BUSINESS PULSE: A SPECIAL REPORT : RETIREMENT : For Some, Life of Retirement Isn’t Nirvana
After “a lot of personal soul-searching” and with no firm plan for the future, Pacific Bell manager Evelyn Augustus decided to accept the phone company’s offer to take early retirement in 1988.
“It was a good offer,” said Augustus, 56, who during a 20-year career with Pacific Bell worked her way up from an operator to manager of municipal and emergency 911 installations in Orange County.
“I had kind of reached the peak of management level that I could go,” she said. “With the downsizing of the company, the opportunities to move into the second tier of management were not good.”
Augustus got the chance to do what many of us spend years daydreaming about: grabbing the good life after waving goodby to our employers. We think about playing golf every morning, crisscrossing the country by motor home or retiring to a quaint seaside village in Spain.
Indeed, many of us think we would like to retire early if we could. According to The Times Orange County Poll, 55% of employed county residents would like to retire when they reach age 55, if not sooner. And that sentiment is even stronger among those who are in their early careers or mid-careers, with about two-thirds hoping for an early retirement.
The Times Poll also showed, however, that those who are nearing retirement age are far less likely than their younger colleagues to want to retire early. One in three who are in the advanced states of their career want to retire at age 66 or older, and 20% want to keep working past age 70.
But while many of us may think we want to retire early, employment specialists said that many people soon discover that a life of leisure isn’t all it’s cracked up to be.
A recent study by Challenger, Gray & Christmas, a Chicago-based international outplacement consulting firm, found that about half of early retirees want to return to work after three months in retirement.
“Some people go out and travel for a year, and others go play golf for a year,” said John A. Challenger, vice president of Challenger, Gray. “They realize that what was once play loses its charm when it becomes their full-time activity.”
But restlessness or boredom aren’t the only reasons people decide to come out of retirement.
Some retirees find that they miss longtime friends at work and the office camaraderie. Others feel that retirement doesn’t offer them the sense of purpose and self-accomplishment that their jobs did. This latter feeling, employment experts said, is particularly true among corporate executives accustomed to a fast-paced, decision-making environment.
Edgar S. Brower is one such executive. Six years ago, at age 53, Brower took early retirement from Allied Signal Corp., where he was president of the firm’s $1-billion electronic components division. He walked away with a lucrative severance package--a so-called golden parachute--that left him financially set for life.
He spent the next three years playing golf and tennis, watching over his investments and “just kind of putzing around.” But after a while, he said, “you suddenly realize that there are a whole bunch of hours in the day that you can’t fill. You’re kind of out of the club now. I didn’t miss the limousines and helicopters and private jets. It was strictly the need to get those creative juices flowing again.”
Brower, a former U.S. assistant postmaster general, went back to work in 1985 as president and chief executive of Pacific Scientific Co., a Newport Beach aerospace and industrial products manufacturer.
“I’m not even thinking about retirement now,” he said.
But many early retirees face a much different financial picture. Although the lump-sum payments and sweetened pension packages that companies often offer to early retirees may look attractive at first, people often find that retirement living is more expensive than they expected. Some discover that they are just not ready to live a more frugal lifestyle.
Early retirement “is a big financial planning task, and trying to figure out what to do is very difficult,” said Brian Mittman, a Rand Corp. analyst who is studying early retirement trends. “The normal worker is not equipped to make these type of decisions.”
Pacific Bell’s Augustus discovered that very thing. Augustus was one of thousands of Pacific Bell employees struggling with the question of early retirement when the company’s parent company, Pacific Telesis Group, was trying to cut costs to keep up with increasingly tough competition in the telecommunications industry.
To help nudge workers out the door, the company offered an attractive severance package: an extra five years tacked on to workers’ age and length of service. Augustus took the bait.
And after leaving the phone company, she enjoyed herself by redecorating her condominium in Orange and helping her son, Morgan, set up a Southwestern-style furniture store in Irvine. But eight months later, reality kicked in.
“Financially, I wasn’t prepared for full retirement,” she said. “The pension check would not have allowed me to keep up my lifestyle, at least not until I was eligible for Social Security.”
So Augustus has gone back to work as manager of telecommunications for Colonial Insurance Co. of California in Orange. “There are a lot of new challenges, and this job has really stimulated my mind,” she said. “It’s like a whole new career.”
Employment specialists said, however, that Augustus is more fortunate than some early retirees who decided to go back to work. She worked in an industry with a strong demand for experienced professionals--and she didn’t stay out of the work force too long.
“The longer they (retirees) are out of the workplace, the less desirable they become in the market,” Challenger said. “Hiring companies wonder about their motivation, the currency of their skills and why other companies have not hired them.”