NATION Older workers postpone retirement

Five of six baby boomers surveyed said they don't expect an inheritance.
MINNEAPOLIS-ST. PAUL STAR TRIBUNE
Retirement is out of the question for many older people, reports the AARP, the 35 million-member group representing Americans over 50.
Some 45 percent of older working adults plan to continue working to age 70 or beyond, the organization's latest national survey shows. Today's older crowd is more physically fit and less financially prepared to abruptly depart from the work world.
The findings contradict traditional retirement patterns and the long-held theory that America's 76 million baby boomers, the oldest of whom are now in their late 50s, will exit the work force more or less en masse. Business has not adjusted to the trend yet.
Consider the demographics. Within three years, 40 percent of U.S. workers will be 45 or older. The ranks of those over 65 will swell 26 percent between 2005 and 2015. Meanwhile, the pool of younger workers will shrink. "Within the next decade," said Jeff Taylor, founder of the Internet jobs site Monster.com, "we'll see the biggest labor shortage in our lifetimes."
The factors
Economic developments in recent years lead some to question that assumption. Millions of older Americans had their savings savaged by the stock-market collapse.
The parents of boomers are living longer and running up medical expenses; in 2001, five of six boomers told the AARP that they did not expect an inheritance.
Additional worries include the soaring cost of health insurance, long-term care and prescription drugs, underfunded pensions and declining retiree health benefits. AARP hears from younger boomers that trends toward shifting the risks associated with retirement savings programs onto workers has made them more nervous about retiring.
"I plan to die with my boots on," said Tim Dyrhaug, a 62-year-old State Farm insurance broker. Though distinctly upbeat, Dyrhaug acknowledges he's nursing Wall Street wounds. If he stopped working now, his cash flow would be insufficient.
Not prepared
Few Americans are adequately prepared to leave work. In a 2003 retirement confidence study by the Employee Benefits Research Institute, 61 percent of workers surveyed said they had never calculated their needs for retirement. Half estimated that they will need 70 percent or less of their pre-retirement income. But experts generally recommend that people set aside much more.
"People are living for today," said Jon Dauphine, director of economic security and work programs at AARP. "It's a huge train wreck waiting to happen," he said.
Those who decide to keep working often find the idea does not go over well with the boss. Mandatory retirement is generally illegal except in occupations in which safety is a factor, such as flying planes and fighting fires. The Age Discrimination in Employment Act protects workers 40 and over from adverse employment action on the basis of age.
But as Americans get older and jobs remain scarce, buyouts and other retirement incentives are commonplace. Age discrimination has become the fastest-growing category of claims filed with the Equal Employment Opportunity Commission.
Retention overhaul
Rather than squeeze out older people, companies should think about holding onto those workers who remain when the bulk of boomers eventually retire.
The majority of businesses surveyed by the Conference Board last year lacked strategies to track and retain older workers. Many will have to change the whole structure of retirement and retention incentives installed over three decades, said Howard Muson, author of the study.
The very question of whether or not there is going to be a tsunami of retirements has caused companies to examine the way they treat older workers, Muson said. Companies rarely include age awareness in their diversity programs, or address misperceptions about what older people can and cannot do. He stressed the need for training in these areas.
Staying productive and engaged with others has protective benefits for seniors, geriatricians say. "Change for an older person can be very traumatic," said Charles Cefalu, chief of the section of geriatric medicine in the department of family medicine at the Louisiana State University School of Medicine. "Reaching age 70 and being told you have to retire has huge emotional, social and economic implications for a person," Cefalu said.