Vice President Gene Kovacs Discusses the Economics of Traditional Versus Delayed Retirement
May 31, 2013
It is counterproductive to suggest that U.S. workers are coming up short on retirement planning, say Analysis Group Vice President Gene Kovacs and research economist Kevin Cahill in their coauthored blog post "Santa Claus, the Easter Bunny, and Traditional Retirement" (May 29, 2013). "We aren't falling short of anything. We're simply returning to a more realistic world of work later in life," the authors argue. Because of a number of economic and sociological factors -- among them, increasing life spans, impending gaps in Social Security funding, and employers' moves away from defined-benefit pension plans -- the traditional expectations of retirement at age 62 may need to give way to more realistic expectations of delayed retirement, they say in this opinion piece at Boston College's Aging & Work Blog. The article was also syndicated by The Huffington Post. "Delaying retirement for eight years -- from age 62 to 70 -- reduces the amount needed for retirement by 90 percent," they report, because each additional year in which assets accumulate replaces a year in which assets are drawn down, and reduces the number of leisure years to be financed. It has become outdated to believe we can live 20 years of leisure in retirement without reducing our standard of living, Dr. Kovacs and Dr. Cahill say. "Our society … simply can't afford that."
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