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Boomers -- Will They Shun Retirement?

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Boomers don't speak with one voice when it comes to retirement. Although about four in 10 admit that they can't wait to retire, just as many say they won't ever want to stop working. Even more expect to work in retirement. The media, policy analysts and worker advocates have zeroed in on the would-be workers: Boomers, they suggest, will be the new face of retirement; they will do things their way -- combining spells of work and leisure in creative ways later in life, forging second or third careers, becoming senior entrepreneurs, even working to very advanced ages.

Many boomers will do some or all of these things, as even older workers are doing now. But boomers will also retire -- often early -- despite assertions to the contrary. In fact, they are doing that already. True, retirement-age boomers are more likely to be in the labor force today than their counterparts of a generation ago, thanks largely to women's rising labor force participation, but those who remain at work at age 65 are still in the minority.

Although the eligibility age for full Social Security benefits is now 66 for the oldest boomers, relatively few are waiting that long to collect, despite the promise of higher monthly benefits if they do.

Not all retirement or early Social Security receipt is by choice, of course. Even the best-laid plans may be thwarted by a company that goes under, relocates or reorganizes, by illness or disability or by unexpected caregiving demands. Long-term unemployment, which once again topped a year for older jobseekers according to the latest employment data from the Bureau of Labor Statistics, is especially devastating to finances. For those whose earnings have evaporated, Social Security can be a lifeline.

But workers opt to retire, too -- almost half of the retirees in a Metlife Mature Market Institute survey of boomers at age 65 retired because they had reached retirement age and/or wanted to stop working, could afford to retire or had received a retirement incentive from their employer. The fortunate retiree has access to a defined benefit (DB) pension plan or saved enough to maintain pre-retirement living standards. Others are prepared to live on less and cut back on expenses to get out from under an untenable boss or stressful job situation or to do something new and fun.

Rich Lodish of Bethesda, Maryland was a planner; over the years, this boomer built up his assets and was able to retire voluntarily after a long career in education. Commitment to service led him to take a year off to help set up a charter school in a transition neighborhood in Oakland, CA. He wanted to continue serving in a different way and retired to volunteer with the inner city poor and homeless, working directly with people who need help the most. And he does that by assisting second graders with their reading, serving meals to the homeless and developing a long-range plan to set up a charter school in DC within the next few years.

Unlike some of his boomer counterparts, Rich is not working for pay in retirement. Nor has he yet begun collecting Social Security because he knows that the longer you wait up (up to age 70), the larger the monthly benefit and he wants to take advantage of that. He could afford to wait since he has a 401(k) and his wife has a traditional defined benefit pension.

Boomer educator Jack Williams of LaGrange, New York also planned for retirement, although not one quite as early as he ended up with. Jack retired by choice, albeit with a nudge from a heart attack. He says the health problem made it much easier to retire, but living below his means made it possible: He and his wife have always been frugal and have saved all their lives: "No fancy cars, no fancy home. We had some dollar amounts in mind where we would be comfortable and we made it." On their frugality diet, Jack managed to retire at 55 and put one son through an Ivy League College; he will soon be paying the college fees of a second son. Jack spends his time golfing, fishing, hunting, reading, working on the lawn and spending time with his high-school son, but he also drives one day a week for a dental lab: "There is no pressure and it adds a bit of spending money." Both Jack and his wife have DB plans.

Rich and Jack are among the lucky ones -- financially able to retire early and go on to activities that are meaningful to them. They saved, but those DB pensions undoubtedly make their retirements considerably more secure than they would be otherwise. Fewer retirees in the future will have access to such pensions, which is likely to keep younger boomers and those who follow working longer. But while some boomers may be postponing retirement, those that do are not going to work forever. They don't need to -- just a few years longer in the workforce can make up for much of the savings deficiency they face.

And they are likely to enjoy that retirement if their already retired peers are any indication. Boomers who have called it quits seem to have adjusted rather well to retirement -- seven in 10 in the Metlife study report liking retirement "a lot." Retired boomers in the most recent AARP boomer survey also find retirement to their liking; over half agree that it is better than they thought it would be. As economist James Schulz, Professor Emeritus at Brandeis University, observed 25 years ago, "the research evidence is also very clear that once retired, most older persons adapt quickly to their new life situation and indicate a high degree of satisfaction with their lives." That seems to be true today, even if it takes boomers a little longer to get there.

David Nathan of AARP Media Relations contributed reporting to this blog.

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