For many Americans, reaching 65 years of age does not equal putting up one's feet and relaxing post retirement. Almost 20 percent of the US citizens aged 65 and over continue to work part time or full time. This is the highest rate from 1962. The last time this happened was during the end of the Great Recession. An increasing number of seniors were compelled to stay in work for a longer period of time to survive.
According to Jean Setzfand, Senior Vice-President, AARP, the reason to work at that age was purely financial. He said that research has revealed that 34 percent of the respondents informed that money was the sole reason to continue working. Another survey by Pew Research in 2000 has confirmed the AARP data. Data crunchers at Pew found that 13 percent of Americans at age 65 or past continue to work either part time or full time. This number has only grown to 19 percent in 2017. If this trend continues, 32 percent of the boomers will do work past the age of 65 in 2021. In fact, the numbers can only increase. Since people have fewer pensions, and crippled with inadequate retirement savings, retiring at 65 years of age cannot be financially possible.
Setzfand said that a number of companies, for many years now, has shifted away from providing pensions and moved towards the 401(k) defined contribution plans. The problem in such cases is that the guaranteed income is on a lower base. Almost every worker becomes dependent on their Social Security as default. The traditional pension which lasted a lifetime has ceased to exist. She continues on to say that as per research findings of AARP, approximately 55 million American private sector employees do not enjoy any kinds of access to savings plans post retirement.
Paucity of retirement accounts
The AARP discovered the scene where retirement plans do not exist, only about five percent of individuals open their personal retirement accounts. These are known as Individual Retirement Accounts or IRAs. In such an environment, the specter of retirement is now 15 times tougher for most people.
As per the Labor Department, the population of individuals in labor force between 25 years to 54 years are not projected to vary between the present and 2024. It is estimated, however, that seniors will more likely continue to work compared to teenagers. Even now, more workers are present in the 55 years and over age group compared to workers between 16 and 24 years of age. This is only expected to widen.