Delaying Retirement Is the Latest Wrinkle


When Mike Davis' high-pressure job supervising the upgrade of the world's largest radio telescope was coming to an end, he faced a choice--a new project or a leisurely life of golfing or fishing.

Like millions of Americans, Davis, 62, decided that retirement didn't fit into his plans. He went to work in the Silicon Valley last year to develop an even more powerful radio telescope using hundreds of 20-foot commercial satellite dishes.

More older Americans are staying in the work force longer, reversing the decades-long trend toward early retirement.

Last year, 12.8% of people age 65 and older were in the work force--the most since 1979, according to the Labor Department. The percentage has been increasing since the mid-1990s after decades of declines.

Health is a big factor, said Ryan Helwig, an economist with the Labor Department's Bureau of Labor Statistics.

"The older population today is healthier, living longer, better educated and therefore, more suited to continue working than their counterparts in the past," Helwig said.

Dwindling retirement savings and escalating health-care costs also are keeping older Americans in the work force longer.

Employers increasingly are scaling back traditional, guaranteed pension benefits in favor of voluntary, defined contribution plans like the 401(k), and fewer are offering health insurance to retirees.

Davis and his wife, Jean, 61, a teacher, financially were able to retire.

Instead, the couple last year left Puerto Rico, their home of 26 years, for California and the new project, a $20-million joint venture by UC Berkeley and SETI--Search for Extra-Terrestrial Intelligence. Scientists will use the telescope to continue their search for signs of intelligent life elsewhere in the universe.

"How often does a phone call come in at my age that says, why don't you take your life and turn it upside down and change it radically?" Davis said. "This was such a fascinating, new idea that I said, 'Gee, I've got to be a part of that.' "

Companies that downsized in the 1980s through early retirement packages and buyouts now are searching for ways to lure older workers for their dependability, experience and work ethic.

Also, policy changes in Social Security and age discrimination laws have removed retirement age requirements, as have the creation of 401(k) plans and more flexible individual retirement accounts.

For many, work is a necessity, especially for older women and minorities impoverished by rising health-care costs and poor savings.

"I will work until I die," said Margaret Johnson, 62, of Portsmouth, Va., who works part time in an elementary school library but would prefer a full-time job.

She alone is raising two grandchildren, ages 10 and 13, and has no retirement savings or health insurance. Social Security isn't enough to get by. She's worked three part-time jobs at times to make ends meet.

Money always was too tight to set any aside. Much of her work life was spent following her now ex-husband's military career, so she never accrued retirement benefits, or worked jobs that didn't offer them.

"I don't need a whole lot," Johnson said. "When it is just me and I don't have to worry about any grandchildren I can live in a room and be happy."

Dwindling retirement savings, escalating health-care costs and increased life expectancies are creating tremendous societal challenges, said John Rother, legislative and policy director for AARP.

"We now live in a society where so many people are doing well, but a lot of middle-class retirees will die poor," he said.

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