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."
Having options. This much is clear: The new unretirees want choice in how to stay involved. But choice is hard to find, say a chorus of sociologists and economists. "The policy issue is how to provide more options for people who don't want a full-time job," says Phyllis Moen, a University of Minnesota sociologist who has spent her career studying retirement. She means options like gradual retirement, "bridge" jobs, intermittent work, and more volunteerism.
Joanne Johnston is a case in point. A Ph.D. in family relations, child development, and administration, she was a troubleshooter interpreting federal policy for 10 counties in North Carolina's social services department at a time of widespread child abuse and child neglect. When she retired recently at 52 after 31 years, she thought she would "go about doing good," so she volunteered at her church and local hospital.
After eight months, "I was fit to be tied to find something to stimulate my mind," she recalls. Johnston took a job at Mission Hospitals in Asheville tracking the postoperative health of heart surgery patients. Then she managed a 150-unit HUD elderly-housing complex. "I did everything from finance to tenant relations, to seeing that the elevators ran and people paid their rent on time."
Now Johnston edits books and studies at the North Carolina Center for Creative Retirement at the University of North Carolina-Asheville. "I feel young, vibrant, alive, energetic, and enthusiastic. I'm learning to play the piano and do strength training." Having no financial worries helps, she acknowledges. "I'd like to work until I no longer can."
That sentiment is echoed by former Wall Street investment banker Henry Lanier. Lanier left Lehman Brothers at 59, after managing its housing-finance group for 10 years, to join the Low Income Investment Fund, a nonprofit that gives loans to developers to build kindergartens, day-care centers, and affordable private housing in poor neighborhoods of California and New York.
The closer Lanier got to retirement age, the further the vision of chilling out with family at a beach house in Massachusetts receded. "The house on the shore is a wonderful idea as long as it's a break in the action, but if it becomes the action itself, it becomes a little unappealing," he says. The switch was a big pay cut, but he still brings in six figures.
Many unretirees gravitate to nonprofits and the service sector, which are eager to have skilled professionals and impose fewer barriers to gradual retirement than corporate America does. Last year, hospitals hired 100,000 new nurses, most over the age of 50. Universities routinely permit professors to gradually retire by teaching fewer courses over a number of years.
"I love the congeniality and camaraderie," says Manhattanite Audrey Bloch, who helps people move out of poverty at the HOPE Program in Brooklyn by assisting them in finding jobs. The former director of career services at Pace University wants to work "until I feel I am not productive," observing that many of her female friends retired when their husbands did and now regret it.
Moen's research makes clear that "either paid or unpaid work promotes all kinds of indicators of well-being: life satisfaction, more energy, more physical health, less depression," the University of Minnesota sociologist says. "I had a high-level engineer who stopped doing that and was selling hot dogs at a ballgame--it got him out, and he enjoyed it."
Others embark on ambitious new careers. Inspired by several trips with Earthwatch Institute, which matches volunteers with scientists around the world, former ad agency owner Bruce Belcher in Boise, Idaho, became a wildlife photographer. He now travels around the world for half the year, photographing wildlife, and he has begun to sell some of his photographs online. A photo of a tiny dung beetle dragging a pellet of springbok dung in the Namib Desert was a finalist in National Wildlife magazine's photography contest.
There's also been a rise in volunteerism. "In general, this group of older folks is healthier, better educated, and has a higher socioeconomic status, and every generation from here on is going to be that," says Nancy Morrow-Howell, a professor of social work at Washington University in St. Louis. "People over 70 have the biggest rise in involvement."
Foster Grandparents is one of the longest-standing groups to give new roles to older Americans. RV Care-A-Vanners is another. These owners of recreation vehicles drive from site to site around Canada and the United States, building homes with Habitat for Humanity. They are hooked up free, fed by local church groups, and work five days a week. Experience Corps, originally conceived as a domestic Peace Corps for older Americans, has 1,300 volunteers in 12 cities. Charles and Lois Corley, ages 67 and 69, respectively, give 15 hours a week to the group by mentoring third graders in literacy in Philadelphia. Charles Corley continues despite a stroke last year that left him with double vision. "The kids have grabbed my emotions," he says. "I found you can't just say, 'Let's read,' because many of the children have got problems."
Easy does it. A growing number of workers are turning to bridge jobs as they approach retirement. The senior assembly line at Bonne Bell cosmetics factory in Westlake, Ohio, is a good example. It has a waiting list. Its average age is 72. Workers start at $7.75 an hour, rising to $8.25 after the first year; after two years they will make $8.50. There are no benefits but two weeks of vacation and assorted personal days. Bonne Bell has two four-hour shifts a day, and workers can choose the one they prefer.
Josie Kothera, 75, works the blister machines that cover Bonne Bell's "Lip Smackers" in hard plastic cases to hang from drugstore displays. "I didn't want to sit around at home not doing anything," says Kothera, a widow. "This is a great place to work." Her coworkers are ages 55 to 84. Most are women, including retired school principals, teachers, and autoworkers. "These workers are conscientious," says manager Robert Wotsch. "So many people say a 70-year-old can't run a blister machine that they give a little more because they have something to prove. If they can't stand for the shift, we give them a stool."
Some companies are working hard to keep their employees after retirement. At CVS pharmacy, 16 percent of its employees are age 55 or older, compared with under 7 percent 12 years ago. Jeanne Penn, 81, sold the pharmacy she'd owned for 30 years to CVS when it moved into her hometown of Zanesville, Ohio, and now works for CVS. "I'm going to work as long as they want me to," she says.
Procter & Gamble in Cincinnati and Eli Lilly & Co. in Indianapolis came up with the idea of creating an independent company to hire its and others' retirees. YourEncore enrolls research-and-development experts and scientists for short-term projects. "We wanted to get new innovative DNA from other companies," explains Larry Huston, the P&G vice president who started the program.
"I think the most important thing is we are inventing a whole new stage of life," says Marc Freedman, "in between work and retirement."
This story appears in the June 14, 2004 print edition of U.S. News & World Report.