The older an unemployed worker gets, the harder it is to return to work and save for their retirement, according to a research report by the Urban Institute.
According to the report’s authors, more than one-half of older workers aged 51-54 have separated from a full-time job with a long-term employer as a result of poor health, family caregiving responsibilities, or other personal reasons. After separation, the older workers either earned half their former salary for two or more years or experienced long-term unemployment.
The report, released in December, found that many older workers who involuntarily separated from their former employer went through more than one such job separation after age 50. Only one in 10 involuntarily separated workers reportedly found new employment at the same earnings as before.
While older workers separated from their jobs could replace their former earnings with other income, such as unemployment benefits or a spouse’s income, their median household income fell 42 percent.
For workers aged 65 involuntarily separated from their job, median income was 14 percent lower than for those that had never separated.
The report’s authors said that their findings were consistent with other research suggesting that employers were reluctant to hire or retain older workers. Those reports’ findings were based on the long-term unemployment periods experienced by displaced older workers, as well as limited interest received from prospective employers.
As a result, many older workers seeking to continue working and earning a stable income until they choose to retire cannot do so. More importantly, those workers in their 50s and 60s that count on steady earnings to build their retirement savings and ensure financial security later in life instead face economic hardship.
The authors argue that the problem will likely intensify in coming years as a greater number of older people find that they must work longer to maintain their standard of living through their retirement.
For the past two decades, an increasing number of older workers have instead been forced to retire, and among those workers a growing number have expressed some dissatisfaction with their forced retirement.
The report concludes that more research is needed to understand why so many employers appear to be reluctant to hire older workers, as well as how to devise ways to help older workers overcome these barriers.