Retirement is changing. As if that weren't obvious enough, a recent survey spells out how an aging population is altering its views about how and when to retire.Here are the basic findings for a poll from the Associated Press-NORC Center for Public Affairs Research:
• 82 percent of workers 50 and older say it is at least somewhat likely they will work for pay in retirement;
• 47 percent of workers 50 and older say they expect to retire later than they previously thought;
• And when considering retirement, workers cite financial needs, health, ability to do their job, and employer benefits such as health care as the primary factors in their decisions.
"The definition of retirement has changed," Brad Glickman, a financial planner in Maryland, told The Associated Press. "Now the question we ask our clients is, 'What's your job after retirement?' "
Much of the reason for that is a longer life expectancy and healthier old age for Americans. In 1963, the life expectancy in the U.S. was 69.92 years; 50 years later, the life expectancy is 78.62 years. More years -- and healthier years — have many continuing to work simply because they enjoy it. Labor force participation for seniors, which steadily fell for more than 50 years after the advent of Social Security, started rising in the late 1990s.
Let's face it, 70 is the new 60.
Amid these lifestyle changes, the Great Recession also has played a role in the alteration of retirement planning. Many people lost jobs or lost savings, forcing them to delay retirement or scale back plans for how to spend that retirement. Financial planners say that a middle-class couple now in their mid-40s will need a nest egg of more than $2 million in order to retire comfortably at age 65.
All of this has led to growing discussion about raising the retirement age in the United States, which traditionally has been 65. Understand, "retirement age" is a bit of a misnomer. There's no retirement fairy that makes people suddenly stop working when they reach 65. But the eligibility age for Medicare is 65, and the eligibility age for full Social Security benefits is gradually being increased from 65 to 67. Social Security benefits can begin at age 62, but monthly payments will be smaller than if a beneficiary waits until the full retirement age.
This, understandably, has led to much discussion. Earlier this year, the Business Roundtable — a group of leading CEOs — came out in support of raising the eligibility age for both Medicare and Social Security to 70. Others have noted that the people who rely most upon Medicare and Social Security — the working poor -— would be hit the hardest by an increase in the retirement age, and that such people on average have shorter life spans.
While valid arguments can be posted on both sides of the debate, the fact is that the debate must be held. There are lingering questions about the long-term solvency of Social Security and Medicare, and the latest projection from the federal government is that Social Security's buffer fund will be exhausted by 2033. In addition, studies show that workers are doing a poor job of saving for retirement, which led to this assessment by Ted Siedle of Forbes.com: "We are on the precipice of the greatest retirement crisis in the history of the world."
That sounds like a bit of hyperbole, but there's little doubt that discussions about our retirement system must be held. Polls in recent years have shown that most Americans expect to be less comfortable in retirement than their parents — a sure sign that some changes are needed.