Fed Study Finds 2 million in "Forced Retirement", 48% Cannot Afford an Unexpected $400 Expense

I have talked about "forced retirement" 174 times over the course of the past few years.

I defined the term as those who retired because they had to, not because they wanted to.

Why might they have to? Easy. If someone of retirement age wants a job and needs a job and needs income, but does not have a job the choice (after expiring unemployment benefits is to retire).

These people should be considered unemployed, but they are not. Instead they dropped out of the labor force.

We can now put some numbers on "forced retirement" thanks to a Fed study that shows 40% of households show signs of financial stress


Four out of 10 American households were straining financially five years after the Great Recession -- many struggling with tight credit, education debt and retirement issues, according to a new Federal Reserve survey of consumers.

This latest snapshot, which the Fed said was aimed at monitoring the recovery and risks to financial stability, adds to the understanding of the severity of the Great Recession's effect on households and individuals.

The survey found, for example, that 15% of those who had retired since 2008 had retired earlier than planned because of the downturn. Only 4% said they had retired later than expected. Based on demographics, that translates into roughly 2 million more people retiring since 2008 than if the recession had not occurred.

"This suggests that some of the folks who dropped out of the labor force during the recession will not be returning," said Scott Hoyt, an economist at Moody's Analytics.

Study Results

The above is from the LA Times which (as typical of mainstream media) did not bother linking to the study.

Inquiring minds may wish to see the actual study results.

The Fed report on the Economic Well-Being of U.S. Households in 2013, released today, is 200 pages long, but that is no excuse for failing to link to it.

Items in red below are things I found particularly noteworthy.

Key Findings


  • Over 60 percent of respondents reported that their families are either “doing okay” or “living comfortably” financially; another one-fourth, however, said that they were “just getting by” financially and another 13 percent said they were struggling to do so


  • The effects of the recession continued to be felt by many: 34 percent reported that they were somewhat worse off or much worse off financially than they had been five years earlier, 34 percent reported that they were about the same, and 30 percent reported that they were somewhat or much better off

  • 42 percent reported that they had delayed a major purchase or expense directly due to the recession, and 18 percent put off what they considered to be a major life decision as a result of the recession

  • Just over half of respondents were putting some portion of their income away in savings, although about one-fifth were spending more than they earned

  • 61 percent reported that they expected their income to stay the same in the next 12 months, while 21 percent expected it to increase and 16 percent expected it to decline



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