in retirement.
That suits William Brockman just fine. The 65-year-old working retiree began a new job this year at a child-care center in Overland Park, Kan., where he delightedly calls himself “a shepherd to flocks of children” four days a week.
Brockman worked for the federal government for 33 years, leaving at age 59. But he soon found he needed to better his financial situation and have more contact with people.
So his first post-retirement job was as a grocery store courtesy clerk. When that ended, he jumped at the day- care center opportunity “in order to have more income, and I found that in retirement every day is Saturday, so to speak.”
The number of older workers has grown more rapidly than any other age group in the last few years. This year, 18.6 percent of those 65 and older were participating in the labor force, compared with 13 percent in 2002.
At the same time, older workers represent a disproportionately large share — 40 percent — of people who have been trying to get back into the work force for at least a year.
The scramble for re-employment is made more desperate for some who fight age discrimination and outdated skills. “The prospects are dim for older workers who lose their jobs,” said Christine Owens, executive director of the National Employment Law Project. “They have the highest rates of long-term unemployment of any age group.”
The unemployment rate of 55-and-older workers jumped from 3 percent at the end of 2007 to 7.4 percent in 2010 and settled at 6 percent earlier this year. Among the 65-and-older group, the jobless rate, which for years was 3 percent to 4 percent, pushed above 7 percent in 2010 before edging down to 6.5 percent this year.
Demographers warned about social and economic stress when baby boomers began retiring. After all, boomers — representing slightly more than one-fourth of the population — are hitting age 65 at the rate of 10,000 a day. One in every four 65-year-olds will live past age 90, and one in 10 will live past 95.