More Senior Citizens Are Opting to Stay Employed

Madame Kuony is in her mid-80s. She's busier than ever running a design firm and art gallery in Fond du Lac, Wis.

"I adore what I am doing," she says. "This is a much greater satisfaction than any retirement bus trip with 52 other people to look at some monument that I have long since forgotten. I can't even envision retiring."

Joe Miskit stopped working at 80--but not because he wanted to. When his wife of 60 years became ill, he quit his part-time job as a security guard at Leisure World to devote more time to her care.

"I told her that she took care of me for the first 60 years of our marriage; I'll take care of her for the next 60," says Miskit, 82. "The job was great," he says. "But if I continued working, I would miss either lunch or dinner with my young bride."

As these vigorous seniors can attest, the trend toward early retirement has ended--possibly for good. A new trend of working later in life--although often at a slower pace--has emerged instead, says Joseph F. Quinn, professor of economics at Boston University.

According to Quinn's research, a century-long slide in the retirement age came to an abrupt halt in 1985. Recently the number of workers over age 65 began to head up. Quinn believes this is a permanent shift, caused in part by longer, healthier lives, legal changes--such as the government's ban on a mandatory retirement age for most workers--and a societal shift from physical labor to service and technology jobs that are less physically taxing and potentially more psychologically rewarding.

There is some evidence to support Quinn's belief that the trend is likely to be lasting. For instance, a recent survey of baby boomers--those age 35 to 54--by U.S. Bancorp Piper Jaffray found that nearly two-thirds planned to continue working after age 65, a vast departure from surveys taken a decade ago, when virtually everyone professed a desire to retire by or before age 55.

The Social Security Administration, meanwhile, is also predicting increasing numbers of older workers, although not at the lofty levels suggested in the U.S. Bancorp survey. Instead, the government predicts that the percentage of gainfully employed 65-to-70-year-olds will rise from 28.5% now to 30% in 2020, and that the percentage among those aged 70 to 79 will rise from 16% now to 20%, says Stephen C. Goss, deputy chief actuary for the Social Security Administration in Baltimore. The all-time low rate of working for the 70s group was 14% in 1985.

The change comes at a critical juncture.

As the country grapples with disturbing news about its cornerstone retirement program--according to current demographic patterns, the Social Security system will run short of cash just as the last wave of baby boomers retires--this crest of graying workers could give both themselves and the country a needed financial boost.

By and large, seniors who work are far better off financially than those who do not. Moreover, because aging workers continue to pay into Social Security and delay taking benefits, they provide an economic cushion to a system that had been projected to hit a breaking point in 2032.

"If the economy stays strong enough so that all of these people who say that they want to work are able to work--or so that even half of those people are able to continue to work--Social Security will take care of itself," predicts Dallas Salisbury, president of the Employee Benefit Research Institute in Washington.

Goss doesn't think the system can be saved quite so easily, mainly because the longer you work, the more Social Security will pay you in eventual monthly benefits. But thanks to the additional taxes that older workers would pay into Social Security and the economic benefit of having these individuals delay taking money out, the system will certainly be helped.

The major advantages of continuing to work are to the individuals themselves, he says.

Statistically, working seniors are among the most affluent members of their generation. The reasons are twofold and predictable: In addition to Social Security, they have working income, which they can spend or use to supplement their savings. Second, Social Security benefits are based on your 35 highest earnings years. If you work more than 35 years, relatively low-wage years are replaced with high-wage years in the computation, boosting your so-called "primary insurance amount'--your base monthly benefit. In addition, those who delay taking Social Security benefits after turning 65 (or 66 to 67 for younger boomers), get something called delayed retirement credits.

The combination of these credits and throwing additional earnings years into the "primary insurance amount" computation can have a significant impact on the monthly benefit a retiree receives.

"Whether you are talking about individuals or families, the most likely way to be a wealthy retiree is to continue working to supplement your income," Salisbury says.

Certainly, seniors who are working say they reap a host of rewards--both economic and psychological--by remaining in the labor force.

Consider Miskit. When he turned 65 in 1982, he registered with the Social Security Administration, but he told them just to sign him up for Medicare. Then a salesman for an auto glass company, Miskit worked just one day a week. But the company compensated him handsomely--$200 a day, plus a company car.

He was still going strong at age 70, when Social Security begins to pay monthly benefits whether you want them or not. Miskit didn't need the extra income, so he invested the money and continued to work. In 1992, at age 75, Miskit left his job, but he quickly decided he wasn't suited to a life of leisure.

He took a part-time position checking people through the gate at Leisure World, where he lives. He loved the job because it helped the gregarious senior citizen keep in touch with his neighbors. The pay? Miskit jokingly calls it "a very lucrative" $5,000 to $6,000 a year. Still, it was more money than he needed to spend.

"The money just piled up," Miskit says.

Now he's grateful for it because his wife needs convalescent care. Thanks to the nest egg he built largely during those 15 "post-retirement' years, he is able to afford a top-notch facility for her that's within walking distance of his home.

Sahms, who lives in Pasadena, officially retired from a Los Angeles-based real estate management and development company in 1990 "with no money worries." He then set out to reorganize his personal life; get his investments in order; put things on his personal computer; and, finally, go on vacation.

"We went to Maui for a month. It got tiresome after about two weeks,' he says.

Three months into retirement, he walked back into his old office to sign a few papers. The next thing he knew, he was helping out with a "little project"--the sale of 1,100 mobile homes. Countless mobile home parks, hotels, motels and retirement developments later, Sahms describes his job and his life--wife, children, finances, friends and boss--with affection.

"I've been blessed," he says.

When will he really retire? Sahms starts to reply with conviction: "Sincerely, I think I'll probably retire by the end of this year. Certainly, by the end of next year," he says. Pause. Chuckle. "If I tried to fully retire, I'm sure the boss would call me up and say, 'Hey, let's go to Chicago.' That would be the end of that. . . . But I am going to slow down. Maybe I'll work at 10% versus the 50% I do now. Just for something to do."

Of course, not all working seniors are in the labor force just for fun. Some would prefer more leisure, but financial pressures keep them going.

"The truth of the matter is, I have to subsidize my Social Security,' says Joseph A. Mintz, a Dallas-based insurance agent who will turn 81 in October. "I didn't squander my money, but I didn't save it, either."

Still, Mintz says, even if he didn't need the money, he'd still be working--though perhaps not quite as much.

"There are a lot of people like me who don't retire because they are not golfers or fishermen or they don't have sufficient income for the pleasures of life," he says. "They just can't fritter their time away by watching television and reading trashy novels."