If you're an American 65 or older, there's a 20% chance that you're working or looking for work (the chance jumps to 53% if you attained an undergrad or more advanced degree): that's double the rate in 1985. The last time it was this high was 57 years ago, in 1962.
Americans are staying in work longer because the market-based 401(k) pensions that replaced defined-benefit pensions, combined with skyrocketing rents and healthcare costs, on top of higher level of debts to support your kids' education, rents, etc, have left older people with insufficient savings to survive their retirement.
To make matters worse, the older Americans who most need additional income beyond retirement age are the least likely to be in work, because they lack the postsecondary degrees that would let them compete with their better-educated peers for jobs.
The retirement math is ugly, even for those who are seemingly well-off. Teresa Ghilarducci, an economics professor at the New School for Social Research, has estimated that Social Security replaces about 40% to 50% of one's pre-retirement income. The general thinking is that people need around 80% of pre-retirement income to get by after they stop working. (Online retirement calculators can give a rough sense for what you need to save, and earn on savings, to get there.)
The typical worker in the bottom 50% of the income distribution, earning less than $40,000 a year, has no retirement savings. Those in the middle 40% of income distribution, earning from $40,000 to $115,000, have a median amount of $60,000 saved, according to Ms. Ghilarducci's research. Workers in the top 10% of income distribution making more than $115,000, meanwhile, have a median amount of $200,000 saved. They, too, are woefully under-saved, although it's worth noting that these calculations don't include real estate and other tangible assets, or the chance of an inheritance.
Older Americans are twice as likely to work now as in 1985
(via Naked Capitalism)
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