Mike Shedlock

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 unemployment benefits expire) 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.

Mike Shedlock

Mike Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management.

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