Running Out of Time

A while ago, I blogged about “Waitin’ fer the Boss to Die,” because older Americans lucky enough to have jobs, whose pension accounts and corporate retirement plans have been decimated by the current economic implosion, are postponing their retirement by an average of 8 years; according to a December poll sponsored by CareerBuilder, 60% of American workers over 60 expect to delay retirement. Some have noted that retirement is not an option at all.

Those earlier blogs provided that all those older corporate workers would create a bottleneck at the top, and as far as traditional big company opportunities go, this would create a slowing down of fresh blood into vacancies as the old guys retired. Further, collective bargaining agreements tend to protect those who have seniority, so when layoffs are necessary, younger union workers tend to be the most vulnerable.

There are a few obvious benefits to society of older workers remaining in the job force: forcing younger people to strike out on their own, creating new companies and thus new jobs along the way, and older people having more money to spend for a longer period of time in their lives – good for the economy. With the growing trend of “independent contractors” (without healthcare or company retirement benefits) replacing an employment based workforce, the future of how we earn money and then provide for retirement is most certainly changing dramatically.

But there is another harsh reality for those older workers who lost their jobs in this managed depression and have literally run out of options for finding suitable replacement work… even for those who really do not have private pensions or sufficient retirement savings, whose personal savings have been decimated in the market crash. The May 24^th Los Angeles Times: “Once they lose their jobs, older workers have a harder time finding new ones. On average, it takes laid-off workers 55 and older nearly a month longer than their younger counterparts to find new employment, and the gulf has been growing recently, according to the U.S. Bureau of Labor Statistics.” Even when the economy turns around, this segment of the work force is the least likely to resume their past earning power or even get a job at all.

So what do these older workers who have lost their jobs doing? They are opting to trigger Social Security retirement benefits in record numbers, even at age 62, where the benefits as much as a quarter less than waiting until age 66 to request such payments. Survivors’ benefits, such as the widows/widowers of Social Security recipients, can get as much as a 30% reduction in benefits with the primary beneficiary dies.

The LA Times: “Since the current federal fiscal year began Oct. 1, claims have been running 25% ahead of last year, compared with the 15% increase that had been projected as the post-World War II generation reaches eligibility for early retirement, according to Stephen C. Goss, chief actuary for the Social Security Administration.” With threats that both Medicare and Social Security are seriously underfunded (described in detail in earlier blogs), and with so many Baby Boomers over 60 now, the strains on the system are beginning to show some major cracks. Tom Raum, writing for the Associated Press on May 24^th: “Federal overseers said this month that the Medicare fund will be depleted in 2017, just eight years from now and two years earlier than estimated just a year ago. The Social Security trust fund will be exhausted in 2037, four years earlier than predicted a year ago.’”

The vaporization of residential real estate values (once known as America’s savings account), combined with stunning job loss, collapsed retirement savings and an eroding tax base, may result in a change from what was once thought to be the “golden years” into a painful struggle for millions of people who never expected this minimalist existence to be the way they would spend the last years of their lives. As life expectancies rise, many elderly will easily outlive what they and the world have set aside to provide for their retirement.

One way or another, whether through a larger contribution from families to support the parents or grandparents or by means of government action, this is one problem that will only get worse. Or we could simply let them die, as so many biographies say, “penniless” in some non-descript flophouse or back alley.

I’m Peter Dekom, and I’m not retiring anytime soon… if ever.