I thought this headline, from an article published by Wharton, was eye-catching and unfortunately true. If it wasn't for the ignorance of most of the electorate to the workings of the pension system this idiocy of paying ridiculously high pension to public sector workers would not have continued.
However, this isn't point of the blog posting, although it is connected.
The Insured Retirement Institute's research (Current Workers Expectations vs Retirees Real Experience) shows the fundamental danger at the heart of the pension's system.
IRI research found about one-third of Baby Boomers (34.9%) and one-quarter of Generation Xers (25.1%) reported they are planning to retire at age 66 or older. Yet a significant percentage of individuals in both generations (30.8% for Baby Boomers and 26.7% for Generation Xers) state they did not know at what age they would retire.
Unfortunately, in 2012, 50% of surveyed retirees report they retired earlier than planned. The most cited reasons are, 51% due to health issue or disability, 21% due to changes at their employer or downsizing, and 19% due to family care giving responsibilities.
We know that working a few extra years beyond full retirement age has significant positive effects on the financial quality of health. If those individuals waited until age 70 to retire, their retirement readiness increases by 80%+.
The bottom line to these assorted facts is that most people haven't a clue about how the pensions system work and are hopelessly optimistic about their ability to continue working post-50. This is especially the case during these troubled economic times. The outcome is a lot, the majority, of older people who will see a significant fall in their quality of living.
Message to marketers. Make sure you are targeting the group of older people who will thrive in retirement because most of them will not and a lot of them will be public sector workers. Dick Stroud
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