Physical setbacks and the steep costs of health care can shock even the most financially prepared boomer. A Fidelity analysis last year estimated that couples retiring at age 65 are expected to face $220,000 in health care costs during their retirement years.
So much for the working retirement that many boomers are thinking will bail out their lack of savings or keep their minds and bodies active.
However, it’s not simply a health issue, as noted by Teresa Ghilarducci of the Schwartz Center for Economic Policy Analysis in New York. Older workers are finding it harder to get hired and are making less money.
"Calling for an increase in the retirement age as a solution to a lack of retirement savings overlooks nearly half a century of economic literature on earnings," Ghilarducci writes in a recent blog post. "Economists have long known that age/earnings profiles have a parabolic shape, demonstrating a visible decline after the ages 55-59 as older workers are overlooked for promotions and on-the-job training. Workers experience a decline in earnings after ages 55-59 regardless of education levels."
As Ghilarducci said in a Slate interview in March, "Working longer is a retirement plan like winning the lottery or dying earlier is a retirement plan. Being able to work longer is not a plan. It’s a hope."
And as the saying goes, "Hope is not a strategy."