February 8, 2006

Work pushing away retirement

Trend may signal big social change

By Alison Grant

Omer Blodgett may be 88 and have 60 years at Lincoln Electric Co. Still, he is the wave of the future.

Research shows that nearly eight in 10 baby boomers expect to be working in their later years.

That finding comes as the oldest boomers are turning 60, nearing what has been the traditional retirement age since the advent of Social Security in the 1930s.

Of course not all workers have Blodgett's unusual stamina and desire to work until they drop.

The metallurgical engineer has won just about every imaginable award in the field of welding and crossed the globe as a senior design consultant for Lincoln Electric.

Monday through Friday mornings, he still opens the door to his small office at headquarters and dives into mind-bending research - one day last month, it was devising a computer program that calculates the arc heat efficiency of welding methods.

As for retirement, Blodgett figures it will come only because of a stroke or something like that. "They won't let me drive any more, and that will take care of it."

Population studies show that an increasing number of employees are changing the notion that 65 is the normal retirement age. Whether they want to or have to work into their elder years, their numbers are growing.

The labor participation rate of people 65 or older fell from World War II until bottoming out in the mid-1990s, when just one in 10 seniors was working or looking for work.

Then participation began a slow, steady climb.

Today, one in five senior men is in the work force, the Bureau of Labor Statistics says, on a par with the rate in 1978. The participation of senior women is 12 percent, the highest since the bureau started keeping the statistic in 1948.

Brookings Institution scholar Barry Bosworth has some theories on forces driving the trend:

A growing number of white-collar workers who find little distinction between their avocation and their vocation and just want to keep working.

The rise of defined contribution plans such as 401(k)s that are an incentive to stay on the job, especially if the plan has an employer contribution.

Broader reach of the Age Discrimination in Employment Act to forbid mandatory retirement in professions that previously allowed it, such as academia.

Changes in retirement law to eliminate reductions in Social Security benefits for those 65 and older who keep working.

Inadequate retirement saving by Americans and, in softening housing markets, less ability to finesse the problem by drawing on home equity.

In addition to those who stay in the work force out of enthusiasm for their job, there's a group of seniors who stay because they need the money, health coverage or both.

The AARP says that pre-retirees and working retirees are initially more likely to cite non-financial reasons for working in their senior years. A 2003 poll found that maintaining mental and physical health, and remaining productive or useful top the list of reasons for continuing to work.

But when respondents were forced to select a single major factor in their decision, the need for money was clearly No. 1

Putnam Investments, a Boston money management firm that specializes in retirement plans, found that home mortgages spur seniors to stay on the clock.

Results of an online survey of people who retired and then returned to work found that 60 percent still carried mortgages.

A researcher at the State University of New York at Stony Brook found that people who have health insurance are less inclined to return to work. Among the employed, those with retiree health insurance plans are more likely to quit, said Hugo Benitez-Silva, assistant professor of economics.

The "three-legged stool" of retirement income - savings, pension and Social Security - is just too wobbly for some, Economic Policy Institute senior economist Jared Bernstein said. And with health care so expensive, workers who want more wraparound coverage than Medicare provides can find themselves in a kind of "job lock," he said.

Ken Dychtwald, founder of Age Wave Inc., a San Francisco research consultant, said we are living in an era when "rehirement" will be more popular than full retirement.

Dychtwald said the mid-20th century was shaped by Social Security. It provided an institutional way - in what at its inception was a time of high unemployment - to remove older people from the work force to make way for younger employees. Then came a period in the 1960s and 1970s when success was measured by how young you could retire.

Dychtwald said we are on the cusp of yet another era.

"People now do not really want to retire at all," he wrote recently in The Futurist, a magazine of the World Future Society. "Rather, they want a 'turning point,' a chance to step out of a full-time job or an exhausting career, take a break or sabbatical, and then reinvent themselves."

Louise Kiefer is in the rehirement camp.

At 85, she's campus historian for Baldwin-Wallace College. Back when she taught German - that lasted 49 years - she used to drop by the office of B-W's former historian for a chat.

"I would go to visit for 10 minutes, and I wouldn't be out of there for an hour," Kiefer said.

Even after her formal retirement in 1991, the snow-haired professor kept teaching an advanced German literature class. When the part-time historian's job opened up, she went for it.

Kiefer lives at the Renaissance Health Center in Olmsted Township and says she doesn't play bridge. "My husband died in 2003, and I was glad to have something to fill my time."