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Delay Retirement as Housing, Stock Swoon - Essay Example

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The research paper “Delay Retirement as Housing, Stock Swoon” discusses how people work hard throughout their lifetime to retire comfortably. People that want to retire are finding harder every day to commit to their retirement plan…
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Delay Retirement as Housing, Stock Swoon
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 Delay Retirement as Housing, Stock Swoon
Americans work hard throughout their lifetime in order to enjoy their golden years and retire comfortably. Due to market changes and the depleting stock market and housing market many senior citizens are finding it harder to retire early. The article Americans Delay Retirement as Housing, Stock Swoon discusses this topic (Levitz, 2008). People that want to retire are finding harder every day to commit to their retirement plan due to the fact that the assets they put away for a rainy day are losing value at alarming rates. The most valuable investment most American families own is their home. The housing bubble of 2008 caused many Americans to lose thousands of dollars in equity value. The housing market used to be so good that many Americans bought a second property for investment purposes. Those people that choose the route of investing in the house market for profits have taken a huge hit since the majority of properties in the United States have lost a lot of value. According to the article the housing market in the U.S lost over 10% in value in 2008.
Along with a depleting housing market retirees have also seen their other investment instruments go down in value in a significant manner. One of the financial retirement instruments that people invest on the most is 401k plans. These plans often invest a lot of money in the stock market. The value of stocks or equity went down approximately 15.5% in 2008. The loss of value hurt the potential retirees the most because older people do not have the leisure of time like young people do. A young person can wait until the market picks up once again. Retirees depend on that equity money to help pay for their living expenses. The combined effect of the devaluation in the stock market and the depreciation of homes has force many senior citizens to continue working instead of retiring early. As of 2008 approximately 78 million baby boomers reached the age of 60. Many of these individual planned on retiring early, but a lot of them have found it extremely hard to make a commitment to retirement due to the fact that the value of their retirement savings has gone down.
The senior citizens that are supposed to retire are holding on to jobs that younger people need. This has created market inefficiency in the labor markets. There are so many jobs to go around in the United States. The current situation is unfair to both young people and older people. The older people want to enjoy their golden years. Many of these hard working Americans have been working for 30 to 40 years. “A recent Schwab survey of 1,006 financial advisers indicated that nearly a quarter of their clients are considering working longer specifically because of the economic fallout of the past 12 months” (Levitz, 2008). Jobs that do not require special skills are going to be affected the most by the continued presence of senior citizens in the job market. On the other hand many careers that required advance knowledge and experience will benefit from the longer stay of senior citizens in the job market. Another one of the benefits of having senior citizens delay their retirement is that it alleviates the burden on the social security office. Corporate America is not helping senior citizens as they used too. The value of corporate pensions has gone down and extended health benefits for retirees is a practice that is no longer fostered by corporate America. Due to these changes it has become much harder to make a decision to retire early since retirees do not enjoy the financial benefits they use to have in the past. In most societies senior citizens are respected and looked upon for wisdom. It seems as if America has forgotten about the contributions that our elders have provided to our society.
References
Levitz, J. (2008). Americans Delay Retirement as Housing, Stocks Swoon. Read More
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