BLUE STATE BLUES:

Study finds obstacles to retirement: Mass. workers not saving (Scott S. Greenberger, 6/6/2004, Boston Globe)

The leading edge of Massachusetts' 1.87 million baby boomers will reach retirement age in less than five years, but many who hoped to retire in their early 60s will be forced to work longer, because they won't have enough Social Security and other income, a study to be released tomorrow says.

Despite the relative prosperity of the state as a whole, about a third of full-time employees in Massachusetts lack any pension coverage. The Bay State has a below-average homeownership rate, meaning fewer retirees will be able to draw on that nest egg. The state's notoriously high cost of living makes it harder for everyone, especially fixed-income retirees.

"There is unfortunately every reason to believe that Massachusetts families approaching retirement age are without sufficient resources and will have to consider working well past age 63, the current average age of retirement," said the study by MassINC, a nonpartisan think tank.

Massachusetts ranks 12th in the country in the age of its residents. The state is part of a historic age shift affecting the entire country, including the labor force, retirement planning, and government resources for older people. Employers will have to adapt to an older workforce that will be more educated but also more expensive because of benefits. Workers will be forced to put together a retirement package from a dizzying array of options, many of which have changed in the last several years.

In 2000, 13.5 percent of the population in Massachusetts was older than 65, a portion that will increase to 18 percent in 2025. Barnstable County has the highest percentage of people over 65 years old in the state -- 23.1 percent of its population, far higher than Florida's 17.6 percent statewide average, the study said.

Nationwide, the under-55 population will remain fairly constant, in part because of a growth of younger immigrants, but Massachusetts will see a big drop in its under-55 population by the year 2010. In 2000, there were nearly 550,000 people in Massachusetts between ages 55 and 64. The number of people in that age group will jump to 834,000 by 2025, the MassINC researchers said.

"Massachusetts is on a collision course," the study said. "The Bay State faces a huge demographic shift to a much older population."

Let's hear one more round of that old refrain about how demographics are self-correcting...

Posted by Orrin Judd at June 7, 2004 11:49 AM