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MIAMI | Thu Nov 3, 2011 4:05pm EDT (Reuters) - Like many middle-class American baby boomers, Linda Carmona-Sanchez is anxious about slipping into poverty and says whatever dreams she once had about retirement in her "golden years" have turned into nightmares.

"We don't value people here in this country, and we value you less if you're not healthy and strong," Carmona-Sanchez, 55, said. "To me it would almost be a welcome blessing to know that I would die rather than to be old and have to live in poverty."

Her anxiety is widespread. In a recent Gallup poll, 66% of Americans ranked not having enough money for retirement as their top financial concern. That was up from 53% a decade ago and raised a red flag for U.S. policymakers concerned about distress and downward mobility in the middle class.

As the first members of the post World War II baby boom generation turned 65 this year, the United States stood on the doorstep of what many experts see as a looming retirement crisis.

It is a crisis that has many implications ့— whether for U.S. consumer spending, for younger workers as baby boomers stay in the workforce, or for further strains on the federal government's already ugly budget picture as the elderly seek more welfare.

Baby boomers are members of the first generation since the 1930s who will be worse off in their older years than their parents, says Teresa Ghilarducci, a retirement specialist and economics professor at the New School of Social Research in New York.

"According to our projections, it looks like most middle-class workers, not just low-income workers will be living at or near the poverty level in their old age," Ghilarducci said in an interview.

Older Americans, a powerful voting bloc in the 2012 presidential election, are keenly aware of the economic downturn that has left growing numbers living in poverty.

Carmona-Sanchez runs a Miami-based non-profit dedicated to improving the early care and education of pre-school children.

She has traveled the world and once considered herself solidly upper middle class. But she has no pension or retirement savings plan, and soaring medical costs stemming from the prolonged care of a chronically disabled daughter have left her struggling financially as she hurtles toward what once might have been a comfortable retirement.

Older workers are postponing retirement plans, or giving up on them completely in mushrooming numbers, because of fears they will outlive their saved money.

"I'm going to have to work until I die," said Linda Crosnoe, 63, an Orlando-area bookkeeper who recalls her parents retiring in their 50s and living comfortably in retirement for 30 more years.

"It's a conglomeration of stuff that went down over the years," Crosnoe said of the difference between her parents' generation and her own. "It never got better for the little people," she said.

There are multiple reasons for reversals in gains in fighting elderly poverty, including the impact of the financial crisis on stock prices and interest rates, the end of many traditional defined-benefit pension plans which provided people with a guarantee of retirement income, and the bursting of the U.S. housing bubble. But the trend is in line with statistics showing that median household income fell last year to levels not seen since 1996.

Huge numbers of older Americans are likely to fall below the official poverty line in the coming years, said Jack VanDerhei, research director of the Employee Benefit Research Institute.

Clinging to jobs

EBRI says confidence about being able to reach a comfortable retirement has reached the lowest level in more than 20 years in a survey it conducts.

That pessimism may be a healthy sign, since it means that Americans are losing a false sense of confidence and learning the virtues or savings and thrift. But it also means that people are working longer, because they cannot afford to leave the workforce and lose much needed paychecks and benefits.

Older Americans are already clinging to jobs at the highest rate since before Medicare - the federal health insurance plan for the elderly and disabled - was signed into law in 1965.

According to Labor Department statistics in an EBRI report, 31.5% of Americans aged 65-69 were still in the workforce in 2010, compared to 21% in 1990.

Still, many seniors leave the workforce earlier than planned because of health problems or layoffs. And critics say there are simply too many obstacles to building adequate savings for retirement.

"Rapidly rising health care costs are gobbling up everything," said Alicia Munnell, a veteran economist who heads the Center for Retirement Research at Boston College.

Munnell notes that only about half of the private sector U.S. workforce is covered by retirement savings plans. But even among workers who have retirement accounts, along with stocks or stock market mutual fund investments, there is little confidence about building retirement nest eggs.

Less than half of participants in a Wells Fargo/Gallup Investor Retirement Optimism Index survey earlier this year said they were confident about their ability to achieve a comfortable retirement or maintain their lifestyle without working in retirement.

Pensions and retirement investment portfolios took a major hit during the 2008 economic crisis.

Participants in the Wells Fargo/Gallup survey represented roughly the top third of Americans in terms of investable assets. The survey said the "lack of confidence concerning retirement among this more financially secure group of Americans does not bode well for those not as well off."

© 2010 Thomson Reuters. Click for Restrictions.

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