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Response to Tansy_Gold (Original post)

Tue Feb 19, 2013, 11:44 PM

5. GAO Report: Cost of the Financial Crisis — Your Retirement By Pam Martens

 

http://wallstreetonparade.com/2013/02/gao-report-cost-of-the-financial-crisis-your-retirement/

...On April 25 of last year, the GAO released a study specifically looking at just the toll on workers. (GAO-12-445.) Among the findings:

Long-term unemployment rose substantially, and at a greater rate for older than younger workers. By 2011, 55 percent of unemployed older workers had been actively seeking a job for more than half a year (27 weeks or more).

Long-term unemployment can put older workers at risk of deferring needed medical care, losing their homes, and accumulating debt.

The GAO identified out-of-date skills, discouragement and depression, and inexperience with online applications as reemployment barriers for older workers.

Long-term unemployment can substantially diminish an older worker’s future retirement income in several ways. First, it can force a worker to stop working and stop saving for retirement earlier than the worker had planned. Second, long-term unemployment can lead individuals to draw down their retirement savings to cover living expenses while they are unemployed, which was a common life experience described by GAO’s focus group participants.

GAO illustrated how a hypothetical worker who had $70,000 in retirement savings at age 55 and withdrew 50 percent of those savings during a 2 year period of unemployment, would need about another 5 ˝ years of work and saving to rebuild the retirement account to the level it had been before unemployment began.

Long-term unemployment can motivate older workers to claim early Social Security retirement benefits, which will result in lower monthly benefits for workers and their survivors for the rest of their lives....

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LineReply GAO Report: Cost of the Financial Crisis — Your Retirement By Pam Martens
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