Older Americans Hit Hard: Redefining Retirement

By Alanna McCargo

Getting older and closer to retirement should bring joyful thoughts to mind of peaceful walks, a slower paced life, enjoying hobbies, volunteering, spending time with family, traveling and watching your grandchildren grow up. If you are able to see this type of retirement now or in your future, congratulations! The reality is, retirement is unfolding much differently than planned for many Americans. Retirement as we know it is being redefined.

oldercouplebikesOver the last several years, many Americans have been impacted by the recession, unemployment, market turmoil and the housing crisis. The population of people that were particularly hard hit by this recent downturn are older Americans, those of retirement age or close to it.

So why aren’t more older Americans getting the chance to enjoy their retirement years with stable foundation underneath them? A few key things are happening that are having an impact:

  • Adult children have become more dependent on their elderly parents for housing and financial support. Many older Americans now find their adult children and grandchildren living in their homes, or they are supporting them as they struggle through employment issues. This causes complete and utter disruption to financial planning that many people put in place, as the costs to support their families during this period wasn’t contemplated in their savings plan. Retirement homes, accounts, and plans are being deferred to continue to provide for the family.
  • Older Americans are deferring retirement and working longer. According to the Department of  Health and Human Services Administration on Aging, by 2014 it is expected that 41% of adults age 55 or older will still be in the workplace.
  • Retirement accounts and pensions may have disappeared or been severely hit when markets tanked in 2008/2009. This has made the ability to retire harder for many older Americans who had planned to leave the workforce, but now cannot afford to given the declines in their retirement savings.
  • Older Americans are finding themselves with mortgage balances and less equity than expected. Many people plan for and expect to have their mortgage paid off by the time they are ready to retire, and to be sitting on equity that could be used for retirement. The housing crisis has really wrecked that dream, with home price declines that took place in many parts of the country.
  • Unemployment and underemployment plagues older Americans. Finding employment, and keeping up with increasing skill requirements is harder for this part of the population. As noted above, some Americans may be trying to get back into the workforce after retirement to increase their earnings and sustain their lifestyle. Getting into the workforce after retirement can be a challenge.

All of the above are life-changing events that even the best of retirement planners might get side-tracked by. The best advice is to revise your plans and start thinking about new ways to save money and balance responsibilities you may have taken on that were completely unexpected. The fact is, you may have to work way beyond the age of 65. This is not the end of the world. In fact, continuing to work into your sixties and seventies might even prove to be better for your mental and physical health in the long run. The concept of retirement is being re-defined for the next generations, and the age at which older Americans can truly call it quits and hit the beach is probably farther for the majority of Americans. Our thinking in our culture has to change, as do attitudes in the workplace and the skills of older Americans who are continuing to stay at work. Older Americans have experience, know-how, wit and wisdom that many organization’s truly value. You have to stay current with the technology trends, keep yourself relevant and continue to stay actively engaged so you can put all of that great experience to work. Most importantly, as retirement is redefined, you need to redefine yourself and your long term financial plan so that you can live comfortably in your older years.pledgeOAM

The month of May is Older Americans month, sponsored by the Administration on Aging (http://aoa.gov/). The theme this year is ‘Unleash the Power of Age“. This is a great and positive way to think about aging America and to promote the issues aging Americans are facing, ensuring they are not forgotten. We need to work together to keep older Americans voices and issues heard. Ensure policies and progress we make for the next generations don’t harm the older generations.

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