Work Still Appeals to Many Seniors
The country clubs and cruise lines will have to wait.
The share of American men 55 and older and still working rose to 40.4% in July, the highest since January 1984, according to Labor Department figures. The 28% for women was a record, and participation in the labor force among females over 65 jumped 6.5% during the last year.
Seniors are putting off retirement or returning to work after watching slumping stock prices take a bite out of their savings over the last two years. Changes in government and company retirement plans are enticing people to work longer. Higher life expectancy and better medical care are pushing retirement dates back. And some, like Estelle Granger, find working more enjoyable.
“I don’t know if I’ll ever retire,” said Granger, 57, an accountant who spent 25 years in banking. Four years ago, she took early retirement, only to find herself sitting around her house on New York’s Long Island. “Most of my close friends were working. I was so bored.” Six months later, she joined Robert Half International Inc.’s Accountemps temporary service and logs an average of 30 hours a week.
Stories like Granger’s provide evidence the economy will continue to recover from a recession that began in March 2001 because it indicates companies are hiring and consumer spending is less likely to falter, economists said.
“People are willing to go back to work to earn extra income and they’re able to do so,” said Mickey Levy, chief economist at Banc of America Securities.
Moreover, the longer Americans keep working, the greater the relief for the Social Security Administration, which is running out of money to pay benefits, as baby boomers born between 1946 and 1964 retire.
The Social Security trust fund that pays disabled workers may dry up as early as 2028, the government forecast this year. The Medicare trust fund will last until about 2041, while the Social Security pension fund has until about 2043 before it runs out of cash.
“If people would work until they’re 70, we wouldn’t have a Social Security crisis,” said Richard Johnson, a senior research associate at the Urban Institute.
When Congress passed the Social Security Act in 1935, the average American lived an average of 58 years. Now, life expectancy for both sexes and all races is 77.
Other factors also are at work. Employees have to shoulder more of their retirement costs as companies shift to plans that require workers to make contributions, such as 401(k)s.
Fixed-benefit pensions based on earnings and years of service mean additional years of work don’t add much to retirement payments unless incomes in later years rise dramatically, Johnson said.
By contrast, 401(k)s and other worker-managed plans provide an incentive to stay on the job longer because employees can keep amassing savings, he said.
The stock market’s slump has accelerated the trend toward working longer, economists said. About 54% of Americans ages 55 to 64 have at least some of their retirement funds in the stock market, according to a September 2001 report by the Investment Company Institute.
“The sudden turn for the worse in people’s portfolios has made the idea of financing two decades of leisure out of the question for society as a whole,” said Clare Hushbeck, a labor economist with AARP, which changed its name four years ago from the American Assn. of Retired Persons to reflect the fact that much of its membership was still working.
Bern Beatty, the “over 70” accounting professor at Wake Forest University in Winston-Salem, N.C., just can’t slow down.
“I absolutely have no idea how I could spend the time more pleasantly doing other things,” Beatty said. “I don’t like cruises. I don’t like golf. And if I stayed at home my wife would get very tired of me.”
