Americans Consider Working Longer Before Retiring.
Sixty may not quite be the new forty. But people are living longer and living healthier into what we call their retirement years. So why do most people still stop working at age 65... or even earlier?
Tom Fudge: A study by Ernst & Young has found that three out of five middle class retirees will probably run out of money if they maintain their pre-retirement lifestyles. The study, which made the front page of yesterday's Union-Tribune, is just one of many red flags that have been raised about American trends in savings and retirement. The short story is: People aren't saving enough money and they're not working long enough.
The average retirement age in the U.S. is not 65. It's 63. Meanwhile the old defined benefit pension plan, which guaranteed a retirement income, is going the way of the Dodo Bird. And our country is about to be flooded with tens of millions of new retirees, as the baby boom generation gets ready to leave the workforce.
One of the solutions to this problem is for people to work longer. Average life span has increased so much that you'd think the retirement age of 65 would be increasing with it. But most people don't seem to want to work longer. Employers don't seem eager to increase the age of their workforces. But it looks like something's got to give, if people are going to live well into their later years.
Peter Cappelli. Director of the Center for Human Resources at the University of Pennsylvania's Wharton School of Business. He's co-author of an upcoming book called "Managing the Older Worker."
Bill Bengen. President of Bengen Financial Services in El Cajon. He is known nationally for his landmark research on how much money people need to retire. His rule is known as the "four percent solution."