After the stock and housing markets bottomed out three years ago, many older Americans saw their nest eggs disappear and had to delay their plans to retire. Or at least that’s the story that news outlets have been reporting for a while. New data show, however, that a larger share (17%) of individuals over age 62 retired between 2008 and 2010 than during any other two year period in the past decade.
For some seniors, this may be good news – they were able to continue with their existing plans for retirement despite the poor economy. Yet for many older Americans, retirement may not be a choice, but something they were forced into after being nudged out of the job market. The unemployment rate among seniors is nearly double what it was four years ago and it takes seniors almost twice as long as younger adults to find a new job.
The one group of seniors who haven’t seen an increase in retirement rates are those with a college education. According to the Urban Institute’s Richard Johnson, this is likely due to two factors. First, workers with college degrees lost fewer jobs during the recession than people with lower levels of education. So the well-educated weren’t as likely to be pushed into retirement by unemployment. Second, college-educated workers were more likely to have financial retirement plans that were affected by the recession – plans that depended on stocks and housing equity instead of Social Security payments and pensions.
Many of the news stories claiming that workers were delaying retirement due to the recession were based on surveys of seniors about their future plans. Which raises the question: Who do these studies and news reports actually apply to – is it the well-educated and wealthy or is it all seniors, including the working class?
Retirement Isn’t Dead Yet
Urban Institute // Richard Johnson // October 7, 2011