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Redefining What It Means to Retire

For Variety of Reasons, Many Aging Baby Boomers Balk at Ending Careers

  • Michael Monk does his student teaching in an 11th-grade U.S. history class Thursday at West Campus High School, a Sacramento, California, magnet school. Monk, 52, has turned to teaching as a new career after his construction company went under during the recession. (Autumn Payne/Sacramento Bee/MCT)

    Michael Monk does his student teaching in an 11th-grade U.S. history class Thursday at West Campus High School, a Sacramento, California, magnet school. Monk, 52, has turned to teaching as a new career after his construction company went under during the recession. (Autumn Payne/Sacramento Bee/MCT)

  • Lauren Peters, Director of Women's Health for Kaiser Permanente Outpatient Clinics in part of Sacramento, California, confers with business ine manager Sherwood Sterling. Peters does not plan on tapping in to her company's pension plan for at least a decade, probably more. (Autumn Payne/Sacramento Bee/MCT)

    Lauren Peters, Director of Women's Health for Kaiser Permanente Outpatient Clinics in part of Sacramento, California, confers with business ine manager Sherwood Sterling. Peters does not plan on tapping in to her company's pension plan for at least a decade, probably more. (Autumn Payne/Sacramento Bee/MCT)

  • Michael Monk does his student teaching in an 11th-grade U.S. history class Thursday at West Campus High School, a Sacramento, California, magnet school. Monk, 52, has turned to teaching as a new career after his construction company went under during the recession. (Autumn Payne/Sacramento Bee/MCT)
  • Lauren Peters, Director of Women's Health for Kaiser Permanente Outpatient Clinics in part of Sacramento, California, confers with business ine manager Sherwood Sterling. Peters does not plan on tapping in to her company's pension plan for at least a decade, probably more. (Autumn Payne/Sacramento Bee/MCT)

Sacramento, Calif. — Even after four decades in practice, Sacramento, Calif., family law attorney Hal Bartholomew, 66, has no wish to retire.

“It’s disappointing to talk to someone who can’t wait to retire,” he said. “I really enjoy what I do.”

Retirement is nowhere on the horizon for 52-year-old Michael Monk, either — but for entirely different reasons. His small construction company went under during the recession, and he and his wife liquidated their savings to pay bills. Their plans to retire in their 60s evaporated, as well.

Now he’s working toward his teaching credential, hoping to find a full-time job as a high school government teacher. “I can work as long as my health lets me teach,” he said. “Teaching is my retirement.”

In huge numbers, members of the baby boom generation — born from 1946 through 1964 — tell researchers that they don’t plan to retire. In one recent AARP survey, nearly 70 percent of baby boomers reported they intend to work past the traditional retirement age of 65.

Those numbers have given rise to a fair amount of happy talk about how this generation is poised to reinvent retirement. Yet the retirement picture, like so much else for the nation’s 78 million graying baby boomers, is complex.

On the one hand, baby boomers like to work: Despite a generational stereotype portraying them as free spirits who reject tradition, boomers in the prime of their working years have enthusiastically embraced the work ethic, often defining themselves by their careers.

Throwing on the career brakes at age 65 simply sounds counterintuitive to many baby boomers. The working world has long embraced them, largely because they’re better educated than the generations that came before or since, with almost 30 percent holding at least a bachelor’s degree and another 30 percent having attended college.

But it’s also true that, with the death of traditional company pensions and more recently the biggest economic downturn since the Great Depression, the baby boom generation in many ways has no choice but to redefine what retirement means.

Many would leave the daily grind of jobs if they could. But ongoing financial obligations to aging parents and grown children, as well as financial burdens left by the recession, have combined to make many boomers’ retirement prospects more difficult.

“The reason that older participation in the workforce increased has nothing to do with the health and well-being of people that age,” said social critic Susan Jacoby, author of Never Say Die: The Myth and Marketing of the New Old Age.

“It’s an economic need.”

