Working In Your 80's? More Americans Delaying Retirement To Make Ends Meet

Almost one-third of middle class Americans say they'll need to work when they're 80 to afford retirement.

Elderly woman looks sad

Older workers may become an increasing drag on some businesses, as their salaries and insurance rates tend to be higher.

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Faced with scant retirement savings, an increasing number of middle-class Americans plan to start their golden years much, much later according to a new report.

Almost a third say they'll need to work until they're at least 80 years old to live comfortably in retirement, according to a Wells Fargo study that surveyed 1,000 adults with incomes less than $100,000. That's up from 25 percent a year ago.

"They're feeling like they're in a real pinch," says Laurie Nordquist, executive vice president at Wells Fargo Retirement. "They think: I know I'm not saving enough, so I can work longer."

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But working well into one's 70's or 80's isn't always feasible or even possible, Nordquist says. According to the survey, although almost 40 percent said they'll need to work in retirement out of financial necessity, nearly three-quarters said their employer probably wouldn't want them to work at that age. Health issues could also stand in the way of seniors working well into their golden years.

Those without adequate savings and unable to work as long as they had anticipated face an unpleasant future, with more than one-third ending up living at or near the poverty line. About 34 percent of middle-class Americans estimate their retirement income will be 50 percent or less than their current annual income. Based on Census data that shows a median household income of about $50,000 in 2011, that means a big chunk of the population could be living on $25,000 a year or less, close to the poverty line for a family of four.

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Despite those scary statistics, retirement savings continue to remain on the back burner for many Americans as more pressing and immediate financial commitments take precedence over longer-term goals. More than half of middle-class Americans report paying their monthly bills is their primary concern, up 37 percent from a year ago. Retirement savings are second on the to-do list, but experts fear the financial pressures of today could mean financial disaster later on.

More than half of Americans said they don't know whether they'll have enough saved for retirement (up from 42 percent last year), but a lot of that uncertainty comes with a lack of preparation. Just 22 percent said they actually calculated the amount they needed to save for retirement, while 75 percent said they just guessed.

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But one example--health care costs--shows why guessing at the finances you'll need for retirement is dangerous. According to the survey, middle-class Americans estimated the median out-of-pocket cost for health care in retirement to around $47,000. But according to the Center for Retirement Research, costs for a typical retired couple could balloon to $260,000 or more over their remaining lifetime.

"People really shouldn't delay," Nordquist says of retirement planning, noting 20 percent of men in their 40's thought they were too young to start. "We say your 20's isn't too early. Don't lose any more time and that will really make a difference."

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Meg Handley is a reporter for U.S. News & World Report. You can reach her at and follow her on Twitter at @mmhandley.

Corrected 10/23/2012: An earlier version of this story misstated the percent change in Americans planning to work until they are at least 80.