Financial insecurity is forcing many baby boomers to change their retirement plans, according to an AARP report, and many expect they’ll retire later than previously planned.
The Great Recession of 2007, along with a number of factors stemming from economic frailties, has caused boomers to fear even their own children’s futures. With social security benefits dwindling and inflation on the rise, it is no wonder why boomers feel insecure, says AARP.
Two-fifths of boomers (42%) said the age at which they expected to fully retire had changed in the previous three years, while 83% of those whose expected retirement age had changed reported plans to retire later.
“The recession has shaken the confidence of older Americans in their ability to manage financially in retirement,” says AARP, adding that 55% of boomers said they were either “not too confident” or “not at all confident.” Nearly three in five said they were less confident of having enough money for a comfortable retirement than they had been before the recession started, as of October 2010, and 14% expected their financial situation would worse. However, more than twice that number (29%) believed their financial situation would improve in the coming year.
Job loss has been a major problem for many Americans given the economic recession, and for boomers aged 50 to 64, holding onto jobs has proven more difficult than actually working their jobs, according to a recent report by the AARP Public Policy Institute. Of the 5,027 interviewed boomers ages 50 to 64, nearly 47% have claimed job loss as their main reason for not working, whereas 19% cited an “inability to find work.”
One-fourth (roughly 26%) of the subjects attributed their unemployment to sickness, disability or medical treatment. One belief held true in all interviewees’ comments, that a “bad economy” was to blame for workers’ unemployment.
What’s more, however, the recession has driven many baby boomers to make financial decisions they may not have made given a better economic environment. Of those surveyed, 11% reported having tapped home equity as a way to make ends meet, while nearly a third say they received financial help from family or friends and more than half, or 57%, withdrew from a savings account. The most often action taken to help improve their financial situation was to cut back on expenses.
View the report.
Written by Jason Oliva