We will be working through retirement
The recession is changing the way people think about their retirement. Economics correspondent Chris Farrell tells Scott Jagow why working in your golden years will be the norm -- and why that's not a bad thing.
Senior couple sitting at a laptop (iStockPhoto.com)
More on Retirement - Saving
TEXT OF STORY
Scott Jagow: Here's an unsettling question that many people are asking: Does this recession mean there's no more retirement? Will people have to keep working into their 70's and 80's because they can't save enough money? Our economics correspondent Chris Farrell believes the answer is yes. Chris, how do you see this coming about?
Chris Farrell: Oh I think this is going to be a big change, a change that will take time to unfold and actually become part of our everyday toolkit and expectations. But think about it this way, Scott: Whenever we talk about retirement planning, we talk about well, you know, how much are you going to have in stocks, and how much are you going to have in bonds, and what's your asset allocation, and how much of your salary are you saving every year? Well, you know what? Those things matter, but what we're really going to be talking about is, what skills do you have? Where's the job growth in the future? But what I think the recession has done, it's brought the discussion to an end. Cause there's no way you're going to be able to save enough to maintain your standard of living and not work in your golden years.
Jagow: Chris, you're destroying my motor home fantasy.
Farrell: Hahaha! I can just see you -- cap on top, on your head, you know, driving down the road, yeah! OK, now, I don't want to completely destroy your dream, Scott. I really don't. Now, what you might be doing is only working part-time. You might be only working part of the year. You're going to be working part-time, you're going to be working flex time, you might be working from home. You might work a couple of months of the year. But work is going to be part of your retirement savings plan. You can still have your motor home, Scott, you really can still have your motor home -- but as part of your savings. Rather than this being a message of despair, by the way, this is a message of you're going to continue to earn an income. You're going to make some money. And so you're going to be able to afford to gas up that motor home of your's. And cause otherwise, I don't know Scott, I'm not so sure you're going to be able to.
Jagow: Well Chris, I can buy this whole scenario of working longer, and maybe part-time and flex and all that. But what about health insurance, which is so critical at that time in people's lives?
Farrell: It's very critical. And right now, that's the big barrier to what I'm discussing. And that's where health care reform becomes absolutely critical. I think the pressure for health care reform will grow. And this is just one more factor that is putting pressure on government to say the status quo when it comes to health insurance is no longer acceptable.
Jagow: All right. Our economics correspondent, Chris Farrell. Thank you.
Farrell: Thank you.
Comments
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From Minneapolis, MN, 01/11/2009
The elephant in the room here is the impact of age discrimination on the ability of "older" people to get and/or keep work that pays well enough for them to support their basic needs. I am a recruiter and know for a fact that companies and hiring managers RARELY consider outside candidates over 50 for positions--even if pay is not an issue. They ignore resumes and applications from individuals who obviously are older saying they are over-qualified (my eye!). These candidates are essentially invisible--and never get interviewed. Given the current economic situation I believe that many talented, educated, experienced people will not only be unable to retire--they won't be able to get work AND will have to resort to some sort of Gov't assistance unless this issue is addressed openly and SOON.
From Shadyside, MD, 01/08/2009
I have to agree that "retirement" as we have know it since WW2 is not in the cards for me.Sure there MAY be social security, but that has never supported more than basic survival. I'm 62 now and working hard to pay off my second home, with the plan that we will eventually move there full time and sell our valuable city home. My wife plans to grow high value marketable flowers, while I will sell my blood or break rocks, or look on Craigs list for a real J O B. I won't be crying though, I know how lucky I am to live in the US and have always believed in taking care of myself, the world owes me nothing, it has given me a chance to make all the lemonade I can drink and my children who stand strong on their own feet.
From La Canada, CA, 01/08/2009
I am most disturbed by the phrase "health care reform". Everyone then gets to interpret the phrase as they like. Changing the form of of health care may or may not achieve the goal of providing health care to those who will need it. For example, the managed care system exists only DENY care, not to provide it. Savings come from NOT doing anything to help people and the most economically successful of the entities involved in this system (medical groups, insurance companies) are those who provide the LEAST medical care. We have gone from a system which rewards excess (indemnity insurance) to a system that functions best when no care is delivered at all. Please stop using the phrase "reform" and start talking about what the goals are. If your goal is to save money, why not just provide no health care at all? If your goal is to provide health care, do not provide incentives to eliminate it.
