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Chasing Down Retirement

The Chicago Tribune, 7/27/08

Abstract:

It seemed like a good idea.

Baby boomers who never got around to saving as much as they hoped promised to keep working past retirement age. The joke in the generation has been: "I'll just work forever." And the intent has shown up repeatedly in research.

But now along comes an economic downturn, and people are losing jobs. It looks as though Plan B, a lifetime of working, might not be an option to rescue undersavers after all.

"It's a perfect storm," said Jack VanDerhei, a Temple University professor and fellow at the Employee Benefit Research Institute.

Too many people approaching retirement age have saved too little, accumulated too much debt, stretched too far on homes that have lost value and never made good on the promise to save more tomorrow, he said.

Working longer can make an enormous difference, but, now, tomorrow is working in reverse. Unemployment is climbing. Some baby boomers will be scrounging for employment in their 50s rather than sprinting toward the retirement homestretch by pouring last-minute savings into 401(k)'s and individual retirement accounts.

With food and energy taxing overstretched family budgets, the opposite approach to 401(k)'s is evident: People are pulling money out of their workplace savings plans at unusually high rates instead of rushing to stuff extra cash into them.

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