— In these scary economic times, older workers are putting off their retirement and hanging on to a paycheck.
Some retirees struggling to make ends meet are scanning help-wanted ads for the first time in years.
About a week ago, Jeff Rollison, a 60-year-old employee at the General Motors Corp.’s plant in Lordstown, Ohio, told the automaker he was retiring. Now, he’s changed his mind.
Rollison is worried that something could happen to his retiree health benefits before he would become eligible for Medicare at age 65. Rollison is the sole breadwinner for himself and his wife. But he also is concerned about his grown children, including a son with three kids who is being laid off at a neighboring GM plant. “If something would happen with General Motors and our health care would go away, which has happened to a lot of companies here, I would have to wait five more years to be Medicare-age,” said Rollison, a member of United Auto Workers Local 1112. “There’s a lot of uncharted waters out there and we have questions that can’t be answered by anybody right now on how well the company will do in the short term.”
An AARP survey of 1,100 people conducted in December indicated that 16 percent of people 45 and older had postponed retirement because of the economic downturn. But the percentage of people planning to delay retirement shot up to 57 percent among respondents who were working or looking for a job and had lost money in the market during the past year. Consumer confidence held steady in March, with a slight blip upward halting three months of declines as slivers of hopes about the economy buoyed consumers. But Americans are still feeling gloomy about their future given mounting layoffs and shrinking earnings.
Robert Dobkin’s last day on the job as spokesman for Pepco, a utility company in the District of Columbia and Maryland, was supposed to be April 1. Now, it’s delayed indefinitely. “I felt that I was in a good position to retire until the market kept going down and down and the economy ground to a halt,” said Dobkin, 67. “I just figured there’s no point in retiring in this time of uncertainty until I have a better feel for where the economy is going.”
The average retirement age, which was between 62 and 63 for men and women last year, is on the rise, according to the AARP Public Policy Institute. For instance, the percentage of 63-year-old men who were in the work force rose from 44 percent in 2000 to 51 percent in 2007, according to the institute.
The recession is not the only reason people are working longer. Life expectancy rates are going up. So, too, is the age at which workers are entitled to receive full Social Security benefits.
Mark Lassiter, a Social Security Administration spokesman, said that while some older people stay on the job during economic downturns, others turn to Social Security because their jobs are eliminated. The agency reported a nearly 9 percent increase in retirement claims between the 2008 budget year and 2009, which ended Sept. 30.
An increase was expected because baby boomers are starting to retire, but the jump was higher than anticipated because of the recession, he said.
Some companies are looking to cut costs and keep younger, less-expensive workers. Yet some businesses are happy to keep experienced workers. “Experienced workers produce more per hour with less supervision than youngins’,” said William Dunkelberg, chief economist for the National Federation of Independent Business and an economics professor at Temple University. “The elderly may, in fact, be cheaper than teeny boppers” because they require less training, seek part-time work and will accept lower wages.
Read “How to Know When the Economy Is Turning Up.”
See the best business deals of 2008.
