Jason S. Seligman
John Glenn School of Public Affairs, The Ohio State University
TIAA-CREF Institute Fellow
March 2010 |
Late career workers experience direct exposure to risks in the areas of earning, saving and wealth management. In particular they are exposed to a risk of involuntary retirement. This risk is substantial: three in ten retirees responding to the Health and Retirement Survey between 1992 and 2006 reported their retirement as “forced.”
Involuntary retirement is a direct challenge to retirement security; workers face the prospect of financing longer periods out of the workforce with fewer periods of work.
Involuntary retirement is associated with reduced income replacement and dissatisfaction in retirement, yet disability coverage is lower overall than for other employer offered benefits. And fundamentally very little in the way of long term “economic dislocation” insurance exists. Financial planning strategies are commensurately nuanced, and inherently partial; objectives should emphasize stabilizing wealth accumulation and facilitating any necessary transition to wealth consumption ahead of planned retirement.