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Workers Planning to Retire Later

A survey by AARP shows that 7 in 10 Americans plan to work past the once-typical retirement age of 65.

September 23, 2003|From Reuters

WASHINGTON — The image of American retirees lounging by the pool or playing golf may disappear as nearly three-quarters of older workers say they plan to work past the normal retirement age, according to a study to be released today.

A survey by AARP, formerly known as the American Assn. of Retired Persons, shows that 7 in 10 Americans plan to work past the once-typical retirement age of 65 and nearly half expect to work well into their 70s and even 80s.

The decision to postpone retirement is no longer unusual, but AARP researchers said the intention to work an additional decade or more was a new phenomenon.

"What did surprise us is that people intend to work way past the traditional retirement age," said Jeff Love, research director at AARP, which has been tracking people's retirement intentions in surveys since 1997.

Interviews this year with 2,001 people 50 to 70 years old showed that the main reason for working past retirement had more to do with financial need than fulfillment of professional goals, enjoyment or a desire to stay active.

When forced to choose one main reason for staying employed, the majority -- 22% of those near retirement and 35% of retirees -- said it was to make money.

Higher health-care costs, insufficient retirement funds and recent investment losses feed the need to keep earning, AARP said.

"I suspect it's because people have really taken a[n economic] hit in the past two years," Love said.

Traditional company pension plans that promise a set payout based on years of employment are increasingly being replaced by plans dependent on individual contributions and investment choices.

Newer retirement plans place the risk burden on the shoulders of employees, said Gary Burtless, who specializes in retirement policy at the Brookings Institution.

Furthermore, he said, fewer companies are offering desirable health insurance for retirees, if at all.

AARP also reported that 61% of the respondents who planned to work past retirement age would continue their present job or work in a similar one.

By 2006, nearly 46% of the U.S. population will be older than 44, said Jon Dauphine, director of the economic security and work program at AARP.

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