11/21/2011 3:18 PM ET|
Over 55 and desperate for work
Baby boomers who've seen their savings decimated aren't so much looking forward to retirement as trying to postpone it. For those without jobs, it's especially hard.
Fred Edgar, a 61-year-old unemployed product marketing manager, spends his days scouring the Internet and networking with former co-workers to find work. Laid off from Honeywell last October, the Dighton, Mass., resident needs to rebuild a retirement nest egg that lost more than 50% its value over the past four years. He's already pulled out $35,000 to keep himself afloat.
"All these things I planned for and paid into have taken a beating, and I'm worried there will be nothing there when I need it if I don't get hired soon," Edgar said. "It's not a place I thought I'd be at this point in my life. It's spooky."
Edgar isn't the only one spooked. Millions of aging baby boomers on the cusp of retirement not only lost their jobs in the Great Recession but also saw their savings eviscerated. Remaining in the labor force longer than planned is their only option for replenishing what they lost.
Yet workers in their late 50s and older face bleak job prospects. During previous downturns, unemployment among people 55 and older was lower than for other age groups, which some economists attributed to older workers' greater experience as well as union seniority rules. Earlier generations in this demographic group had compelling incentives to retire and not work, thus potentially lowering the unemployment rate. Mandatory retirement at age 65 or earlier was a given in most industries until age-discrimination laws were enacted. And, more important, when workers did approach retirement, they were confident that their defined-benefit pensions and Social Security benefits would suffice. Now, defined-benefit pensions have been replaced by less-secure 401k's, which fell prey to the 2008 stock market crash.
The shift from defined-benefit pension plans to defined-contribution plans encourages workers to continue working. Under a defined-contribution system, the longer a person works, the more he or she can save. Most pension plans, on the other hand, cap the payout after a person works a certain number of years. "Why would you want to tell someone, 'You worked 30 years . . . no matter what you do afterward it doesn't help your pension, so you might as well retire,'" asked James Sherk, a senior policy analyst in labor economics at the conservative Heritage Foundation.
The death of the gold-watch retirement
Unemployment at the peak of the current downturn for workers 55 and older, now 6.8%, was 40% higher than it was at the height of the last major recession in 1982, according to the Bureau of Labor Statistics.
One reason for the rise: A greater proportion of older workers has remained in the workforce. Early retirement -- once considered part of the American Dream -- is losing ground. The workforce participation rate for individuals 55 and older grew to 40.2% in 2010, up from 39.4% in 2008 and 29.4% in 1993, according to Census Bureau data. Relatively recent changes in Social Security law may account for the dramatic increase.
Since 1939, earnings-test laws have precluded people from collecting their maximum Social Security benefits if they earn more than a certain amount. In 2000, a law passed under President Bill Clinton removed limits on the amount people who had reached full retirement age -- then 65 and now 66 -- could earn before their Social Security checks were reduced. But the law left in place rules that workers ages 62 to 64 get their benefits reduced $1 for every $2 they earn above $14,160 a year.
The sharp decline in retirement assets from the 2007-08 stock market plunge has also contributed to older workers remaining in the job market. Defined-benefit pensions have gone from covering 80% of private-sector workers in 1985 to only 20% in 2008.
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Wake up people! Our economy needs consumers with $, a lot of consumers, not just the top few. Cutting government jobs and is a job killer, stop killing our economy by cutting consumers! Responsible government spending creates jobs. NASA not only created jobs but revolutionized our technology in many areas. Internet created jobs and is the only economic stimulus still working. We need infrastructure, power grids, broad band, and research that can be sold to the private sector. The private sector has been stealing from the government forever, stop corporate welfare. The GoP likes a flat tax , then let it be so, take the top off of the payroll tax and lower the rate, problem solved. The public is not aware of the 100,000/yr top on payroll tax and the media seems to like it that away. I am for a flat tax on income tax as well, with a responsible cost of living deduction for all and a short form filing similar to what we have now. This is what people think of when they say they want a flat tax. When is the media going to inform the public and stop the cover up. Medicare is a flat tax, but the rate does not match the cost, this is a budget problem, raise the rate! Budget analysis needs work in other areas as well. If you are going to pay for defense out of the income tax you need to raise the rate. Maybe we need a defense tax to clear the analytical budge process and inform the public. The rate for the appropriate tax should complement the cost assigned that tax. This is how you balance a budget. If you don't assigned a cost a revenue you can never balance. What tax is assigned to the cost of interest, if you say general fund, then all rates must be increased. Does anyone in congress know how a budget works?
Find out why the Occupy movement will NOT allow It's self to be co-opted by any status quo political party or make claims of yet another party name to arise for Representative govt. The elites of Crony and Corporate Capitalism have long been puppet-mastering all levels of govt any or either parties.
Their agenda is Profit over people with huge levels of exploitation on the citizen masses through end user Consumerism, Taxation and Wage-Slave income control. You can be reduced to mere homeless existence and still face contributing too the profits and Taxation used to benefit the privileged elites in this Kleptocracy we live under. Why do you think half of the eligible voters don't vote? Apathy of course, they know those who have the wealth and power will do and get what they want in our 235 year old system.
