The recession has put greater pressure on workers to stay on the job. But some groups of people have been significantly more likely to postpone retirement than others. Here is whose retirement plans are the most likely to have changed as a result of the recession.
Those with both asset and job loss. Workers who experienced both investment losses and a pay cut are significantly more likely to plan to delay retirement than those who experienced only one or neither of these adverse events, according to a new report by The Conference Board. Some 68 percent of workers between ages 45 and 64 who endured at least a 20 percent decline in their financial assets or home value and a cutback at work such as job loss or a decrease in pay have decided to postpone retirement since 2008. That’s more than twice as many people who experienced neither of these setbacks who have decided to delay retirement (33 percent). Among older workers who experienced only one of these problems, those who lost their jobs or had their pay cut were more likely to delay retirement (55 percent) than individuals who lost money in the stock market (44 percent).
Homeowners where values declined. States where housing prices decreased the most tend to have a higher proportion of workers planning to delay retirement. About half of workers between ages 45 and 64 are planning to delay retirement in states where housing prices declined significantly including California (49 percent), Michigan (53 percent), Florida (48 percent), and Arizona (55 percent). In contrast, only about a third of older workers in more steady housing markets such as Pennsylvania (31 percent), South Carolina (33 percent), and Ohio (34 percent) are planning to postpone retirement.
[See The New Ideal Retirement Age.]
Highly paid workers. Workers in high-paying occupations are much more likely to delay retirement than more moderately paid employees. The proportion of highly paid workers between ages 55 and 64 who retire each year declined from 4 percent between 2004 and 2007 to 2 percent in 2009 and 2010, according to the Conference Board analysis of Bureau of Labor Statistics data. In lower paying occupations the retirement rates declined more moderately from just under 5 percent before the recession to approximately 4 percent after it. “Laid-off workers, who are more likely to be from low paying occupations, would probably find it more difficult to delay retirement because of the difficulty of finding a job in the same depressed sector,” according to the report. “In some occupations, especially ones that involve manual labor, older workers may find it physically difficult to delay retirement.”
Health care workers. The health industry has experienced the largest decline in retirement rates since the recession. Only 1.6 percent of full time workers ages 55 to 64 retired each year in 2009 and 2010, compared to almost 4 percent from 2004 to 2007. “Jobs in this field are also in great demand,” says Gad Levanon, associate director of macroeconomic research at The Conference Board and coauthor of the report.
Construction workers. The construction industry also experienced a large decline in retirement rates from 4.6 percent of workers annually before the recession to 3.2 percent after it. “That is likely a result of the long slump in the industry, which resulted in many laid-off workers trying to stay in the labor force to make up for lost income,” the Conference Board found.
Private sector workers. While many private sector industries have seen retirement rates decline since the recession, there was essentially no change in retirement rates among government workers. “Retirement rates declined significantly during and after the great recession. However, we see that delayed retirement has been more prevalent for some occupations and industries,” says Levanon. “There was almost no retirement delay among government workers, who are more likely to receive defined-benefit pension plans.”