September 17, 2009
One effect of the recession appears to be a general movement
toward an extended career in the workforce. Baby boomers, in
particular, apparently have decided to put off their retirement plans
for a few years.
Researchers at the University of Michigan collected data from 4,412 older Americans in April and May of this year. In particular, those over age 51 were quizzed about career plans.
"We asked the same older workers what the chances were that they would still be working full time after age 65, and they went up from 47 percent to 57 percent between 2008 and 2009---a very rapid change after a long period of stability," said Michigan economist David Weir, director of the Health and Retirement Study. The chances of working past 62 went up from 60 percent to 65 percent.
Weir presented the findings on Capitol Hill to mark the 60th Anniversary of the Institute, the largest academic social research and survey organization in the world.
"This study is the first to show a clear change in work expectations among the same group of older Americans," Weir said. "The findings provide compelling evidence that people have changed their retirement plans as a result of the financial crisis."
The survey found what Weir called an "historically unprecedented" exposure to the stock market, with 62 percent reporting stock holdings in 401(k)s, IRAs, mutual funds, or other vehicles. Reported losses ranged from 20 percent in IRAs and 401(k)s to 25 percent in mutual funds, and 30 percent in stock in single companies. All of this, of course, could help explain why boomers plan to work a while longer.
The survey also found that nearly a quarter of older Americans reported a decline in the value of their home. Slightly less than half still have home mortgages, and about seven percent of these reported that they are "under water," owing more on their home than it is worth. About three percent of those with a mortgage said they had fallen behind on payments, but just three-tenths of one percent reported they had entered foreclosure.
But overall, older Americans seem to be weathering the financial storm better than the younger generations.
"Many more older Americans are experiencing the financial crisis through the housing troubles of their children than through their own difficulties," Weir said. "Nearly 10 percent said someone else in their family had fallen behind on a mortgage."
Nearly 24 percent surveyed after the crisis said they were not satisfied with their financial situation, compared to about 17 percent when they were surveyed in 2008.
