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Most US baby boomers are not prepared for their retirement, and neither are the US and world economies. Boomers can help mitigate the consequences by remaining in the workforce beyond the traditional retirement age.

McKinsey Quarterly

In recent years, many retirement experts have been giving the same unwelcome advice: American workers who are not as rich as Warren E. Buffett should retire three or so years later than they had planned — to ensure that they have a large enough nest egg. But now, in these extraordinarily turbulent times, with the stock market declining sharply and millions of 401(k) plans plunging in value, many workers are suddenly facing a starker situation — they worry that they might have to work 5, 7, even10 years later than planned, perhaps well into their 70s.

NYT

The 30 per cent fall in the stock market over the past 12 months is bad news for those coming up to retirement. Since a large chunk of pension fund cash is invested in equities, a fall in share prices translates into a drop in future retirement income.

The pain is most likely to be felt by those in a money-purchase scheme, where the pension is entirely dependent on the size of the pension pot that has been built up. It is estimated there are up to 20 million people with an occupational or personal pension of this kind.

TimesOnline

Whether through desire or necessity, more older workers are staying in their jobs longer or returning after retiring, according to data from the Bureau of Labor Statistics. According to the bureau, the number of employed people who were 65 and older doubled from 1977 to 2007, compared with a 59 percent increase for those 16 and older.This increase is not explained by any skewing effect of the baby-boom population — those born between 1946 and 1964 — because no baby boomers have even turned 65 yet.

In less than a decade, all of the baby boomers will be 51 to 70 years old. This generation’s size and tendency to make new rules have created business opportunities since child boomers bought hula hoops in the 1950s. Now it’s time for businesses to prepare for the changing needs of the older boomers, who are about to become the largest and wealthiest over-50 consumer group in US history. Boomers will account for roughly 40 percent of US spending by 2015 and for a disproportionate share of the growth and consumption in industries ranging from consumer electronics and clothing to home furnishings, restaurants, and, of course, health care.

Despite the economic power of boomers, many aging ones face the prospect of shattered expectations. A generation that lived through unprecedented prosperity and has correspondingly high hopes for its golden years must cope with significant financial, physical, and social challenges. New McKinsey research reveals that 60 percent of boomers won’t be able to maintain a lifestyle close to their current one without continuing to work, that 60 percent of older boomers already suffer from chronic health problems, and that by 2015 there will be 21 million single 51- to 70-year-old boomers—more than twice as many single households as the previous generation had at the same age. Not surprising, 46 percent of boomers fear ending up alone, and 43 percent already are frustrated that they aren’t leading the lives they expected to.

McKinsey

Social Security is known as the “third rail” of American politics, and fiddling with retirement benefits can prove politically fatal in Europe too. Yet, in recent months and years some Europeans have tried to defuse the time bomb posed by millions of retirees receiving government benefits. The fears of European workers are not unwarranted. Forty percent of Belgians over 75, for instance, will live in poverty by 2016, according to the National Pensions Office in Brussels, in part because of lower pensions.

State pension costs as a percentage of gross domestic product are edging steadily upward. In France, for example, they will reach 14.8 percent in 2050, from 13.3 percent today, according to the European Commission. That would put French pension costs on the high end of the European average. It would also be more than three times the portion of the United States economy devoted to federal retirement programs.

Artikel New York Times