By Jocelyn Green
Ken Baxter retired
from the John Deere facility in Waterloo, Iowa, at customary retirement age.
But when given the opportunity to work again as an electronics engineer for
Distek Integration, Inc., Baxter, now 70, jumped at it.
seniors who go back to work, financial incentives didn’t factor into Baxter’s
“That chance to
work with electronics again really motivated me to do this,” he says. “I want
to keep my mind active. Plus, my ‘honey-do list’ was getting longer and longer
view of retirement has been that it’s a time to sit back and relax. But some of
today’s seniors, who might live another 30 years, aren’t in the mood.
“I don’t like to
sit around, so that’s not an attractive option for me,” Baxter says. “I’m still
enjoying working very much.”
In jumping off the
retirement bandwagon, Ron Eberhardt joined a new movement of retirement-age
workers who remain in the workforce, rewired to fit elsewhere. The 2006
American Community Survey shows the share of people aged 65-74 still working
jumped from one in five in 2000 to one in four in 2006.
Those who retired
also are finding their way back to the workforce. Eberhardt, 61, is working
with his wife, Betsy, in a new career in Grand Rapids, Mich., where they
purchased two franchises with a national junk removal service.
Eberhardt says the
income is the primary reason to keep working for him. “Working for a nonprofit
the last 20 years did not help build my retirement nest egg — and neither
did helping our children with their college expenses,” he says.
There are other
reasons people continue working into their late 60s, but lack of money is the
most compelling. Two out of three baby boomers have less than $50,000 in the
“If you are 20 to
30 years of age and looking at the retirement of your parents, you have to be
gasping in fear,” says Moving Up to Millions author Kathleen Connell, a
financial adviser in Washington, D.C. “You are likely to live longer than your
parents, have reduced pensions, rapidly escalating health-care costs, limited
savings, and, most probably, no chance of an inheritance, as your parents will
live longer than planned. Your obligation is to amass savings as early as
priority one,” says Kyle Dana, senior vice president of AG Financial Solutions
in Springfield, Mo. “Learn how to save, even if it’s just $10 to $15 a month.
The compounding power makes the biggest difference.”
tithing 10 percent, saving 10 percent, and living on 80 percent — and
trying to increase the percent saved yearly.
of a 401(k) plan puts compounding power to work even more.
“For any worker,
young or old, it is critical to set aside money in a 401(k) plan,” says
financial planner Mark Mills, co-author of Boomers! Funding Your Future in an
Age of Uncertainty. “The smart move is to save at least as much as the company
will match. Saving any less means turning down free money.”
For example, if a
22-year-old contributes $2,000 a year to her 401(k) and her employer matches
that with another $1,000, she would accumulate $988,000 by age 65, assuming her
account earns an average of 8 percent a year.
Someone who starts
investing at age 35 would end up with just $340,000 at age 65, (assuming the
same interest rate). By starting 13 years earlier and setting aside an extra
$26,000, the early saver ends up with $648,000 more than the worker who waited
until age 35 to get started.
“Money earning 8
percent a year doubles in value in nine years,” says Mills, of Brooklyn, N.Y. “By
starting early you get that extra doubling, or more, compared to someone
waiting until their mid-30s. And that extra doubling is the big one, the one
that turns a modest retirement account into a small fortune.”
devised a life savings calculator (www.lifecalculator.net) whereby a person can
quickly learn what life savings would yield by plugging in variables such as
age and amount per month.
According to Dana,
the average individual doesn’t start saving for retirement until the age of 45.
Other pressures, such as financing children’s college education and paying off
a mortgage, often take priority, albeit misplaced.
“A child can
qualify for financial aid when applying for college,” Dana says. “However, parents
cannot apply for loans to finance their retirement. I recommend that parents
set up a matching plan whereby any funds their kids save for school would be
matched by the parents. This helps the child save but more importantly, it
helps them understand the value.”
“Just as we tithe,
we need to be diligent in setting aside some savings,” says Dave Weston,
director of Assemblies of God Senior Adult Ministries. “There’s never an easy
time to start setting money aside, you just have to do it, even if it’s just a
small amount. The discipline of setting aside is invaluable.”
for her book Don’t Retire, Rewire!, co-author Jeri Sedlar of New York City
found there are 85 reasons people continue working (or volunteering). These
motivators include spiritual fulfillment, sense of belonging, accomplishment,
making a difference, and recognition.
“Most say that
they want to continue to be engaged in meaningful activities,” Sedlar says. “They
want to work for a variety of financial, social, physical and emotional
reasons. Retirement as we know it today just might morph into something else.
“I’d rather have
people think of saving for the future so they have financial freedom and
security. If they have resources, they can look at new options that lead to a
more fulfilling life.”
Many older people
are looking to the church as a way to be fulfilled through volunteering.
“The church is
wise to look at these people and recognize their gifts and talents, all they
have to offer,” Weston says. “Young people still working are not able to
contribute in a way a retired person could.”
financial planner Joe Sturniolo offers workshops to help people find a
meaningful focus for the remainder of their lives.
“God has directed
us to be active,” he says. “I don’t believe that just because you reach a
certain age that all of a sudden, God says, ‘Time’s up, you don’t have to do
anything.’ He’s put you on earth to continue to serve.”
It’s an idea that
resonates with Eberhardt. “There are times that I say I look forward to
retiring at 70,” he says. “But if God blesses me with good health why wouldn’t
I look for ways to serve Him?”
JOCELYN GREEN is a
frequent news contributor and lives in Cedar Falls, Iowa.
comments to firstname.lastname@example.org.