The recession and the high cost of living have played havoc on baby boomers’ plans to retire. Fallout from our tough economic times, financial hits on retirement savings, foreclosures, high unemployment, falling housing prices and spiraling costs of food, gasoline and health care have forced an alarming number of baby boomers to delay retirement. They are abandoning their dreams of travel, volunteer work and leisure activities because they simply cannot afford to retire.
Health care costs, financial pressures, family issues and a lack of confidence in the economy are forcing baby boomers to delay their retirement plans. A Pew Research Center survey found 60 percent of employed adults aged 50 to 61 may have to delay their retirement because of the recession and 35 percent of those 62+ say they have already pushed back their retirement date. Another 32 percent are not confident they will have sufficient income and assets for retirement.
One of boomers’ primary concerns, according to the Towers Watson retirement poll, is health care. ‘Sixty-eight percent of older workers cite health coverage as a reason to delay retirement.’ Primarily, they are holding onto their jobs for ‘employer-paid health benefits, because private health insurance is so expensive.’ An overwhelming majority say they will keep working until they're eligible for Medicare benefits at age 65.
Another area of concern is finances. Towers reports 63 percent of people in their late 50s and early 60s carry considerable mortgage and home-equity debt. It further discloses that 11 percent of boomers borrowed or withdrew funds from their 401(k) and other retirement savings accounts during the recession. Diminished savings and debt, combined with a dearth of pensions, pose major financial pressures for baby boomers who know relying on Social Security alone to finance their retirement is at best risky.
Family responsibilities and associated costs also play a huge role in a boomer’s reluctance to retire. Many baby boomers are supporting:
- children in college,
- adult children struggling with unemployment or under-employment,
- elderly parents in poor health and
These expenses are a major issue for baby boomers.
Across the country, 76 million baby boomers are now considering their retirement options. Many will delay retirement and continue working full-time, some will seek part-time jobs and others will opt for a leisure retirement. Affordability will be the deciding factor as to when a baby boomer retires.