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Older workers are increasingly relying on the labor market—rather than savings—to salvage their retirement prospects. The collapse of the financial sector wiped out an inflation-adjusted $2.8 trillion from 401(k)s and individual retirement accounts, or IRA, between September 2007 and December 2008. But even before that, workers were not saving enough to achieve a secure retirement. Millions of elderly workers have therefore been forced to postpone their retirement plans and depend upon work to provide income in their later years.
But the labor market is a very mixed bag for older workers. Those who currently have a job have been more effective than their younger counterparts at holding onto their positions in the current downturn; the real value of older workers’ median weekly earnings has grown more during the current recession than that of younger workers; and their unemployment rates—despite reaching record highs—are still considerably lower than the national average.
Yet the news is bleak for older workers without a job. Workers 55 and older have a higher unemployment rate than anytime since 1948, and those who are unemployed are staying unemployed much longer. Given employers’ reluctance to start hiring again, it is likely that older workers will have to continue looking for work for months before finding a job.
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