Disappearing pensions, the stock market crash, inadequate savings, and uncertainty over the future of Social Security mean that many people will have to put off retirement or work after they have signed off from their traditional, full-time jobs. According to USA Today, citing a study by employee benefits consultant Nyhart, these conditions will force many workers to put off retirement an additional two years until an average age of 73.
In addition to the stock market crash that depleted many hopeful retirees’ savings, many workers also had to withdraw money from their retirement savings or reduce the amount they were contributing to retirement plans in order to make ends meet during the recession.
The study, in which 10,000 workers’ investment accounts were reviewed, showed that four-fifths of those workers could not afford to retire by 65. The study projected a retirement age of 69.9 for workers who contribute to a 401k and make between $60,000 and $70,000 per year. Those who earn less than $25,000 wouldn’t be able to retire until they are almost 78 years old!
Another recent report by Workforce Management states that working in retirement will become the “new normal” due to retirement funds that are “woefully underfunded.” In fact, a study by Wells Fargo & Co. quoted in the article states that those surveyed in their 50′s had a median retirement savings of less than $30,000. For the typical 20-year retirement, that would only provide $190 of income per month!
These reports underscore what we have been reporting on this blog for months: whether by choice or by circumstances, older workers are staying in the workforce longer. But that doesn’t mean they want to continue the same 9-to-5, full-time grind. That’s why retirees make ideal contract candidates. Contracting provides the income and flexibility these workers desire. If your pipeline of contract candidates doesn’t already include these experienced workers, now may be the time to seek them out!
