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LIANE HANSEN, host:

This is WEEKEND EDITION from NPR News. I'm Liane Hansen.

American workers over the age of 50 are rethinking their futures. According to a new survey, nearly half of them say that in just the past year they have had to change their retirement plans and keep working.

For more on how the recession is changing retirement planning and reshaping the workforce, NPR senior business editor Marilyn Geewax joins us once again. Hey, Marilyn.

MARILYN GEEWAX: Hi, Liane.

HANSEN: Tell us a little bit more about this survey and what people are saying about their plans for retirement.

GEEWAX: Watson Wyatt, a retirement consulting firm, went out to interview a bunch of Americans about their plans for leaving the workforce. And the survey found that just in the past year millions of people have really had to rethink retirement. This recession has done a lot of damage to people's incomes, and retirement savings have shriveled up, and don't forget, our medical costs keep going up. So when Watson Wyatt asked people about their retirement goals, they now found that half the people say that not only are they forgetting about early retirement, but, really, they're planning to work to 66 or beyond.

HANSEN: So, how is that going to change the workplace?

GEEWAX: For employers, this shift to older workers is kind of a complicated proposition. While you don't have to put money into training your younger workers, you have to pay more in benefits and wages, a lot of times. One of the real problems here is that you don't want to discourage your younger workers. If you have a whole generation growing up feeling like Prince Charles, that you spend your whole life waiting to move up a notch, that's discouraging to the younger workforce.

HANSEN: What advice are the experts giving to people who are determined to retire no later than the age of 65?

GEEWAX: Well, statistics certainly show that people really do need to just save more and cut their spending. Two years ago, the Federal Reserve did a study that showed that median household pre-retirement group, you know, from 55 to 64, they had total assets, financial assets, of about 72,000. And, you know, since then we know that the stock market is down, that pile has probably been whittled to about 55,000 and we know that our home equity values have dropped, too. So when you just look at the data, you know that people have to save more. And the latest Commerce report on savings shows that people are getting that message.

HANSEN: Where are people supposed to stash their cash for retirement?

GEEWAX: It's funny, a couple of years ago, the trendy thing seemed to be to get these target date mutual funds, which you would put all your money into a retirement fund, and somebody like Fidelity or Vanguard would figure out how to get you the right mix of investments to get you safely to that retirement date.

But we found that when reality showed up last year and the stock market was terrible, a lot of those target date retirement funds did even worse than the market as a whole. So, this dream of just putting your savings on autopilot has pretty much evaporated.

My gut instinct is that people are probably going to move towards greater safety. Do things like insured certificates of deposit and Treasury securities, anything, so that we don't go through this gut-wrenching feeling of losing money the way we've seen in the last couple of years.

HANSEN: Marilyn Geewax is NPR's senior business editor. Thanks as always.

GEEWAX: You're welcome.

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