Sunday, June 15, 2014
Unplanned employment in the years leading up to retirement can thwart financial planning. Near-retirement individuals who are out of work or underemployed have likely reduced or eliminated their retirement plan contributions. They have probably even tapped into savings accounts to meet living expenses.
According to the U.S. Bureau of Labor Statistics, joblessness is chronic for older people; 4.7 percent of men and 4.6 percent of women over age 55 were out of work compared with the 6.3 percent national rate. Many workers over age 55 have been out of a job far more than a year.
Yet, the desire to work still exists. A Merrill Lynch survey of more than 7,000 Americans found 72 percent of respondents older than 50 say their ideal retirement includes some type of work. Over half said they expect to work because the need the income.
Elizabeth Fideler, a research fellow at the Sloan Center on Aging & Work at Boston College says many long-term unemployed older workers will likely get back into the work world as the economy continues to mend. Although “they won’t find things comparable to what they had before . . . [m]any of them will be under-employed, doing temp jobs or working part time, for lower pay and without benefits. It’s not really a very rosy picture.” But, continued work of any kind can aid financial plans, such as relieving pressure to file early for Social Security.
See Mark Miller, Can Older Unemployed Workers Salvage Their Retirement Plans? Wealth Management, June 13, 2014.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.