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Trend of late retirement might be a good thing

Bob Moon Dec 23, 2010
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Trend of late retirement might be a good thing

Bob Moon Dec 23, 2010
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UPDATE TO THE ORIGINAL STORY

HOST: A happy birthday wish to the baby boomers out there. The first wave of “boomers”, was born in 1946, they’ll turn 65 this coming year. This morning, the AARP released a report showing boomers are retiring later.

Our senior business correspondent Bob Moon has more


Bob Moon: The AARP figures about 7,000 baby boomers will turn 65 each day in the year ahead, and its new survey finds almost one-third expect to retire at age 70 or later. Four in 10 say they plan to work ’til they drop.

AARP executive V.P. Steve Cone says this could end up easing the burden on Uncle Sam.

Steve Cone: The longer baby boomers work, the longer it takes them to tap into Social Security. Probably that’s a good thing for the system.

But where does the trend leave up-and-coming workers? At the University of Pennyslvania’s Wharton School, professor Olivia Mitchell says there’s a widespread but mistaken belief that older people need to make way for younger workers. Actually, she says, employers end up hiring fewer workers if they’re forced to help bear the cost of benefits for people who retire earlier.

Olivia Mitchell: The taxes that have to be raised to support them, number one are very high, and number two, discourage the young folks from working hard, because there’s very little return to their effort.

Besides which, those baby boomers will also create new jobs, because somebody still needs to take care of them all.

I’m Bob Moon for Marketplace.



TEXT OF ORIGINAL STORY

HOST: And a message for the baby boomers out there — Happy Birthday! The first wave of “boomers” born in 1946 will start turning 65 in the coming year. Later today, the AARP is set to release a report on a recent trend. People are retiring later.

Our senior business correspondent Bob Moon has more


Bob Moon: The AARP figures about 7,000 baby boomers will turn 65 each day in the year ahead. And if, as expected, more of them stay in the workforce, Uncle Sam could get a much needed breather. Professor Olivia Mitchell follows pension issues at the University of Pennyslvania’s Wharton School.

Olivia Mitchell: If we would all work a little bit longer, that would take some of the burden off Social Security, help us draw down our nest-eggs a little bit more slowly and, I think, make the labor market more productive as a whole.

But where does the trend leave up-and-coming workers? Mitchell says there’s a widespread but mistaken belief that older people need make way for younger workers. Actually, she says, employers end up hiring fewer workers if they’re forced to help bear the cost of benefits for people who retire earlier.

Mitchell: The taxes that have to be raised to support them, number one are very high, and number two, discourage the young folks from working hard, because there’s very little return to their effort.

Besides which, those baby boomers will also create new jobs, because somebody still needs to take care of them all.

I’m Bob Moon for Marketplace.

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