(Dow Jones) Linda Conti isn't ready to hang up her business attire just yet at age 64. But the unemployed trade association executive isn't sure she has much choice in the matter.
"I feel like I've been forced into retirement," says the former director of membership for a construction industry group in Southern California. "And I'm not ready to retire."
Ms. Conti is among a growing legion of unemployed older workers who say the recession is leading them on a path toward early retirement -- whether they like it or not. Many are relying on financial resources, like Social Security payments, previously reserved for later in life, putting their future well-being into question.
Even though the U.S. labor market is showing signs of improvement, with a slowing number of job losses and a drop in the unemployment rate to 10% in November, conditions for older workers continue to deteriorate.
The number of unemployed workers ages 55 to 64 has nearly tripled since the recession began, to about 1.6 million of the nation's 15.4 million unemployed as of November, according to the Labor Department. By comparison, the number of jobless workers of all ages has roughly doubled.
The share of people age 55 to 64 who are employed -- which has been trending down for the past 18 months -- sank to 59.9% in November, an eight-year low for that month and down from 60.3% in October. The rest either want jobs and can't find them or aren't able or interested in working.
The drop in employment for older workers follows a period of nearly three decades in which a greater share of individuals approaching retirement age had jobs. At the peak of the boom, employment among those age 55 to 64 topped out at nearly 63%. At the time, workers were seeking to keep up with the rising cost of living, while employers were more willing to hire older workers in a tight labor market.
While it is difficult to quantify just how many Americans are retiring earlier now amid weak job prospects, recent work from two Wellesley College economists, Courtney Coile and Phillip B. Levine, suggests the effect is large. In a new working paper, they estimate 378,000 workers will be pushed into retirement as a result of the weak labor market -- almost 50% more than will end up working longer because of stock-market losses.
Some unemployed workers nearing retirement age are dipping into their savings accounts to make ends meet. But savings for most people have taken a hit in the economic downturn. Others are taking advantage of Social Security, the government-sponsored pension program people can tap as early as age 62. But for most people to get full benefits, they have to be at least 65 years old, depending on their date of birth. By law, that age will rise to 67 by 2022. And drawing on Social Security is equally fraught, since the earlier retired workers begin to withdraw their benefits, the lower their monthly payments will be -- for life.
The policy is meant to encourage people to keep working and fund the Social Security system. Already, higher penalties are being imposed on those who start withdrawing their benefits early.