In the wake of the Great Recession and snail-paced economic recovery, some of the worst-hit have been those close to retirement age.
A study by University of Michigan finds that more Americans are becoming partial retirees, where those close to retirement age are taking up jobs that provide an income less than half the maximum annual earnings they had over their working lifetimes.
High unemployment is a primary factor fueling the trend. According to the study, retirement-age workers are more sensitive to changes in the national unemployment rate, and often retire early if they are laid off or take up lower-paying or part-time jobs if they cannot afford to retire. A 1% rise in unemployment, nationally, leads to a 1% drop in employment of 55 to 75 year olds, and a full 2% drop in employment for those between 63 and 67.
From the study:
“[P]artial retirement has been on the rise across all age and income groups. While partial retirement was virtually non-existent for 60-62 years olds in 1960, over the past 20 years more than 15% of workers in this age group are categorized as partially retired. For 65-67 year olds, the recent partial retirement rate is over 20%, up from 5-10% in 1960.”
And according to a recent survey of 1,200 people conducted by PNC Bank, highlighted in this MarketWatch article, 26% of retirement age people said they retired earlier than they thought they would due to “issues with their employer, including forced early retirements and layoffs.”
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