Laboring Longer a Growing Trend For Americans

AxSpark writes "More and more Americans have the tendency to work after retirement and this number is growing day by day. Last year this number was 6 million people of 65 and over working. The reason for that is quite evident: pensions are not enough for sufficient living."

Comments

Um, or...

[Anonymous Coward]

It could be that a lot of people are still healthy enough to continue working after age 65... and some people actually want to!

Re:Um, or...

[cptdondo]

Think again.... Most people don't have the resources. I know people over 65 who work 2 jobs, 7 days a week, to pay medical bills, rent, and food.

A handful of people work because they want to. Most work because they have no choice. Do you think the greeters at Wal-Mart are there because they want to? Or because they have to eat?

Your statement is the sort of spin I'd expect from the neocons. Ultimately, people want to work because the alternative is starving, or not taking your meds, or living on the street....

As someone who is nearing that age, I'm trying to figure out how I'm going to retire without working. It's not easy, and our broken medical system is a huge part of it.

Re:Um, or...

[daveime]

How is health care related to old age pensions being insufficient ?

Fix health care, and all you do is make old people live longer, thus further burdening the pension system.

The fact is, in most western countries, the average age is increasing. The people on pensions now are being paid with the taxes you and I pay today. When 30 years down the road, we are pensioners, there simply won't be any money left to pay everyone a pension.

I was advised as far back as 1987 that I shouldn't rely on the UK state pension, and should think about a private one ... here we are 21 years later, and oops, pension payouts aren't sufficient ... anyone surprised ?

Re:Um, or...

[everphilski]

Either they choose to keep working, or they didn't put enough of THEIR OWN money away for retirement.

Why should we trust someone else to plan retirement for us? Yes, yes, I know, 40 years ago was a different time, but for those who didn't work a cushy job that came with a pension (my paternal grandparents were farmers, my maternal grandparents knew the pension would be insufficient), you realize you need to sock money away for retirement.

Myself, I plan on being financially independent by 55 (and have the plan to do it), although I have no intentions to stop working. At that point in time, work is no longer a necessity, you aren't doing it because you NEED it, but because you WANT it, and I can stop to take a trip with my wife whenever we feel the urge, or go visit the kids, etc. It's a good place to be in.

Re:Um, or...

[gfxguy]

My Dad is 78 years old and still runs his own accounting business. I truly suspect, as does he, that if he didn't, he'd be dead by now.

He uses the extra money he gets during tax season to take expensive vacations, usually in the late summer or fall, with my mom.

Nearly everyone my parents knew that didn't keep active have already passed on.

That said, if people can't afford things, I'd say it's partial evidence of the giant failure of social security. Would those pensions have lasted longer if that extra 12% went into a 401k instead of the SS black hole? Do people realize that SS has, since the first year, taken in more money each year than it's paid out? Where did all this money go? There'd be trillions of dollars if they'd have saved and invested it (even at safe moderate rates of around 5%). So where is it? The federal government takes every penny extra and leaves a worthless IOU.

When Bush pushes a spending deficit of $400 billion, he's not including $200 billion (yes, nearly $200 billion) that the federal government is "borrowing" from SS.

Even people earning minimum wage would generally have sufficient retirement funds if they were saving 12% in a personal retirement plan.

People also don't understand their pensions. They should be able to tell way ahead of time if they will receive an adequate amount of money.

The band-aid solution that was SS is making less and less sense. A real goal would be to create an environment that allows people to save enough of their money for retirement. Get the government out of the SS boondongle, refine the tax structure so that people are encouraged to save. Hey, even make it mandatory if you have to, but at least allow people to decide for themselves how to do it.

Re:Um, or...

[Shakrai]

Private pensions aren't actually that good an idea. Lot of industries (steel, auto, airline) that gave pensions to employees are currently struggling under massive pension debt because of technological advances that have substantially reduced the workforces in those companies

That wouldn't be a problem if they had properly funded the pension plans to begin with instead of making promises that they had no intention of keeping.

