Workers Retiring Sooner Due to Recession and Job Scarcity
While retirement is often seen as the inevitable and much deserved time for rest and relaxation after years spent in the workforce, many baby boomers are now becoming more reluctant about hanging up their hats early. As 50 and 60-somethings continue to struggle with lay-offs and unemployment, these individuals are experiencing troubles when attempting to launch back into new jobs. Since baby boomers are far less likely than younger workers to change their paths or delve into a new career to accommodate for the struggling job market, long-term unemployed boomers find themselves forced into early retirement simply because they have given up on finding new jobs. For those that take early retirement and also accept early Social Security benefits, their monthly payments are reduced, which ultimately affects them their whole lives.
Pre-recession, the workforce saw the opposite of this trend with workers generally retiring much later in life. With the switch to 401(k) retirement accounts as opposed to fixed pension benefits, many workers at the time tended to hold onto their jobs longer in order to put more money into their nest eggs. The rising age requirement for Social Security benefits also encouraged workers to stay in the workforce longer.
These days, we do still see workers staying at their jobs and building up their retirement funds. These older workers who are lucky enough to still have good jobs are hanging onto them as long as they can in order to rebuild lost investments and account for a slow economy. On the other hand, an emerging trend shows that many unemployed workers who are not as fortunate are doing the opposite and tapping into retirement funds early. What is interesting to note is that these two trends have visible income-related factors. As low-income jobs tend to be less secure and more physically demanding for workers, individuals eventually become too old to be able to do them and search for bridge jobs in order to help them taper off into retirement. However, the economic recession has made the competition for even small-bridge jobs extremely high. In contrast, high-income jobs are generally more secure and less physically demanding, which allows older workers to stay at their jobs longer.
Regardless of these factors, baby boomers of all income brackets can end up facing lay-offs and unemployment. As many unemployed baby boomers search for bridge jobs to help ease them into retirement, competition skyrockets for entry-level and less-skilled positions. Now in the pool against 20 and 30-somethings as well as other fellow boomers, it looks like early retirement will be something more and more baby boomers will have to consider.
For the full Palm Beach Post article: http://www.palmbeachpost.com/news/business/employment/tough-job-market-sending-many-baby-boomers-into-ea/nP2tj/