Older Americans Go Back to Work—If They Can Find a Job

Lingering market turmoil has wiped out nearly $3 trillion from Americans’ retirement accounts over the last 14 months, causing many older people to remain in the workforce—or return to work after retirement, experts said Monday at the annual Gerontological Society of America meeting near Washington, D.C.

But rising unemployment may limit their prospects.

“Older people are not immune” from the decline in the workforce, said Richard W. Johnson, principal research associate at the Urban Institute, a Washington think tank. “Ageism is an issue and a concern, and during a tight labor market it’ll be that much more difficult for older people to get jobs.”

To illustrate the challenges of older workers, Johnson cited Urban Institute research that tracked people ages 51 to 55 over a 14-year period from 1992 to 2006. Nearly one-quarter, 24 percent, were laid off at some point. Those who were able to get another job took a 26 percent pay cut in their hourly wage.

“In the past, when older people lost their jobs, they just stopped looking,” he says. “Now people are looking because they need the money.”

On the issue of retirement savings, Johnson said Americans took a 34 percent loss on average in their retirement account holdings from September of last year through November 2008. He also pointed out that older Americans were hardest hit because 75 percent of the wealth in the nation’s retirement accounts—IRAs and defined contribution plans—are held by people age 50 and older.

C. Eugene Steuerle, vice president of the Peter G. Peterson Foundation, an organization that aims to bring awareness of financial security issues, said it was important to ask questions raised by the current economic climate.

“Did the bubble market mislead people as to what was affordable?” he asked. “What are the consequences for the nation of saving very little when times were good? Can we set out on a course now to avoid some of these problems in the future?”

Although he didn’t try to answer those questions, Steuerle said he was sure that “we haven’t seen the full effect of this recession yet.”

See Also:
• Why Congress May Be Ready to Reform Health Care
• Fixing Health Care: What Role Will Medicare Play?
• Social Security: A Challenge for Obama
• What Do You Have to Give to Your Country Now?

Carol Fleck is a staff writer for the AARP Bulletin.