1: It literally pays to work, and MONEY can buy peace of mind
When he took an early buyout in 1998, ending his 30-year marketing career, Don Vellek could easily have retired for good. The stock market, after all, was raging at the time. Vellek had enough money to live comfortably, following the buyout. And retiring early was the holy grail of baby boomers in the late '90s.
But Vellek chose to keep working. He had co-owned a travel agency for years as a side venture, and the Atlanta resident decided that his retirement from corporate America offered him the perfect opportunity to run that small business full time.
Then two years ago, Vellek sold his company, presenting him with yet another chance to retire. But again, he chose to keep working. He agreed to stay on at his old firm, where he is now a travel agent for the company that bought him out. "The way I figure it, it's kind of like momentum," says Vellek, now 59. "Things are rolling along quite nicely, so why would I want to give this up?"
It's a question more and more older workers are asking themselves today. While it was fashionable to retire early in the late '90s, and while it may have been necessary to retire later than expected in the aftermath of the subsequent bear market, older workers today are voluntarily--and happily--working longer. And there isn't likely to be an end in sight to the trend, with 77 million baby boomers nearing retirement age.
Unretirement. As strange as it sounds, nearly a quarter of older workers who describe themselves as "retired" are still working, either full time or part time. The typical self-described working retiree puts in around 20 hours a week. And many say working longer pays them big dividends--financial, emotional, or both. No wonder two thirds of American workers "now think they will work in some capacity in retirement," says Michael Falcon, who heads Merrill Lynch's retirement group.
To be sure, some retirees plan to keep working for the cash. After all, a majority of workers age 55 or older have less than $50,000 saved for retirement. But this trend is based less on dollars and more on the sensibilities of today's older workers. Workers once looked forward to rest and recreation at the end of a long career. But today, the vast majority of 60-somethings who want to keep working say their chief reason is to stay physically and mentally active.
These are people like Gregory Czubik. The 59-year-old was offered an early retirement package from his auto-industry employer last year. But the Kingwood, Texas, resident turned it down, he says, "because I feel like I can still contribute."
For Vellek, a self-described foodie and wine lover, working at a travel agency has unique benefits, including access to attractive travel packages that ordinary retirees would never learn of. Plus, he can tap into his long-term relationships with cruise lines and hotels around the world. "The perks of working are really terrific."
Of course, the financial perks are also considerable. A big reason it pays to remain on the job is that work literally pays. No matter how small the income your job generates, it will help stretch your resources to fund a longer--and probably better--retirement. "Even a couple of years can make a huge difference," says Patricia Brennan, president of Key Financial, a planning firm in West Chester, Pa. Glenn Kautt, president of the Monitor Group, a wealth management firm in McLean, Va., says that "it's like a 2-to-1 factor." For every additional year or so of work, he says, you can extend your nest egg by two years.
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