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Oldsters Refusing to Step Aside to Free Up Jobs

Reliance on volatile 401(k)s breeds reluctance to retire

By Drew Nelles,  Newser Staff

Posted Sep 3, 2009 9:28 AM CDT
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(Newser) – Their retirement savings devastated by the financial crisis, older workers are increasingly postponing retirement, the New York Times reports, creating even more competition for scarce jobs. A recent survey found that four in 10 workers over 62 have remained at their jobs longer than they planned thanks to the recession. Our dependence on fluctuating 401(k)s for retirement is turning out to have a perverse effect on the economy, the Times notes. "It’s a sort of reverse automatic stabilizer,” says one economics prof.

When the economy is booming and needs workers to stick around, retirees with fat 401(k)s are cashing out. In recession, when they're not needed, their accounts are depleted, so they're declining to retire. By comparison, many European countries have recession-proof pensions; in Denmark, a worker gets 91% of her pre-retirement salary. Policymakers are examining the possibility of creating stronger retirement safety nets, but that may prove a challenge. “I don’t want to depend on anybody else in my retirement,” one would-be retiree says. “Not family members, not our children, and certainly not the government.”

Dee Jollie, a resident of Greenspring retirement community, discusses her thoughts on health care at a retirement community in Springfield, Va. Tuesday, Aug. 25, 2009.
Dee Jollie, a resident of Greenspring retirement community, discusses her thoughts on health care at a retirement community in Springfield, Va. Tuesday, Aug. 25, 2009.   (AP Photo/Gerald Herbert)
Virginia Ginnie Curran, a retired school teacher, ponders a question about her finances while sitting at her computer where she handles her bill paying Thursday Aug. 20, 2009, in San Diego.
Virginia "Ginnie" Curran, a retired school teacher, ponders a question about her finances while sitting at her computer where she handles her bill paying Thursday Aug. 20, 2009, in San Diego.   (AP Photo/Lenny Ignelzi)
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Retirement is kind of an elusive dream at this point. We tease at work about someday having to go around at the hospital with our walkers. - Barbara Petrucci, nurse

The financial crisis hasn’t affected me. - Jens Erik Soerensen, Danish retiree

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COMMENTS
Showing 3 of 33 comments
hybrid
Sep 4, 2009 12:47 PM CDT
oh fondue who was in charge of the congress? dems who was in charge of monitary policy? a lib......who was the fed chair..? a lib and who was in charge at fred and fan? oh yea socialist. remember what got us into this mess and no it wasnt gw it was a mandate buy dems that every american have a home , otherwise known as the SUB prime morgage. Now it is true that the gop helped in the mess buy not regulating the morgage lenders. Can you explain to me how if a home is suposedly the most important investment we make yet the people who sell us the means to get them have no checks to ensure ethics or a compliance department. But hey we are just to stupid to figure any of this out we should just leave it ot Barney frank and John mccain and those other jack asses thinking thier roalit;y. what a joke
Fondue
Sep 4, 2009 12:05 PM CDT
Yeah, the only reason they (republicans) didn't bailout Lehman Bros. was because AIG had the pension funds. Check out this article (pg 3 is about Lehman Bros.): http://www.thestreet.com/story...
oldgoat
Sep 4, 2009 11:07 AM CDT
Many companies want the old people because they show up every day to work on time. Many of the young kids could care less about a work ethic. I see no reason why a person should retire just because they reach say 65. If they are able to do the job and do it better than the next person then fine. However if they can't they should retire or be shown the door.
Money • US

 
pensions • Europe • retirement • recession • savings • 401k • financial crisis • 401(k) plans

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