Will The Current Economic Crisis Lead To More Retirements?

Vox ^ | 10-31-2009 | Courtney C. Coile & Phillip B. Levine

[blam]

Will The Current Economic Crisis Lead To More Retirements?

Courtney C. Coile Phillip B. Levine
31 October 2009

Since the crisis began, the economy has shed millions of jobs. This column explains how stock, housing, and labour market fluctuations affect retirement decisions. While wealthier workers will delay retirement, a larger number of workers will be forced into retirement because of their inability to find new jobs. This increased involuntary retirement will likely exceed any work-seeking effect of diminished stock market wealth by 50%.

Over the past year, numerous stories in the popular press have suggested that workers in the US will delay retirement as a result of the current economic crisis. Diminished retirement savings and home equity have shrunk expected retirement income, so the standard story suggest older individuals will stay in the labour force longer.

It may seem surprising, then, that the number of new US Social Security benefit claims is sharply up since the crisis began (Goss, 2009), suggesting an increase in retirements rather than a decrease. Why are more workers retiring now if their expected retirement income is going down?

[snip]

[Neidermeyer]

If your retirement is based on an average of your last few years salary the time to get out is now.

[nascarnation]

I think a lot of folks like myself retired because they either got flushed and can’t find a new job, or were incentivized to go. I was lucky and got some great incentives.

I suspect there are a lot of folks like me who will switch from paying max Social Sec tax to collecting Social Security. That program will be in financial trouble much quicker than predicted.

[PugetSoundSoldier]

Might as well draw from Social Security as long as there are funds in the account! Give it 4-5 years and SS will be so broke - along with the Federal Government - that benefits will be slashed by 50% or more...

[goodnesswins]

Yep...same with my husband...just over 2 weeks ago....take the money and run! Although can’t collect soc sec for several years!

[Dem Guard]

“Why are more workers retiring now if their expected retirement income is going down?”

Something from SS now is better than nothing later!

[nascarnation]

I’ll start collecting June 010.

In case you are having qualms about when to start collecting, a little known provision of the law let’s you “start over” at any age up to 70.

http://www.bankrate.com/finance/retirement/3-financial-do-overs-with-social-security-1.aspx

[FrankR]

When I decided to leave my last job, I did so because of the current situation, and because there are not many jobs out there now, especially for a 64-year-old.

I'm still able to work - I'd RATHER work...retirement is boring. But, if the government prefers that I not pay into the system, but rather draw out of the system, then so be it.

If I can get a part-time or low-stress job, I'll be happier and probably be making more overall than I did on my last job, which was a sweatshop.

I'm totally against living on the government teat, but I figure I might as well get back what I've paid in all these years, rather than keep on working and supporting the obamaites of the world. They got all the handouts, stimulus, and the good paying jobs, so let them support me now.

I don't know if Atlas has shrugged yet, but I just made him hiccup.

[cranked]

Forced retirements, of course.

[5thGenTexan]

I certainly hope it causes a LOT of retirements in Washington, DC.

[fightinJAG]

Exactly.

Plus this sharp increase in involuntary retirements is another way in which unemployment numbers actually are even higher than the guvmint says.

[WalterSobchak2012]

I am in this boat, I don't really want to be retired - but I had to get out of my former employer before I or somebody else went postal on the cock sucking MBA's running the company into the ground.

The only work I have found since is presenting at trade shows for an asian chipmaker who needs "white face, white english" - interested work, lots of travel and reasonable money but not my old career by any means and barely a month and a half out of the year.

[TristinU]

Retirement is a big topic, as it's less advisable these days to put your retirement funds in the stock market or real estate, and that has people wondering about retirement annuities. By and large, you want to stay the heck away from them. Here's how retirement annuities work – you sell an insurance company the bulk of, if not totality of, your assets, and they give you a monthly stipend until you die. Your heirs, upon your expiration, get nothing. Now retirement annuities do guarantee that you'll see some money, but they don't mention the huge commission that agents get for it – not to mention whatever's left over – and your children might need quick payday loans to pay your funeral costs.