More Retirees Get Back In Saddle

June 25, 1995|By Kim Clark | Kim Clark,Bureau of Labor StatisticsSun Staff Writer

When she was 57, Juanita Lopez jumped at the chance to retire early from Baltimore Gas and Electric Co., figuring her 40 years of work had earned her a retirement of comfortable loafing around her West Baltimore home.

At 56, accountant Richard Kepple was thankful to take early retirement when the Pennsylvania acetate yarn plant he had worked at closed.

But, like a growing number of early retirees, both are now looking for work. The pensions offered to support them after they jumped -- or were pushed -- out of their longtime jobs turned out to be too small to keep them afloat.

Ms. Lopez said she enjoyed a year of loafing, but then realized she retired too soon. At 59, she's now looking for work to buttress her financial security in a world where companies have reduced retirement benefits and Social Security and Medicare appear threatened.

"Everything's iffy," she complained.

Early retirement will be an even iffier -- though increasingly common -- proposition for today's workers, pension analysts warn, as companies continue to pare their payrolls.

BGE, for example, used two offers in the last four years to trim 1,100 workers from its payroll, Westinghouse Electric Corp. trimmed 425 Maryland workers last year, and McCormick & Co. Inc. 273 this year.

And because employers are reducing already skimpy pensions and retirement benefits, more and more older Americans will find their pensions won't support them, said Martin Sicker, director of work-force programs for the American Association of Retired Persons.

But there's a catch to that, too, Mr. Sicker warns.

Retired workers are finding it much more difficult than they expected to land another job. And when they do find work, it tends to pay less than they had been making. That means many early retirees are finding they can never afford to quit working.

"It is kind of a depressing picture," he said. "A lot of baby boomers who want to retire at 50 are, really, never going to be able to retire," he said.

Just ask Mr. Kepple, now 65, who has been working for nine years to augment his $350-a-month pension.

"I can't afford to retire," he shrugged.

After long months of unemployment, Mr. Kepple signed up with a temporary agency, Towson-based Salsbury & Associates Personnel Inc., because he found "there's not much in the line of full-time jobs for someone as obviously old as I am."

But because there aren't even enough temporary jobs for him, and the ones he does get pay him only about $10 an hour without benefits -- less than his longtime job paid -- Mr. Kepple said he has to keep putting off his actual retirement.

"Maybe I can retire when I'm 70," he said.

Softening the bitterness over his often-delayed retirement, he said, is the knowledge that he's not alone: "There's a lot of people like me," he said. "Behind the eight ball."

Flooding back to work

Indeed, in an April article that was the first to document the trend, Bureau of Labor Statistics economist Diane Herz found that hundreds of thousands of early pensioners started flooding back to work in the mid 1980s, reversing a 40-year trend toward earlier retirement.

Her study of older men found that more than 40 percent of all male early pensioners -- about 1.4 million men age 50-64 -- were drawing a pension and working in 1993, up from 30 percent, or 1 million men, nine years earlier.

The reason for the return appears to be desire driven by need, she said. At age 50 or 60, many early retirees are physically and mentally vigorous, and eager to start new careers, further their previous careers or just stay busy, she said.

But many are making a choice out of what is becoming an economic necessity.

Ms. Lopez, for example, said she has decided to go back to work because she's still comparatively young and wants to "get back into the world."

She also wants a paycheck because, after only a little more than a year of retirement, she's realized she isn't as financially secure as she first thought.

"My pension is decent for right now. . . . But I have a long span of time ahead of me. I've got health insurance through the company, but heaven only knows for how long. Companies can change their mind at any time," she said.

In fact, health costs may be one of the most important drivers behind early retirees' return to work, Ms. Herz believes.

After accounting for inflation, pensions of the early retirees she studied grew only about 1 percent a year in the last decade, Ms. Herz found.

Meanwhile, health care costs skyrocketed. During the last decade, health expenditures for people aged 55-64 rose nearly 20 percent after subtracting out inflation, according to the BLS.

Younger and needier

Lorene Ulrich, who runs an AARP training program for older workers in Washington, said she has seen a change in the early retirees seeking work since the program began in 1988.

Then, she said, "we saw retirees who went back to work because they were bored."

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