From Washington, DC, 01/08/2009
I sympathize with the older commentors above who are having a tough time in this crumbling economy, we are all suffering, however, I'd like to remind them of a few things:
1- They are the oldest of the babyboomers who grew up, demographically speaking, in unsurpassed prosperity brought on by new deal good government and post-war prosperity. You may need to adjust your expectations that encompass the reality of the situation that the rest of us live in. (also, historically speaking most societies don't actually have such a thing as retirement)
2- Many of these boomers politically supported and profited by the conservative revolutions of Regan, Bush, Clinton-Gingrich, and Bush II that emphasized anti-government policies and the 'Pull yourself up by your bootstraps' philosophy.
3-For most of us in the US, things are not really that bad right now, most people can heat their homes, put dinner on the table, and exist without fear of violence or sickness. And by most accounts the economy and the state of country is going to get much worse, so prepare accordingly, and think about how you can survive and help others.
I, for one, expect the Marketplace journalists to keep reporting the truth, as they do everyday but Sunday, but the truth doesn't have to doom and gloom, so I respect Mr. Farrell's take on how things won't be so bad, if you make plans now and maybe you can still have motor home dreams.
Thanks again for Marketplace!
JP
From Albion, MI, 01/08/2009
I can see one of the side effects of needing to earn living as we age will be that we might connect more with other people, end up being happier, and live longer. I suspect there will be more entrepreneurs who decide if they have to work they might as well do what they love to do. Of course I am an entrepreneur myself so I am biased.
01/08/2009
Just when we all think that Americans can not take any more bad economic news, along comes Mr. Farrell with more doom and gloom. I am a frequent listner of Market Place, and I have to say I am very disappointed that this program would cover a story so discouraging and despressing as this. Please, "give our future Amrican retirees a break!"
M Bizette
Miami, FL
From Raymond, WI, 01/08/2009
Ann Keitz pretty much said what I wanted to but with one exception: just what jobs will those of us over 55 be able to get and how in hell do you think we'll be able to do them when we're 70 or 80? As for putting health care reform on the fast track, we've heard it all before. As for getting this economy back on track, Pelosi and many other Congresspersons heard from me yesterday after I heard that Pelosi hoped to have a bill ready by mid-February. We don't have the luxury of a slow-paced-as-usual Congress at this point. Niceties and politeness be damned. Republicans and Democrats better work together รข?? people do have memories. Livelihoods are on the line including those of Congress at this point. They had better have a bill ready for Obama to sign by Jan 21 or the guillotine may come back into fashion. And Congress at this point had better take a pay CUT to $100,000 with no additional monetary compensation. If that makes it too expensive to live in Washington, they can learn to commute as do so many of us.
From Bethany, CT, 01/08/2009
I'm 61. Had planned on retiring at 66. Now, I have no idea when it will be possible. Aside from the personal loss of dreams deferred, there is a major social and economic loss this story completely misses. If I continue to work at my current job --and I am lucky that I probably will be able to-- I will not be vacating my position for a younger worker to move up the career ladder. Postponing retirement will have a negative ripple effect in our lives and our economy.
From Annandale, VA, 01/08/2009
Let me add myself to the chorus of horrified listeners to this story on working during retirement. How dare you sugarcoat what is a calamitous turn of events for the average American. I have news for you Mr. Farrell -- age discrimination is rampant -- there are few appropriate jobs for the "lucky duckies" who will need to work until they die. Moreover what with the declining access to healthcare, it's a sure bet that fewer and fewer older Americans will be healthy enough to work into their late 60s and 70s.
Please don't just brush off the lack of retirement. You take enough away from average Americans and they will begin to push back. And if you ignore the push back, they will start doing crazy things like storming the Bastille. FDR realized this in 1932. Why can't Mr. Farrell?
Ann Keitz (pronounced like Keats)
Annandale, VA
From Reston, VA, 01/08/2009
Dear Mr.Jagow, I think this show was presented in very poor taste. As a United Airlines employee who had my pension stolen, with the backing of Congress and the bush administration, I've had to face a reality of probably working till I die, for a few years now. I have known for sometime that my parents are probably the last generation to have a defined pension. But you and Mr. Farrell presented the whole "feel good story" as something not so bad, something to think positive about and be happy happy happy! We are going to work till we drop and we are gonna love it! Especially when Mr.Farrell said, "Rather than this being a message of despair, by the way, this is a message of you're going to continue to earn an income. You're going to make some money. And so you're going to be able to afford to gas up that motor home of your's." I was thinking, what a propaganda machine the media is, it's like I'm living out Orsen Well's 1984! p.s. I especially love the picture at the top of this webpage of the older couple smiling looking at their computer! Gross!
From West Lafayette, IN, 01/08/2009
I was horrified listening to the interview on radio, not at just the message but more at the cavalier joking attitude of the two participants. We're mad as hell and you seem to think it's fodder for comedy. What's wrong with you?
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