Retirement: Not just for 65 year olds

This story was originally reported by PRI’s The Takeaway. For more, listen to the audio above.

People approaching retirement age are being rethinking their plans. In 2007, 2008 and 2009, CBS reports that more than 70 percent of new filers into Social Security did so early. In 1980, only 57 percent collected early, and in 1970, just 47 percent.

State and local governments are also looking to retirement adjustments as a way to shore up their ailing budgets. They can’t do much about existing workers, but many new workers are signing on to get their retirement benefits later and later.

Some are questioning whether the idea of 30-and-out — where you spend 30 years at a job before retiring — may be a thing of the past.

“As people are living longer, provisions like that are becoming more and more expensive to maintain,” Frank Todisco, a Senior Pension Fellow at the American Academy of Actuaries, told PRI’s The Takeaway. At this point, people are questioning whether the standard retirement packages are affordable anymore.

The rising cost of health care is also playing a role in making pensions “extraordinarily expensive,” according to Alicia Munnell the director of the Center for Retirement Research at Boston College.

For now, the retirement age for state and local jobs is quite young, compared to the private sector. That has even lead to instances of “pension envy,” according to Todisco, where people from the private sector “look at the benefits in the public sector and see that they don’t have that and are calling for greater equity.”

That equity shouldn’t come at the expense of public pensions, according to at least one listener. Marissa, a teacher, says “we give up certain things for the job security.” She didn’t make as much money as people in the private sector, and yet now her pension is in danger, too.

The fact is that people are going to have to make some hard decisions, according to Munnell. Social Security is going to provide somewhat less in the future, in comparison to current earnings. People are relying more on their 401k plans, which may not have much money in them. And the overarching problem, Munnell, is the fact that “there are no jobs out there right now.”

“The Takeaway” is a national morning news program, delivering the news and analysis you need to catch up, start your day, and prepare for what’s ahead. The show is a co-production of WNYC and PRI, in editorial collaboration with the BBC, The New York Times Radio, and WGBH. More at thetakeaway.org