You call this retirement?
Today's retirees are defying the stereotypes about the golden years
It needs a new name for new times. The retirement years--defined for so long as a time to play or do nothing--are becoming a time of high activity and purpose. Today, some 22 million Americans ages 55 and over are working, the largest number since the government started gathering data in 1948.
Sixty-five became the magic number for retirement when the world was a different place. In the late 19th century, German Chancellor Otto von Bismarck set the age for retirement at 65, craftily calculating that the state would never have to pay pensions to the Prussian Empire's huge corps of soldiers given that life expectancy was then in the mid-30s. In the United States, the earlier and earlier retirement of men can be documented back to the late 19th century. But in a stunning reversal of that century-long trend, American men stopped retiring before 65 in the mid-1980s, and in recent years have begun retiring later--as have women--says economist Joe Quinn of Boston College, an expert on retirement trends.
No safety net. The grim reality is that a significant number of people can't afford to retire. Only half the workforce has company pensions to fall back on, and many haven't saved enough. Plus, in many cases, the sagging stock market and low interest rates have slashed retirement funds. A $300,000 nest egg invested in a CD at 5 percent three years ago earned $15,000 annually; at recent rates of about 1 to 2 percent, yearly interest is just $3,000 to $6,000.
In recognition of more people working beyond retirement age, eligibility for full Social Security benefits is being raised gradually to 67. At the same time, companies continue to cut pensions and health benefits, so second and third careers are commonplace. Just as important, many Americans don't want to slow down. Some 69 percent of respondents in a 2002 AARP survey said they will work past retirement age; last year, 45 percent told AARP they would work even into their 70s and 80s. "The vision of the golden years of leisure and recreation and being an aristocrat was so powerful people wanted to retire early," says Marc Freedman, author of Prime Time: How Baby Boomers Will Revolutionize Retirement and Transform America. Now, Freedman says, the promise of vigor well into one's 80s and beyond has changed the equation.
Factor in that Americans are better educated--especially women--and more adventurous than ever. Suddenly rocking on the porch looks really outdated. "Just as this generation of women reinvented the professions, now we have an opportunity to reinvent retirement," says Charlotte Frank, 69, cofounder of the Transition Network, a nonprofit organization that helps women find new paths of interest in their 50s and beyond.
The trend to delayed retirement will become a tsunami as 77 million baby boomers hit 65. This deluge of well-educated, reasonably healthy people with high socioeconomic status and no plans to retire could trigger a social revolution. John Challenger, head of outplacement firm Challenger, Gray & Christmas, notes that "by 2008, 2010, when the boomer population really starts to retire, the labor market could become a seller's market like the late '90s."
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