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Retirement Crisis: Older Americans Struggle to Afford Life After Work
May 24

Brian J. O'Connor

Rethink that retirement party. More and more, seasoned workers are defying expectations and staying put in the workforce for a compelling reason-they simply can't afford to retire.

That's the finding from a new study by Korn Ferry that found that the number of clients with investment powerhouse Fidelity who can afford to cover all their expenses in retirement dropped from 83% last year to 78% this year.

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The Big Problem
The Korn Ferry study isn't the only data showing a problem. Payroll services
company Paychex found that about one out of every six current retirees (about
17%) were considering going back to work, with more than half of them reporting
that they needed more money.

The increase in older workers staying on the job is causing concerns in the executive suite because corporate planners have been expecting their expensive older workers to retire which would open senior-level jobs for younger workers looking to advance their careers.

''You're in a little bit of a box if the performance of the older workers is good, '' says Ron Porter, leader in Korn Ferry's global human resources center of expertise.

That's a big switch from 2020 when corporate types were desperate to keep older workers on the job in the early phases of the COVID-19 epidemic. The resulting labor shortages that continued prompted many large companies to launch '' returnship '' programs aimed at recruiting and training people who'd been out of the workforce for any length of time, including parents and retirees. In 2023, however, many firms are looking to cut costs or restructure, and executives want to see higher-paid 50- and 60-somethings move into retirement.

Impact on Younger Workers
In fact, many corporations have been expecting the older members of their
workforce to move on as naturally as the aged-in to qualifying for Social
Security and could start making withdrawals from tax-deferred retirement
accounts without penalty.

By The Associated Press, Copyright 2023

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