PBS had a recent article about retirees who stay in the work force beyond age 65. It interviewed economists. What it did not do was provide statistics on how many Americans work until age 75. The answer is: hardly any.
A proponent of working longer is Prof. Alicia Munnell, who is careful to keep her date of birth a secret. Here is her assessment.
PAUL SOLMAN: And, says Munnell, that would be a good thing for the older workers, considering that 55-to-64-year-olds have an average of only $120,000 dollars saved for retirement.
ALICIA MUNNELL: One hundred and twenty thousand dollars may sound like a lot, but when you think about taking that out over a 20-30 year retirement, you’re talking about only a few hundred dollars per month.
PAUL SOLMAN: So you mean if you have saved as much as $120,000 dollars in your late 50s, you’re still facing relative poverty?
ALICIA MUNNELL: People are not going to have very much money if they retire at 64. So my view is the single most important thing they can do is to work as long as they possibly can.
The problem is, hardly anyone believes this. Economist Lawrence Kotlikoff understands this. Dr. Munnell carefully avoids it.
LARRY KOTLIKOFF, Boston University: Only a very small share of people over 65 are going to continue to work under the best of circumstances, so it really can’t matter much to the macroeconomy or to our fiscal problems. It’s just not a big enough effect.
PAUL SOLMAN: So you don’t think that this is going to make that much of a difference?
LARRY KOTLIKOFF: Even if we had another 20 percent of people in their 60s continue to work through their 70s or 75, it just wouldn’t add up to much. It’s just not enough people earning enough money, paying enough taxes to matter much.
So, most Americans do not have enough savings. They retire anyway.
Most Americans believe in the tooth fairy: the federal government. They think the checks will keep coming. They will not budget. They will spend their $120,000 long before they die. Then what?