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Many won't be able to retire until 80s

We all think it's a panacea. If you don't have enough money saved for retirement, you've got a few ways to close the gap between what you have and what you need in your nest egg: Save more, invest more aggressively, and/or work longer.

Well, it turns out that working longer is indeed an option, according to the Employee Benefit Research Institute's latest study. The only problem is that the latest research shows that you'll have to work much longer than you anticipated.

In fact, many Americans will have to keep on working well into their 70s and 80s to afford retirement, according to the study, titled "The Impact of Deferring Retirement Age on Retirement Income Adequacy."

What's more, it's even worse for low-income workers, according to Jack VanDerhei, one of the co-authors of the study. Those who earned (on average over the course of their careers) less than $11,700 per year, the lowest income quartile, would need to defer retirement until age 84 before 90 percent of those households would have just a 50 percent chance of affording retirement.

Those who earned between $11,700 and $31,200 will need to work until age 76 to have a 50 percent chance of covering basic expenses in retirement. Those who earned between $31,200 and $72,500 will need to work to age 72 to have a 50 percent chance and those who earned more than $72,500, those in the highest income quartile, catch a break; they get to stop working at age 65 to have a 5 0/5 0 chance of funding their retirement.

So what can be done to make sure you have enough income in retirement? Well, the sad truth is that not working is no longer an option and working past age 65 is fast becoming a fact of life, at least for those in the lowest three income quartiles.

One bright spot, according to John Nelson, co-author of "What Color Is Your Parachute? For Retirement" is that working works: "For those in the lower half of the income spectrum, delaying retirement from 65 to 69 has a profound effect," he said. "It increases retirement income adequacy by 25 percent to 50 percent! That's a powerful incentive."

Now the reality about EBRI's findings is that many Americans -- who are able to continue working and whose skills are still in demand -- are already working past age 65. In 2009, 17 percent of Americans age 65 and older were in the labor force, according to recent AARP Public Policy Institute report, "Family Income Sources for Older People, 2009."

Not only are people working past age 65, they are hunting for second jobs as all, according to Art Koff, founder of "Even those older Americans who are still working are looking for ways to make additional monies," he said.

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