If you’ve been coasting along contentedly toward midlife, AARP (www.aarp.org), formerly the American Association of Retired Persons, knows how to elevate your blood pressure: A membership invitation arrives on your 50th birthday. So much for immortality. For a $12.50 membership fee, you’re entered into AARP’s expanding database of 35 million members, and you have taken the first step as a participant in the great retirement game.
When we become 50 we are understandably ambivalent, if not indifferent, about retirement. Youth, we rightfully maintain, is still on our side. Retirement seems like an event in the distant future. But sooner than we anticipated, retirement is on our doorstep. It may even be accelerated by the twin effects of downsizing and early-retirement buyout plans. Retirement-related questions begin to surface, and at best, we have entered into uncharted waters.
As the many profiles in this book will make clear, it’s difficult to define “retirement.” We’ve euphemistically called retirement the “golden age” and the “leisure years.” The French call it “The Third Age” or the age of living (which follows the ages of learning and working), possibly the most accurate of these descriptions. Contrary to the dictionary definition, retirement need not be a “withdrawal from one’s position or occupation, or from active working life.”
In fact, looking at the current environment of corporate restructuring and those affected by it, the AARP found that “those nearing retirement no longer seek it as a sharp break with the past.” Rather, today’s “preretired” seek continuity. Many anticipate “retiring” from their lifelong career only to continue working, either in a new job in the field they’ve been in or in an unrelated area.
Much depends on how you feel about your career. As much as some people enjoy their work, they might be emotionally burned out and physically exhausted after 30 to 40 years; they’re ready to take a break or do something different. Countering those emotions may be a feeling of guilt, especially among “Depression-age babies” who were born in the 1930s. They were inoculated with a self-perpetuating work ethic that makes it difficult to accept retirement of any sort.
When counseling retirees, Boston gerontologist and sociology professor David Karp finds that “some feel that there are important things left unfinished in their work lives. As would be expected, people with unfinished agendas were relatively more engaged in work and least likely to look on retirement favorably.”
No so with Gary Johnson, At age 53, Gary doesn’t consider himself retired. “I just don’t work,” he says. Gary decided to call it quits in 1999 at age 50, a year after his employer, Scudder Stevens & Clark, the financial management firm, was acquired by Zurich Insurance.
Gary had held a series of jobs after graduating from Colgate University in 1971. He worked for Seafirst Bank in Seattle and Mellon Bank in Pittsburgh and earned his MBA from the University of Rochester when he was in his early 30s. After Gary joined Scudder Stevens in the late 1980s, his career had zoomed. When he left, he was a senior partner and manager of Scudder’s fixed-income research.
Gary and his wife, Luana, sold their suburban Boston home and moved to a summer place they had bought years earlier in Mattaspoisett, Massachusetts, midway between Providence, Rhode Island, and Cape Cod. Their child was already grown and living in New York. Gary’s goal was to get a doctorate in applied mathematics at Brown University and to join a college faculty. Two years later, he left Brown with a master’s degree and taught math for one year at a charter school. “I left when I found that I wasn’t comfortable teaching kids who were disinterested in learning.”
Unlike the financial distress experienced during this period by some of Gary’s contemporaries who had been downsized and were eagerly seeking employment, Gary’s financial problems were minimized thanks to a favorable Zurich severance buyout and a personal investment portfolio that Gary had assembled during his Scudder years.
No longer pursuing an additional graduate degree or an academic career, Gary returned to public service, with which he had had experience while planting trees in Washington State in the 1970s (work that was subsequently destroyed when Mt. St. Helens erupted). “I’m now a full-time volunteer. Besides working with the Coalition for Buzzards Bay [a nonprofit organization dedicated to the restoration, protection and sustainable use of the bay and its watershed], I’m president of the Mattapoisett Land Trust. We already own 380 acres and our goal is to increase the acreage.”
A Take on Retirement
“Retirement is a bad word in this society, particularly, as it turns out, for those who have not yet retired. There is no doubt that it represents a major turning point in life. It is also a major opportunity. Common belief is that those who retire either shrivel up on park benches or fritter away the rest of their lives playing bingo and shuffleboard in senior-citizen centers.”
From Growing Old
by Christopher Hallowell
How Do You Feel About Retirement?
- Do you see retirement as a reward for a lifetime of hard work or as a punishment for growing old?
- Is it an opportunity to learn and do things you’ve always longed to pursue?
- Is retirement like a banishment from a way of life that you’ve cultivated over the years?
- Is retirement something you’ve determined never to do, based on someone else’s experience?
- Are you looking forward to it, planning and dreaming over it?
The Generation Gap
Our closest role models may not be much help in thinking about retirement. Growing up, I knew very few people who had retired. My parents and their friends were self-employed professionals or owners of small businesses who worked, as was the custom a generation ago, until they died or were physically unable to work. Since my father had virtually no retirement savings or benefits, retirement was not a part of the household vocabulary.
The formula was rather simplistic for our parents’ generation. People worked longer and died earlier. In 1900, people who survived to age 65 could expect to live another 12 years, and 80% of men 65 or older were still working. Compare that with more recent figures (provided by the Center for Disease Control’s Institute for Health Statistics): In 2000, life expectancy at age 65 increased to 17.9 years for the 35 million people over age 65 (men and women who live to age 65 can expect to live another 16 years and 19 years respectively), and nearly 18% of men and 10% of women who are age 65 or older were still working.
The Bureau of Labor Statistics (www.bls.gov) confirms that Americans are retiring earlier. In the early 1950s, the median retirement age of Americans was 67; in the early ’90s, it was 62; and over the next several years it is expected to be age 61.
So we’re living longer and leaving the workforce sooner. Simple arithmetic proves that most retirees need to find ways to redirect the 2,000 to 2,500 hours or more a year that were once spent at work.
A Financial Change of Fortune
A generation or two ago, a retirement package, if one existed, consisted of a testimonial gift together with a relatively small pension and equally small social security benefits. A pension was not always an inherent right. Less than 60 years ago, the average American worker, unless handicapped or ill, never considered retirement—or could afford to. The Social Security Act was passed in 1935 in response to the financial hardships caused by the Great Depression and to provide workers with the type of social benefits many Europeans had been enjoying for 50 years before.
For most Americans in the mid 1930s, retirement with an assured pension was limited to the wealthy and to a few long-term corporate and government employees. In an era when life expectancy was around 63 years, Congress set 65 as the age of eligibility to collect $30 a month in benefits. Over the next 55 years, social security coverage was broadened to include nearly all wage earners. New features were added in stages—in 1965, medicare insurance coverage and in 1974, the pegging of retirement benefits to the consumer price index. Even with these enhancements to the social security system, the average retiree in 1973 received a $166 monthly check, compared with approximately $846 in 2001. Nowadays, says AARP, 60% of workers take social security benefits beginning at age 62, the earliest age of eligibility, compared with 40% of workers in 1980 and 28% in 1970.
Not only have government-mandated benefits improved, but so has discretionary income. Marketers have discovered that the golden years for Americans between 55 and 64 are indeed bright in terms of discretionary income. While their incomes on average are slightly lower than that of the older baby boomers, these folks over 55 often have a financial advantage since their children have completed college and are self-supporting. Starting at age 65, income begins to decline.
|