Re:Um, or...

[gfxguy]

You're wrong about immigration... people still come here in droves. The only unwelcomed ones are the ones that come here illegally, and that's always been the case and it's always been quite clear.

On the rest... I have to agree. The federal government has phenomenally screwed things up for about the past 80 years or so. It's a bipartisan screwup that's been going on for generations.

There absolutely needs to be zero deficit. I know some would argue about deficit as a percentage of GDP; I hear things like "Well, you bought a house, right? That was like 3 times your annual salary! Sometimes it's OK to have debt." Yeah, sometimes the government has a war [insert witty thing here] sometimes there's a natural disaster... but to go deeper into debt, year after year, with no end in sight, is just plain ridiculous.

Anybody who has any financial difficulty right now (carrying debt, interest rates go up, spending too much of their income to repay debts) knows this... if you were the federal government's accountant, you'd quit at such reckless spending. And it's been shown time and again how if a private corporation or individual tried some of the accounting "tricks" the government pulls, they'd be spending time in jail.

Re:Um, or...

[Waffle Iron]

Either they choose to keep working, or they didn't put enough of THEIR OWN money away for retirement.

It is not possible for a significant fraction of the population to "put enough of THEIR OWN money away" so that they can sit on their asses for 25 years while enjoying a middle class lifestyle.

At the end of the day, somebody has to produce the goods that will be consumed each year. If too many people try to make "investments" for an extended retirement, they'll find that when they try to redeem them that the investments will be devalued until it matches the available goods produced by active workers.

The total goods consumed each year must be produced by people who work each year. The only way to manage this is to delay the average retirement age to maintain the overall ratio of workers vs. ass sitters. This really has nothing to do with whether the mechanism of supporting idle retirees flows through government paper notes or private paper notes.

Re:Um, or...

[gfxguy]

You can be financially secure by the time you're 60, though. All it takes is living below your means, something Americans just simply refuse to do. You are absolutely right that we've become a debtor nation, but as individuals as well as a whole country.

You know what? I don't care what anyone says; 99% of you don't need $100/month cellphone plan. If you are leasing your vehicle, you've likely made a really bad choice. I could go on and on... it's quite possible to save enough money to live purely off the interest (not touch the principle... and have a really nice "gift" to leave your children or favorite charity) if you make it a goal. Unfortunately, for most people, their lifestyle choices come first.

As we've delayed the maturing process in this country for so long, many people don't ever "grow up" and become responsible people. A nation of instant-gratifiers who whine that the government needs to help them out because they spent all their money on expensive cars and trips, put it all on credit so that they've ended up spending twice as much for something than they would have if they paid cash, and end up retiring with a buttload of debt that takes up half their retirement income.

Re:Um, or...

[gfxguy]

No, but living for today doesn't mean not planning for the future.

What's irresponsible to is to put yourself in a position where other people must take care of you.

Re:Um, or...

[penguin_dance]

Fortunately for us, we're still in a position to attract skilled immigrants to make up the labor shortfall...That gives us the benefit of their labor, without having to have paid their costs as they were growing up.

Some are skilled, some are not and many are here illegally. There is no labor shortfall--only a wage shortfall. When you've got companies that are allowed to take their business overseas to use what amounts to slave labor without fear of tariffs. Or using illegal labor here, which has driven down wages. These are not jobs that American's won't take. These are jobs that Americans expect a fair wage to be set.

And illegal immigrants are hardly cost-free. We're paying for their medical, their children's education and medical. They're paying no income tax, they send the bulk of their money back over the border and have no plans to become American citizens. That's hardly a recipe for a successful country.

Re:Um, or...

[duffbeer703]

What you're saying is that laissez faire economics that favors the plutocrats is preferable to are more logical nationalist or even socialist system.

Thousands of highly skilled workers made shoes in Maine in the 1980's. Today they are chronically underemployed and their communities are in disarray because our society allows Chinese children with an inadequate standard of living to manufacture them instead.

