Wednesday, November 12, 2008
IN MY OPINION:
Working in Retirement: The New Reality
By TED RUHIG
Over 40 years ago - in 1964, to be exact - I was living in Chicago and served on a prestigious city-wide committee, chaired by the mayor of Chicago, Richard J. Dailey.
Members of the committee were leaders in industry as well as the public sector. The goal of the committee was the creation of a retirement planning process termed “planning for living the rest of your life.”
This committee worked under the auspices of the Mayor’s Commission for Senior Citizens. Its major result was a booklet which described a “do it yourself” retirement planning process to be completed by individuals in the comfort of their own homes.
The “do it yourself” retirement planning booklet was to be completed with a spouse or a friend. It asked the reader to make a list or fill in the blanks. In each case, the reader was encouraged to talk over the answers with his or her family.
The booklet asked a number of questions: (1). Are you ready to retire? (2). Can you afford to retire? (3). Where will you live? (4). How will you spend you time?
The overarching theme of the booklet was that the way a person feels about retirement, and the ways a person prepares for retirement, will largely determine how a person fares in retirement.
The goal of the booklet was to provide guidance for folks so they could fashion their retirement plans with surety, based on an appropriate assessment of choices. By making thoughtful choices, they could count on a bright future in retirement.
What brought to mind this long-ago retirement planning process was an advertisement I saw recently, which posed the question: “How long a retirement should you plan for?” This ad was for Hallmark cards, and it revealed that Hallmark sold 85,000 “Happy 100th Birthday” cards last year. How are people planning for all of these “extra” years?
A recent Washington Post article suggests that attitudes toward retirement have shifted dramatically in the past few years, with an increasing number of seniors now seeing their later years as a time for “reinvention” rather than a reason to end their working lives.
The article, entitled “Not for Sissies,” asserts that “for life in old age, the rules have changed.” Instead of 30 years of leisure, more boomers are headed for a new life and career stage. The article suggests that we need to swap the old notion of freedom from work for a new freedom to work in new ways or on new terms to new ends.
This desire to keep working is probably a good thing. People have to consider if they can even afford to retire these days, especially as the current stock market is chipping away at 401 (k) balances, and home values continue to fall in many areas.
Those close to retirement or already retired are being forced to ponder unsettling questions. Their aggregate losses, totaling billions of dollars, raise the question of whether losses this severe will reshape seniors’ behavior on four key issues: working longer or returning to the workforce, selling or not selling their homes, where to put their financial assets, and how to pay for health care through their retirement years.
A study by the Employee Benefit Research Institute, as reported in Consumer Reports “Money Adviser,” notes that 65-year-old males will need to save $196,000 just to cover their health care premiums during their retirement years; for females, who live longer, it’s $224,000.
An increasing number of Americans approaching retirement age appear to be trying to hold on to their jobs or re-enter the workforce if they’re retired. A July report from the U.S. Bureau of Labor Statistics shows that between 1977 and 2007, the number of workers across the country age-65 and older increased a whopping 101 percent. Among senior men, the increase was 75 percent. Among senior women, it was 147 percent.
A 2008 survey of AARP residents in one state (Michigan) finds that retiring comfortably at age 62 is simply not a reality for many who expect to work well past the traditional retirement age. In particular, 36 percent are working full-time, 9 percent part time, and 49 percent consider it extremely (27 percent) or very (22 percent) likely that they will continue working well beyond retirement.
The most common reasons for continuing to work cited are:
•Health insurance coverage (54 percent)
•Enjoy working (45 percent)
•Need for extra income (44 percent)
•Paying for prescription drugs (41 percent)
The AARP survey also reports that 50 percent plan to work part-time and pursue hobbies when they reach the retirement age, while 37 percent intend to work at their current jobs for as long as possible. With respect to when they will retire, 23 percent think they will retire between 60-64, 37 percent between ages 65-69, and 20 percent at age-70 or older.
Working in retirement, once considered an oxymoron, is becoming the new reality.
©2008, Capitol News Service