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Responses to pension provision crisis

Wednesday, March 20 08:47:49

The crisis in pension provisions manifests in similar ways between the US and Europe. In the UK and Ireland large numbers of 50 plus unemployed people are going self employed in a desperate effort to get back into the world of work and to restart efforts to make provision for their retirement years. In the US retirement age workers are simply hoping to work longer and thereby put off the inevitable. Nearly half of Americans have little or no confidence they are financially prepared for retirement, a problem many of them intend to solve by working longer, according to a new survey by the Employee Benefit Research Institute (EBRI).

The survey found that 10 percent of workers plan to retire between ages 66 and 69 and a another 26 percent intend to put off retirement at least until age 70, far more than planned to work that long when EBRI conducted its first retirement confidence survey in 1991.

But although many Americans are living longer and fewer are in physically demanding jobs, those plans may be unrealistic. The survey found that 47 percent of workers end up leaving the job unexpectedly, largely because of disabilities or other health issues or problems at work according to a retirement report in the Washington Post.

Currently, the largest group of workers leaves the workforce at age 62. That is when they first qualify for a Social Security retirement benefit, which is reduced those who take it before hitting the full retirement age (now 66 for people born betwen 1943 and 1954). Just 14 percent of the retirees captured in EBRI's latest survey retired after age 65, and only one in four of them work for pay in retirement. The hopes therefore of those approaching retirement often differ substantially from the reality found in their 60's.

The earn more now or work longer solutions are similar reactions to the same problem and in one case the impediment is the level of unemployment and Europe's recession while the other solution relies on good health in addition to a healthy economy.

Report by Cathal O Dubhain