More Americans delay retirement

A September survey by insurance company Sun Life showed that two-thirds of American workers expect to labor a year longer than originally planned. The figure is up 11 percent from the same survey conducted in January. "There is a huge drop in confidence that has taken place," because of the fall of stock markets since 2007, Wes Thompson, president of Sun Life's U.S. division toldReuters.

Sun could have saved the time and effort. With the value of American homes --once considered equity for retirement funds -- and stock portfolios suddenly undermined by the recession, many seniors simply cannot afford to retire without a substantial change to their standards of living. Some now believe that working another year or two could help, but in a lot of cases, an extra year of work won't do the trick.

What the Sun survey does not show -- but most economists know -- is that there is a domino effect when older workers stay in the job pool. As their children graduate from high school, college, and graduate school, the number of available openings for new workers is squeezed by high unemployment and the need for their parents to continue earning a living wage.

If home values do not recover, the economic calculus for people who would like to retire is likely to get worse. A house that could have been sold for a $300,000 profit in 2006 may now yield no profit at all. The owner of that home may have to work a lot longer than a year to make up the difference.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Read Full Story