The economic downturn has changed the retirement plans of 52% of OSCPA members age 60 and older who responded to a statewide survey in May. More than half (54%) of the respondents plan to delay retirement for one to five years. Nearly a third (31%) said they have greater uncertainty and are unable to predict when they would retire. After retiring from their current position, more than a third (36%) plan to work part-time, seasonally or as a consultant.
The delay in retirement among OSCPA members is reflective of employment trends overall. "We have seen a trend of people approaching retirement age that have either made the decision to work longer than they planned to five years ago or are uncertain about when they will be able to retire. In either case, they are remaining in permanent positions when they can or pursuing consulting opportunities to generate income," said Eugene Lodato, division director, Robert Half Management Resources, Cleveland.
An overwhelming 81% of survey respondents whose retirement plans have changed cited the decline in their retirement investment portfolio as a reason. "With the value of their assets diminished, many professionals have no choice but to remain in the workforce," Lodato said.
Concern about committing to a fixed income after retirement (37%) and spiraling health care/medical expenses (29%) also ranked high among OSCPA members' top concerns. "It's more difficult than ever to measure future inflation. The very element of surprise in economic activity has made all retirees fearful of committing to something as binding as fixed income," said Janice Worthington, president of Worthington Career Services, OSCPA's career coach of choice. "This downturn came very quickly and created much damage. As we take measures to recover, the lesson learned has been to prepare as much as possible for future unknowns."
The design of employer-sponsored pensions is another major factor in determining a retirement date, according to a Congressional Research Service (CRS) report issued in September 2008. The trend among employers is toward defined contribution plans that typically pay a lump-sum benefit--and away from defined benefit pension plans that offer a monthly annuity for life, CRS reported. In addition, more people may continue to work until they are eligible for Medicare at age 65 due to the declining percentage of employers who offer retiree health insurance, the CSR report...