The fallacy that Chinese are only fit for stupid assembly work is just as racist as the notion that African-Americans should be restricted to the fields that was common among white folks in the 19th and early 20th century.

The United States imports millions of laborers from places like Mexico and Guatemala specifically because they are easy to exploit. There are thousands of unemployed, low-skill workers languishing on the streets or eventually in prisons because they have no place to work.

Re:Um, or...

[duffbeer703]

Well, you're wrong.

It benefits the offshore trading partners when a country like the US stops adding value to products and instead simply consumes. One way trade isn't trade, it's wealth transfer. The Europeans called it colonialism.

When you bought a widget for $1 made within your country, that money contributed to the US economy. The workers, the people who build factories, the people to harvest raw materials, power companies, the sandwich cart, the uniform supplier, etc. You're creating value.

When you buy the same widget for $0.10, you're injecting capital into the offshore trading partner's economy and gaining nothing in return. The offshore economy is adding value and creating wealth.

Just like the other guy who responded to me blaming the unions for all of our ills, you're misidentifying the symptoms with the disease. Immigrants aren't a problem, the problem is that government policy has made it increasingly difficult for low-skill Americans to get appropriate jobs.

Re:Um, or...

[WindowlessView]

Someone has a child; how does that put themselves into a position of dependency? And if it does, they shouldn't have had a child to begin with.

Wow. You really need to consider that life is a lot more complicated and messy than a couple of econ books.

First, 80% of the US population would have to wait beyond child bearing years, if ever, to be assured they have enough resources saved to have children. Do we really have to belabor what that does to society?

Second, there is no such thing as assured even when you have created a pile. People get sick or injured. Investments go sour. Jobs are lost and industries go away. It can be shocking how quickly a nest egg evaporates.

I am not suggesting that your message of responsible behavior is bad. It just needs to be tempered with reality and maybe a little compassion. I have met any number of people singing that song over lunch one day and quite a different song five years later.

Investments!

[gentimjs]

No problem, just privatize social security! We can trust GOP lobbyists to put our money in the next Enron and secure our financial future, right?! In all seriousness, "people" are too dumb to plan for retirement on their own. That, and a combination of being stretched too thin financially. That extra $5/week from lower taxes goes into the gas tank, not the 401k. Before everyone gets all uppity about "omg people just need to be responsible, not MY PROBLEM that they cant plan for retirement!" you are entirely correct - its not your fault that most people (whom have never been properly educated on the subject nor had such education/information easily accessible to them) are unable to plan for retirement. Its not their fault either.

Re:Investments!

[EastCoastSurfer]

Make it optional. I am smart enough to save for my retirement, so let me do it myself. I've already realized that there won't be any social security for anyone my age so I'm already saving with that in mind. Lets go ahead and take the next step and let me opt out of paying the social security tax completely. Obviously this won't happen since SS was never a 'savings' program anyways. SS was always designed as a wealth transfer program. A way to take care of the old by taking money from the young. The problem is that this plan only works when you have enough young people to take care of the old people.

Re:Investments!

[Anonymous Coward]

There is no such thing as "free medicine". There is medicine you pay for when you use it (Uninsured), medicine you pay for whether you use it or not (State-Sponsored/Taxpayer-Funded medicine), and hybrid models (most Health Insurance Plans with deductibles). I'm not advocating any of these, just pointing out the inaccuracy of pretending that there is such a thing as free medicine.

Re:Investments!

[SydShamino]

Make it optional.

Bad, bad, bad idea.

Social security is supposed to be the bare minimum income to subsist post retirement. By definition, anything less than that means you're can't survive. (If you really think social security today provides for luxuries, then we could debate reducing the percentages and payments.)

If you make social security optional, many people will chose to opt out (like you). Of those, some will invest on their own and earn more than social security would get them. Some though will earn less. By definition, the people who earn less can't survive.

What happens to all those people who lost their self-invested social security money and can't afford to survive? Simple. Government handouts . Just look at what's been happening recently with mortgages or the financial industry. You'd be foolish to think that the government wouldn't rescue any large group of destitute Americans whether those Americans did it to themselves or not.

