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Economic slump delays ride into retirement sunset for US seniors

(Agencies)
Updated: 2008-10-27 06:31

WASHINGTON  – US seniors are having to put off their golden years of retirement as the global economic slump affects their savings and pensions and the cost of living climbs.

A group of retired seniors gathers at the Brighton Gardens Assisted Living residences in Bethesda, MD to watch the final presidential debate between Democrat Barack Obama and Republican John McCain October 15, 2008. US seniors are having to put off their golden years of retirement as the global economic slump affects their savings and pensions and the cost of living climbs. [Agencies]

At least seven in 10 Americans older than 45 expect they will have to continue to work beyond 65, the usual age of retirement, a study by the AARP, a huge lobbying and interest group for people over 50, showed Monday.

Most of them said they would have to continue to work because they will need the money or will need to support members of their family.

"Not only those who are close to retirement are looking at their 401 K (pension fund) and recognizing that they simply don't have enough money to retire, but also those who are retired, are looking at their portfolios and recognizing that, in fact, they may have to go back to work," AARP director of workforce issues Deborah Russel told AFP.

With the exception of a few professions, such as police officer or pilot, there is no obligatory retirement age in the United States.

"In recent weeks, we've seen a huge surge in traffic on our website," said Tim Driver, director of Retirementjobs.com, which helps retirees find a job.

The site, which was created two years ago, has seen traffic double since the financial crisis hit the United States last month, and the huge increase in users "is almost entirely attributable to the downturn of the economy," said Driver.

"Baby-boomers particularly are finding that they need to delay their retirement or come out of retirement to come back to work, in large part because of the decline in their assets," he said.

Currently some 16 percent of Americans older than 65 are working, compared with 12 percent at the end of the 1990s, according to data from the US Department of Labor.

In the 1950s, before the introduction of health insurance in the form of Medicare for US seniors, 26 percent of older Americans worked beyond the usual retirement age, the data show.

With life expectancy getting ever longer and medical care more sophisticated, more and more retirees are expected to outlive their pension savings.

A study by auditors Ernst and Young showed that nearly two thirds of middle class retirees will run out of savings before they die, and advised that they rein back their outgoings to avoid falling into poverty.

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