The average retirement age in the United States hit a low of 62 in the mid-1990s, when the majority of boomers’ parents were retiring; today, it is 64 and climbing, according to the Bureau of Labor Statistics.

Seniors’ portion of the workforce has risen as well. By 2020, according to Bureau of Labor Statistics figures, baby boomers will account for more than 25 percent of the workforce, up from 16 percent today.

That figure rivals the share of older adults who continued working past age 65 in 1951, before Social Security was fully phased in for all professions and people could count on retirement income.

In short, what most baby boomers face is far from their parents’ version of retirement, which began early — at age 55, for many — and has lasted for many decades’ worth of bridge games and golf excursions.

For public sector employees whose benefits include a defined monthly retirement income, that sort of retirement remains possible. But across the country, public employee ranks are thinning, and public pension reforms are beginning to reshape their retirement landscape, as well.

“Benefits for retirement have been declining in the private sector,” said Chris Hoene, executive director of the California Budget Project, “and now the public sector is following suit.”

For millions of private sector workers nearing retirement, the shift in their economic future has already occurred.

The nation’s three-decade transition away from defined benefit pensions and company-funded retiree health benefits has stripped from millions of boomer-aged Americans the kind of retirement security their parents took for granted.

“Everyone I know is terrified of outliving their money,” said AARP’s national jobs expert Kerry Hannon, who blogs for Forbes on retirement issues.

“Most people are going to need to work in some fashion past what we think of as retirement age, and that will primarily be a financial decision.”

The reasons are familiar.

In 1980, 80 percent of Americans working in the private sector relied on companies’ traditional defined benefit plans as the foundation of their retirement finances, according to Employee Benefit Research Institute figures.

Then private companies latched onto tax-deferred 401(k) plans — the retirement savings accounts originally created to help executives shelter extra money in addition to their pensions — as a way to shed the burden of providing benefits to retirees.

By 2005, EBRI says, only one-third of private sector workers had either traditional pensions or a combination of a company pension plus 401(k). Half of all working Americans have no retirement plans in place at all.

In a sense, millions of baby boomers have helped test whether the 401(k) is a reliable financial model for retirement.

The answer? Most people haven’t saved enough to make it work.

Experts say the average 401(k) balance now is about $75,000: Stock market gains in recent months have helped offset the fact that up to one-fourth of people tapped into their retirement savings during the tough recession years.

Even so, EBRI estimates that retirees will need an average 401(k) balance of $900,000 to support them in the extended longevity of their old age.

For boomers hit hard by the recession, like Michael Monk — starting over with a new career in his 50s, without a cushion of savings or a pension — continued employment is the only option.

“There are a lot of aging baby boomers who want to find work and can’t,” said Jacoby. “When you look at the economic losses of the past five years, you realize that the baby boomers who still have jobs will have to be carried out feet first.”

For many other boomers, it’s not just about money. In their 50s and early 60s, a lot of baby boomers are in the most productive years of their careers and want to continue working as long as they can. For them, delaying retirement, at heart, amounts to a lifestyle choice.

Lauren Peters, 56, is a registered nurse who doesn’t plan to tap into her company-provided pension for another dozen years.

A widow who lives in Land Park, Calif., Peters is director of the Kaiser Permanente outpatient women’s health clinics in the region. She has two teenage daughters to put through college in the next decade.

“I have a great job,” she said. “I’m highly energized by my work. But I also feel it’s important for my daughters to see as they break into the working world that I can be a role model as a career woman.”

In fact, if every baby boomer were to retire on schedule, experts say, the resulting brain drain of skills would threaten the country’s economic growth.

“There will be a shortage of replacement workers,” said University of Southern California demography professor Dowell Myers. “It used to be that early retirement was the best way to upgrade the workforce. Get the old guys out after 55, and your new workers would be better educated.

“But the baby boomers are the best educated generation in history. They’re perfectly qualified to undertake continuing in their jobs. They have wisdom and job experience. You’d only retire them if you could replace them with someone younger and cheaper.”