Wednesday, February 24, 2010

Offset Market Losses by Delaying Retirement

Source: Urban Institute

Delaying Retirement an Additional Year Could Offset Stock Market Losses

Barbara Butrica, Karen E. Smith, Eric Toder

The sharp decline in the stock market in 2008 placed the retirement security of many Americans at risk. Although the market has rebounded this year after bottoming out in March 2009, as of mid-October 2009 the S&P 500 Index remained 30 percent below its peak level two years earlier. This brief simulates the impact of the 2008 stock market crash on future retirement savings under alternative scenarios. The results show that by delaying retirement one additional year, many mid- and late-career workers could increase their income at age 67 enough to offset some or all of their stock market losses.

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