Friday, October 24, 2008

Working Longer As Jobs Contract

NY Times


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, even 10 years later than planned, perhaps well into their 70s.

But that’s not the only problem. Even as workers in their 40s, 50s and 60s accept having to work years longer than anticipated, many companies are laying off employees amid the economic downturn. This often means that older workers are pushed out first, because they are usually the highest-paid employees.

“You have 401(k) plans going into the tank and the cost of health insurance rising, so many people see they need to work longer,” said Karen Ferguson, director of the Pension Rights Center, an advocacy group for retirees in Washington. “At the same time, many employers don’t have money to hire people, and they’re getting rid of their more expensive employees, so it’s kind of a perfect storm.”

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