Working only solution for auto workers, Transamerica Center for Retirement Studies implies
With the drive to cut the national deficit in America, it is understandable that everything is supposedly on the table, including social security and the retirement age.
According to the annual survey from the Transamerica Center for Retirement Studies® (“The Center”), a nonprofit private foundation, almost 4 in 10 workers said they’ll work long past the normal retirement age or simply never retire. Questions are, where and doing what?
The new research, however, underscores how American workers are largely unprepared for retirement; and further, how relatively few have a backup plan in the event they are forced into retirement earlier than planned.
The results of the 12th Annual Transamerica Retirement Survey—conducted among 4,080 American workers—found that for many Americans, the foundation of their retirement strategy is simply to not retire or to work considerably longer than the traditional retirement age of 65.
That may be easy for design engineers, financial planners and office workers to assume, but not line workers and machine tool builders. Continuing to work may simply mean not at an auto plant, and preferably at some other job or a new career or a home business.
Then again, other industries like construction have never enabled their employees to work much beyond early 60s, let alone 65, the present full-retirement age. There is simply too much wear and tear on the human body.
Fact is, there’s a problem for those who plan to work well into their 70s, especially in the auto industry: For one, that strategy assumes workers will keep their jobs. Second, the strategy assumes workers will stay healthy; and, if sick, will have health care that is affordable. In this respect, auto workers are not alone, whether union represented or not.
For certain, the salaried jobs everywhere are not exactly being protected either for this rise in retirement age. This reporter had planned on age 62 for retirement, but didn't make it due to conditions beyond my control, like a GM bankruptcy. That's why I write and trade the markets.
Another question is, will lawmakers in Washington consider these factors when they choose the new retirement bogie? Hard to tell, but understanding their constituants beyond political gain has not exactly been their forte.
Meanwhile, MarketWatch Andrea Coombes, personal finance editor based in San Francisco, quoted a survey of 4,080 U.S. workers conducted by Harris Interactive in February and March. 40% of workers said the recession will force them to work longer than planned. This is up from 28% who said that a year ago.
Now here’s the rub again: 54% said that even after they retire, they’ll continue to work. Question is still, where? And will they be physically able to work?
Time and chance happens to all. While many workers may plan to work past the traditional retirement age or never retire, unforeseen circumstances could force them to stop working before they planned. The Transamerica survey found the majority of workers are unprepared for this scenario—70 percent agree they could work until age 65 and still not have enough money saved to meet their retirement needs.
This sentiment spans across age and income: 69 percent of those in their twenties and 72 percent of those in their thirties agree they could work until age 65 and still not have enough money saved, 80 percent of those with a household income (HHI) of less than $50,000 agree, 74 percent of those with an HHI $50-$100,000 agree, And, 59 percent of those with an HHI over $100,000 agree.
Point is, living longer does not automatically imply living well, abundantly or living vibrantly. So, raising the retirement age is no panacea for fixing the national deficit until the government can provide free-market economic policies that will induce job growth. Then and only then will workers be safe enough to live under the new retirement age rules.
More About the Reporter: After 39 years in the auto industry as a design engineer, Frank Sherosky now trades stocks, futures, and writes articles, books and ebooks via authorfrank.com. He may be contacted here by email: [email protected]
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