Let me summarize then: Optional social security costs taxpayers no less than mandatory social security, because the government will have to pay for it all one way or another.

Oh, and producing large groups of destitute Americans is bad for social stability - and unstable societies protect its wealthy citizens far less than stable ones. It's sound planning to keep the masses subsisting regardless of your wealth.

Sure, blame the income

[Rob Kaper]

The reason for that is quite evident: pensions are not enough for sufficient living.

Or: expenses are not enough under control for sufficient living. We all spend too much money on frivolous nonsense during spring and summer of life, but we don't have to.

(Not blaming anyone personally, I'm the first to realise I might have a big problem if all the drinking and smoking just doesn't kill me in time.)

Re:If only...

[Anonymous Coward]

If only people didn't look to government solutions and planned for own retirements.

"Quite evident"?

[Reality Master 101]

Sure, some people are going to keep working because they need the money, but that's hardly proof of the fundamental reason for the trend. I think it's much more likely that it's related to the fact that people are living longer and healthier, and a lot of people (most?) don't want to just lie around the house.

In the "old days", 65 was one foot in the grave. These days, there are a lot more healthy 65 year olds that aren't content to believe that life is over and you might as well start waiting to die.

So what?

[MikeRT]

If you didn't earn enough money to support yourself in the lifestyle you want, you have no right to that lifestyle. I'm sick of the entitlement attitude that permeates this society. The day that the American Dream went from a dream of liberty, to a house, 2 cars, middle class family, dog, cat, etc. was the day that this country sold itself out to the highest bidder. If Ben Franklin were alive, he'd probably add a corollary to his infamous quip about security: they that lust after wealth more than liberty deserve neither; it was from that lust for economic equality, unearned money and sense of entitlement that most of the horrors of the 20th century were born.

Re:So what?

[langelgjm]

Yes, I too blame this problem on the "entitlement attitude."

It's not like people running out of retirement money has anything to do with people living much longer than in the past, or the skyrocketing cost of health care.

Re:If only...

[gentimjs]

If only people could afford too.

Re:One more way it could be.

[TheRaven64]

For a lot of us, the distinction isn't really there. I'm a freelancer, so the boundary between working and not-working is quite fluid. Sometimes I'm working on things I definitely know I will be able to sell. Sometimes I'm working on things I'm fairly sure I won't be able to sell, but which are fun. Sometimes I'm working on things that are fun, but I might be able to sell later. From some perspectives I work most of the time, but since a lot of it is stuff I never expect to be paid for it's not always such a clear-cut boundary. I'm not sure what retirement would really mean for me. Possibly that I'd stop expecting to be paid for anything I did, but since being paid isn't really the motivation for any of it I don't see that it would make a huge difference.

Re:Uhhh, what the hell are you talking about?

[R2.0]

You need to look at history, not present day. It's not that the boomers didn't have kids - they *delayed* having kids, and had fewer of them. There is a significant dip in the number of births in the late 60's (i was born in '68). I noticed when I was a kid that there seemed to be a lot fewer kids in my grade than the higher and lower grades; their response was that, when I was born, it was very "unfashionable" to have children.

So now the boomers are starting to retire, and their kids are in their 20's, maybe early 30's - not peak earning years. the bulk of the taxes comes from those later in their careers, and there are a lot FEWER of them than there needs to be. So, IF we can get through the next 20 years without bankrupting the system, the boomer's kids will be supporting me. I'm not holding my breath.

As for population growth in the US, it is mostly due to immigration and higher birthrates among immigrant populations. Xenophobia aside, this is a GOOD thing - Japan and Europe are about freaking out right now because they are simply not reproducing enough to support their aging population, but they won't accept immigrants into their society in any meaningful way. Americans are going to have to deal with their caregivers probably speaking a foreign language and having different color skin, but they will deal. Japan is placing their hopes in robots - anything but outsiders. And Europe is placing their faith in...?