Why Many Americans Will Never Retire

By Douglas A. McIntyre Updated Oct 4, 5:19AM EDT · Published Oct 2, 11:17AM EDT

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Economists have expected for some time that many Americans will need to delay their retirements and work well into their 70s. There are no longer sure sources of investment retirement funds because of the volatile stock market and the drop-off in housing prices. Those who were frightened out of the market in most cases sold too soon and did not get the advantage of the run-up in the market over the last year.

American small business owners have begun to defer retirement, and a growing number say they will not retire at all. They will either be forced out of work by ill-health or will simply die with their boots on.

According to a new Wells Fargo/Gallup Small Business Index poll, “Nearly half, 47%, of small-business owners now plan to never retire until forced to do so for health reasons — up from about 4 in 10 in 2005 and 2007.” Another 41% plan to cut back on work but will not retire.

The survey also shows that business owners will retire later than planned. “When asked about a target retirement age, 69% intend to retire at age 65 or older — up significantly from 41% in 2005 and 52% in 2007.”

The trends will have a profound effects on several sectors of the economy. People who once might have moved south to Florida and the Carolinas are less likely to do so as they continue to work. This could kill a number of resort communities built for people over 60. On the other hand, homes that might have gone on the market as people retired may stay in the hands of their current owners for a decade longer than they might have in 2005. This could keep inventory off the market which would, in theory, help home prices recover.

People who retire at 60 often open up jobs for people two decades younger. Business owners who do not leave keep their younger employees from promotions that might increase their disposable income.

Finally, the deferred retirement of many wealthy Americans may increase the nation’s tax base as people who once planned to leave work and live on less money stay in their jobs because they do not have enough savings. Some of these people will be a solid base of unexpected ongoing tax receipts.

Results for the total data set are based on telephone interviews conducted July 6-12, 2010, with a random sample of 604 small-business owners.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.