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Posted on September 22, 2008

More and More Boomers Delaying Retirement

retirement pie chart

Source: Wall Street Journal

It had to happen. As defined-benefit programs go the way of the buggy whip and the rotary dial telephone; as savings rates drop; and as nest eggs shrivel due to stock market woes, more and more baby boomers are making an unpleasant discovery: unlike previous generations, they can’t simply stop working at age 65 and still make ends meet.

As the Wall Street Journal reports, the clear message of the economy to baby boomers is: “Not so fast.”

While it’s unpleasant to be forced to do anything, voluntarily delaying retirement can often be a good thing. From the standpoint of retirement income level, every additional year worked provides a triple benefit: it allows for additional savings to be accumulated; it at least creates the possibility of investment growth; and, of course, there is one less year over which retirement distributions will be spread.

Still, this development is ominous. It may not be the end of the world if the average retirement age increases from 65 to 66 or 67. But what if people are forced to work well into their 70s, or even 80s, to survive? Not a pretty picture…

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