What does it take for people to act, and say NO MORE business elites having everything their way as owners,rulers and dominators of Capital Huh? We are the 99% they are the less than 1% getting everything their way because of WHO has ownership plus rule and control under a Kleptocratic Republic. Just how hard can it be to strip this Kleptocracy of it's existence and out-law any way,shape or form from existing! National ownership plus direct rule and control over money,business and govt must be directly that of the citizens or face inequality regardless of what society label slogan is claimed. Hence each citizen must have their legal share equal to their fellow citizen. Real Democracy Greek origin "The people rule".
So how come the congress can get retirement after only serving 5 years and this comes with Health care benefits and the out-of-work average joe can't even find a decent job to earn a retirement along with paying for their own health care?
How come millionare baketball players and owners can argue about how much more money they want and then pass the price increase onto the average joe?
Because you average joes have your heads in the sand. Wake up America... get a gun permit, and train on a firearm cause you know what's coming! The thug in ghetto already knows how to use firearms and the rich people just hire the firepower!
Wise-up people Ruhappy is serious with just reasoning, I am 57 been living in Florida the past 15 years which over 10 of those years "mostly since 2001" has been unemployed without any unemployment compensation or any form of income. The employers here in Florida are ruthless tyrants of Capitalism utilizing crony friends, green-horn immigrant cheap labor and the young and naive college degreed ego-maniacs that believe their privileged above most others etc.
USA has long been a Kleptocratic Republic of/by/for the well connected wealthy few, i.e. The elites of both Crony and Corporate Capitalism puppet-mastering every level of govt and the court system.You do NOT get any citizen Democracy under any type of a "REPUBLIC" as they either regime or representative run in "the hands of the few". Compound that with Crony and Corporate Capitalism is the stage set for mass citizen fleecing.
Wake-up people the well connected wealthy few are making the citizens face Capitalism while they utilized Socialism exclusive for their profits! I am not against Socialism if it is used fairly! The most recent example of what I 'm talking about is the private Federal reserve bailing out the World Banking system again with 7.77 Trillion this is recent beyond the George Bush 10/08/2008 Tarp bail-out. So it's gone from Billions to Trillions while the American citizen gets what the repercussions of what this will mean if we don't put this Kleptocracy out of doing business and legal take the country over under real true Democracy that's denied everywhere because of He or She who has the Gold rules dark age mentality.
Go to You-tube enter in the search box The young turks Exposed fed bailout look for fuzzy-face Bernanke link to get the truth, you will be shocked. The Wall street global elites are forcing their predatory failed proven economic form of money distribution down the throats of the global citizens through the world central banking system.
I am half way to 61 and have been unemployed for 3 yrs. My health is excellent and I am very active.
I went through my savings and cashed in my 401 K years ago and literally have no income. I was living in a nice home with a man who had terminal colon cancer as his housekeeper, cook, lawn service in exchange for a room until he passed away.
I sold my nice car and bought a clunker and I went back to school on grants. Then the grants were cut and I could not afford to continue. Even though my instructors in many of my classes were in my age group there was age discrimination.
Recently, I moved to the Northeast to live with my daughter just to have a roof over my head.
I have signed up with every recruiter and temp service in the area. I apply for about 30 jobs per day and rarely get an interview and when I do get one, I am not hired even though I have all of the qualifications and skills needed for the job.
My daughter has been supportive,but I think that she believes that I should be doing more to get a job.
I am totally at a loss about what to do next. I know that I can not stay here indefinitly without work but I have no prospects.
I always thought that at 60 I would be looking forward to retirement now I am scared that the rest of my life will be spent just trying to survive.
Older workers are not necessarily more expensive to employ as Janet has alluded. I am 61 and I am healthier than most of my younger co-workers. I rarely call out sick and I have no "chronic illness" nor do I take any medications. I exercise and watch my weight to stay healthy.
My husband on the other hand has been unable to find a job in several years. he too has sent out hundreds of resumes and when he does get to an interview, as soon as they realize he is older than 50, the interview is abruptly over. So he will take early retirement at age 62 and hopefully I will remain healthy and continue to work.
I am glad at age 17 I decided to join the Air Force. A lot of my classmates laughed at me. Fast forward 26 years later I retired with a great pension, seen the world, used my GI Bill to get a Master's degree and used my veterans prefereance to get back into the system. My heart goes out to those who have worked hard all of their lives but sometimes you have to go out of your comfort zone and leave the hometown behind.
To those that say "start a business". I have been self employed most of my life...the brutal truth of this is...our system does not treat such fairly. Self employed persons pay 10% to Social Security with no matching employer contribution. If you are employed, you pay 7.5% with matching from employer for a total of 15%. You also have no access to unemployment benefits. (Please spare me the private unemploy insurance debate, not viable) So called "entrepreneurship" is a ruse for the common man. Try being informed about the realities of what you spout.
Its utterly unfair, but it is a fact of life. Older workers cost more to take care of. So as not to lump myself in with the "healthy and young", I'm 47 and have special needs child. We too are a burden on the company health insurance. If I were an employer, I could help but consider the cost of not just older workers, but anyone with some medical condition.
No one thought about this stuff when they were slamming health care reform.
Low risk dividend and bond investing helped me gain during recession by buying low and selling high and reinvesting the income gains every month and quarter
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