Dreaming about an early retirement?
Before fleeing the workplace, today’s workers should consider changes to Social Security and some financial facts of life that are prompting many people to work until they reach ages 67, 70 and beyond.
Federal officials and financial experts are encouraging people to keep on working, and many are starting to follow that advice — some with groaning reluctance, and others with heartfelt satisfaction.
The trend toward early retirement during the last half-century already has been reversed, and changes under way in Washington will make it even harder to quit that full-time job.
Starting next year, revisions already approved for Social Security will gradually raise the age for receiving full retirement benefits to 67, and some members of Congress are proposing a further raise to age 70. It’s all part of keeping the system solvent well into the next century.
Apart from what happens to Social Security, lengthening life spans and more flexible work opportunities have changed the way people think about retirement. Eighty percent of Baby Boomers, according to a survey commissioned by the American Association of Retired Persons, now expect to continue working at least part time during their so-called retirement years.
“People are beginning to realize that all of us are living longer, healthier lives, so the concept of retirement that we had back in the ’60s has changed,” said Andrea Wooten, 43, president and CEO of Green Thumb, a non-profit nationwide job-placement service for senior citizens. “We are seeing people leading active, vibrant lives into their 80s and 90s. When you reach 55 or 65, you are looking at 30 or 40 more years of life.
“The idea of retiring at 60 or 65 is not as realistic for most people from a financial standpoint,” she said. “And a lot of people don’t want to retire.”
From just about any standpoint, retirement came much too early for Joe Gettys of Palm Beach Gardens, Fla., a former mechanical engineer.
Laid off in 1988 at the age of 52, Gettys found only temporary employment and fell into the abyss of an overly long retirement.
“It’s cost me a fortune in wages, having to stop work so early,” said Gettys, now 63. “Once you get up in age like I am, there’s not a lot available. Fortunately, my wife found a good full-time job.”
Nancy Gettys, 57, a secretary for the Boy Scouts of America, said she hates the thought of working to age 70.
“We are raising a grandchild, and by the time he hits college I hope to quit working,” she said. “But I don’t know if I’ll be able to.”
The Gettys’ experience is a cautionary tale about the consequences of raising the retirement age for Social Security.
Many workers cannot continue to labor late in life because they lose their jobs, are nudged into a company’s early-retirement plan or can no longer meet the physical demands of their job.
Raising the retirement age will only widen the gap between early retirement and a Social Security payoff, with costly results for many families.
Mindful of such concerns, Sen. Phil Gramm (R-Texas) applies what he calls a “calloused hands” test for those who propose a further raise in the retirement age.
“You show me somebody with calloused hands who believes that it is workable to raise the retirement age, and I will take it seriously,” Gramm says.
“The plain truth is that if you go out into the real world, you don’t see people up on scaffolding or using jackhammers who are 70 years old. I think in the end, if you do that, there will be huge numbers of people collecting disability benefits.”
For these reasons, raising the retirement age is not a popular option. But as they contemplate changes to keep Social Security solvent beyond the Baby Boom generation’s retirement, government leaders find that none of their options is popular.
Some members of Congress talk wistfully about somehow manipulating the growing government surplus to “save” Social Security without making painful choices.
But those who crunch the numbers and see a looming shortfall in Social Security funds by the year 2034 say the only solution is to raise the retirement age, raise taxes or cut benefits–or some combination of the three.
The Republican-run Congress already has delivered an emphatic “no” to any form of tax hike. President Clinton and most Democrats, backed by senior-citizen advocates, are loathe to cut benefits.
That leaves raising the retirement age, which seems a logical step. People are generally living longer, and many workers in the information age are physically able to tend their computers into their 60s and beyond. If more workers stay on the job, they will pump more tax revenue into the Social Security system rather than drain its resources by drawing benefits.
The retirement age for full benefits would be gradually raised to 70 under one of the most respected proposals for shoring up Social Security, a package recommended by the National Commission on Retirement Policy, headed by Sens. John Breaux (D-La.) and Judd Gregg (R-N.H.).
“Social Security will be an empty promise to the next generation unless we take action along the lines of the NCRP proposal,” Gregg said.
Many workers, young and old, already are getting the message that an early retirement is not an option for them.
“I’m planning to work until I’m 75,” said Bradley Gerber, 20, of Bal Harbour, Fla.
What might have once seemed a laughable boast has become a practical reality. Many of Gerber’s generation may find themselves working into their 70s.
“We’re starting to extend our productive life,” said Gerber, a student at Florida State University. “Most people aren’t involved in labor that is very physically intense. Now it’s more mental labor. Just because you turn 65 doesn’t mean you aren’t able to think any more.”
More and more senior citizens are still working or have returned to the workforce after dabbling in retirement. They are reversing the early-retirement trend that prevailed during most of the prosperous second half of the 20th Century.
In 1950, about 70 percent of 65-year-old men were still in the labor force, according to demographic data presented to the Senate Special Committee on Aging. By 1985, the rate had plunged to 30.5 percent.
Many workers took advantage of Social Security benefits, pensions and early retirement plans to pursue a life of leisure.
The pattern began to reverse during the mid-1980s, according to a study by the Employee Benefit Research Institute. By 1997, the rate of 65-year-old males in the labor force had risen slightly to 32.4 percent.
The pattern is far more complicated for women. A long-term trend is difficult to figure because women entered the labor force in huge numbers for the first time around World War II.
For some older people, work has become a necessity. And for many, it brings something more important than a paycheck.
“The feeling that I am of use to the world and helping other people is the most important thing in my life,” said 93-year-old Mona Clarke of Ft. Lauderdale.
With a vibrancy that defies her age, Clarke receives visitors as a volunteer at the Museum of Art in Ft. Lauderdale, and she helps maintain her family’s real estate business.
“She works because she needs to work. She couldn’t be inactive,” said her foster son James Molyneux.
“The people who age the most successfully maintain an enthusiasm and stay in the mainstream of life,” said Molyneux, 44, a former family counselor who specialized in gerontology. “They have something to wake up for. It’s those people who shut themselves up and don’t want physical exercise and mental stimulation, those are the ones who wither and die.”
The attitudes of both workers and employers are gradually changing to adapt to this new way of looking at “retirement.” These adjustments will become all the more necessary as Social Security goes through changes in the next few decades.
“More people will be needing to work later in life because they won’t be eligible for Social Security for a few more years,” said Wooten of Green Thumb, the job-placement service.
