Anchor ads are not supported on this page.

4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs

Eighty Is the New 65

You’ve probably heard the same thing in recent years that I have from beleaguered workers in their 50s and 60s: “If I can just make it to 65, I’ll be OK.”

For more than half a century, age 65 has been the magical retirement age for many American workers. It’s a watershed in our culture.

Yet, you might want to rethink that. A new study by the Employee Benefit Research Institute in Washington, D.C., forecast that today’s Baby Boomers and Gen Xers might have to work well into their 70s or early 80s to afford retirement.

“Our search finds that many people may have to delay retirement far beyond age 65 to increase the probability that they have enough money to cover their retirement expenses at a comfortable level,” says EBRI Research Director Jack VanDerbei.

Sponsored
Sponsored

“What really makes a positive difference, we found, is if people who continue to work after 65 also contribute to a defined contribution retirement plan.”

The value of 401(k) defined contribution retirement plans is that older workers can set aside more money for their retirement years as they age. That’s, of course, contingent upon them having continuous employment.

According to the federal Bureau of Labor Statistics, workers over age of 55 in 1988 accounted for 12.4 percent of the American workforce. That percentage remained the same in 1998, but in 2008 it had swelled to 18.1 percent of the workforce and the bureau’s projections expect it to climb to 23.3 percent by 2018.

But that federal report fails to take into account the current economic climate, where unemployment has risen dramatically since 2008. Because of that, even more workers are likely to have to work later in life because of time lost to unemployment in recent years.

Of course, the people who face the steepest challenge are those on the low-end of the wage scale. EBRI estimates that workers making less than $11,700 a year would need to continue working to the age of 84 to have a 50 percent chance of affording a basic retirement.

Workers earning up to $31,200 would have to work until age 76 to have a 50 percent change of handling retirement costs. For workers earning up to $72,500, the key work age would be 72.

Only workers now earning more than $72,500 a year would have a chance of retiring comfortably at age 65, according to the EBRI study.

Since the two most unpredictable major expenses of retirement are inflation and the cost of uninsured medical needs, EBRI says workers who save through 401(k) plans have a better chance of securing a healthy financial future in retirement. And, the longer they work and save, the better their chances.

A lot of this is difficult to swallow for today’s older workers.

About one-third of the 2.1 million unemployed adults in California today have been without work for more than a year. With a state unemployment rate still running at a high 11.7 percent, any older workers caught without jobs will pay for it by working longer in their lives just to earn enough to have a comfortable retirement.

For everyone except a fortunate few, age 65 is just another number now.

The latest copy of the Reader

Please enjoy this clickable Reader flipbook. Linked text and ads are flash-highlighted in blue for your convenience. To enhance your viewing, please open full screen mode by clicking the icon on the far right of the black flipbook toolbar.

Here's something you might be interested in.
Submit a free classified
or view all
Previous article

Halloween opera style

Faust is the quintessential example

You’ve probably heard the same thing in recent years that I have from beleaguered workers in their 50s and 60s: “If I can just make it to 65, I’ll be OK.”

For more than half a century, age 65 has been the magical retirement age for many American workers. It’s a watershed in our culture.

Yet, you might want to rethink that. A new study by the Employee Benefit Research Institute in Washington, D.C., forecast that today’s Baby Boomers and Gen Xers might have to work well into their 70s or early 80s to afford retirement.

“Our search finds that many people may have to delay retirement far beyond age 65 to increase the probability that they have enough money to cover their retirement expenses at a comfortable level,” says EBRI Research Director Jack VanDerbei.

Sponsored
Sponsored

“What really makes a positive difference, we found, is if people who continue to work after 65 also contribute to a defined contribution retirement plan.”

The value of 401(k) defined contribution retirement plans is that older workers can set aside more money for their retirement years as they age. That’s, of course, contingent upon them having continuous employment.

According to the federal Bureau of Labor Statistics, workers over age of 55 in 1988 accounted for 12.4 percent of the American workforce. That percentage remained the same in 1998, but in 2008 it had swelled to 18.1 percent of the workforce and the bureau’s projections expect it to climb to 23.3 percent by 2018.

But that federal report fails to take into account the current economic climate, where unemployment has risen dramatically since 2008. Because of that, even more workers are likely to have to work later in life because of time lost to unemployment in recent years.

Of course, the people who face the steepest challenge are those on the low-end of the wage scale. EBRI estimates that workers making less than $11,700 a year would need to continue working to the age of 84 to have a 50 percent chance of affording a basic retirement.

Workers earning up to $31,200 would have to work until age 76 to have a 50 percent change of handling retirement costs. For workers earning up to $72,500, the key work age would be 72.

Only workers now earning more than $72,500 a year would have a chance of retiring comfortably at age 65, according to the EBRI study.

Since the two most unpredictable major expenses of retirement are inflation and the cost of uninsured medical needs, EBRI says workers who save through 401(k) plans have a better chance of securing a healthy financial future in retirement. And, the longer they work and save, the better their chances.

A lot of this is difficult to swallow for today’s older workers.

About one-third of the 2.1 million unemployed adults in California today have been without work for more than a year. With a state unemployment rate still running at a high 11.7 percent, any older workers caught without jobs will pay for it by working longer in their lives just to earn enough to have a comfortable retirement.

For everyone except a fortunate few, age 65 is just another number now.

Comments
Sponsored

The latest copy of the Reader

Please enjoy this clickable Reader flipbook. Linked text and ads are flash-highlighted in blue for your convenience. To enhance your viewing, please open full screen mode by clicking the icon on the far right of the black flipbook toolbar.

Here's something you might be interested in.
Submit a free classified
or view all
Previous article

Temperature inversions bring smoggy weather, "ankle biters" still biting

Near-new moon will lead to a dark Halloween
Next Article

Todd Gloria gets cash from McDonald's franchise owners

Phil's BBQ owner for Larry Turner
Comments
Ask a Hipster — Advice you didn't know you needed Big Screen — Movie commentary Blurt — Music's inside track Booze News — San Diego spirits Classical Music — Immortal beauty Classifieds — Free and easy Cover Stories — Front-page features Drinks All Around — Bartenders' drink recipes Excerpts — Literary and spiritual excerpts Feast! — Food & drink reviews Feature Stories — Local news & stories Fishing Report — What’s getting hooked from ship and shore From the Archives — Spotlight on the past Golden Dreams — Talk of the town The Gonzo Report — Making the musical scene, or at least reporting from it Letters — Our inbox Movies@Home — Local movie buffs share favorites Movie Reviews — Our critics' picks and pans Musician Interviews — Up close with local artists Neighborhood News from Stringers — Hyperlocal news News Ticker — News & politics Obermeyer — San Diego politics illustrated Outdoors — Weekly changes in flora and fauna Overheard in San Diego — Eavesdropping illustrated Poetry — The old and the new Reader Travel — Travel section built by travelers Reading — The hunt for intellectuals Roam-O-Rama — SoCal's best hiking/biking trails San Diego Beer — Inside San Diego suds SD on the QT — Almost factual news Sheep and Goats — Places of worship Special Issues — The best of Street Style — San Diego streets have style Surf Diego — Real stories from those braving the waves Theater — On stage in San Diego this week Tin Fork — Silver spoon alternative Under the Radar — Matt Potter's undercover work Unforgettable — Long-ago San Diego Unreal Estate — San Diego's priciest pads Your Week — Daily event picks
4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs
Close

Anchor ads are not supported on this page.

This Week’s Reader This Week’s Reader