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Rewire, don’t retire

Jan Fitzsimmons had the luxury of being able to retire at 47 after 22 years of service. But retirement turned out to be not so luxurious. Now 52 and renting an Arlington, Virgina, townhouse, she is looking for part-time work because life has become too expensive. Her grocery bills have gone up. So have her telephone and cable bills. Health insurance, too, is getting costlier.

“Oh yeah, I’m feeling the pinch,” she said. “I’m seeing all my investments go down and the cost of living go up.”

Many retirees and soon-to-be retirees are reckoning with a new reality: it’s just too difficult to live on a fixed income when the price of everything is edging up. Meanwhile, more and more employers are moving away from defined benefit plans, such as pensions, in which they guarantee workers a certain amount of money for retirement.

As a result, Americans are increasingly postponing retirement or getting part-time or even full-time work in other fields after retiring.

“Clearly there’s a lot of angst around the notion that the economy is reducing people’s retirement funds to less than what they anticipated, and therefore, the need to postpone retirement is more imminent than before,” said Deborah Russell, director of workforce issues at AARP, an organisation that represents the interests of people 50 and over.

The percentage of older people in the workforce has been rising steadily since the late 1990s after hitting historic lows through the 1980s and early 1990s, according to the US Bureau of Labor Statistics, which is expecting that trend to accelerate. By 2016, the bureau predicts that the number of workers aged 65 and over will soar by more than 80 per cent, accounting for 6.1 per cent of the total labour force. In 2006, they made up just 3.6 per cent of active workers.

Older workers are increasingly more comfortable with the notion that traditional retirement might not be in store for them, the AARP has found. According to a survey released by the organisation in September, seven in 10 older workers expect to be employed in retirement, mainly part-time. Sixty-four per cent of those workers cited current financial needs, such as healthcare costs, as the primary reason for working, while another 11 per cent said future financial security is what’s driving them. Another AARP survey released in April showed that 27 per cent of older workers had postponed plans to retire because of the economic downturn.

“If we had $2-a-gallon gas and there were no foreclosures and life was good, I think people would probably favour traditional retirement,” said Bob Skladany, a human resources consultant and vice-president of research and certification for “I think we’ve hit a turning point. Expenses won’t change. People don’t hope to die sooner, so people will work past retirement.”

Although many employers are scaling back on hiring because of the anaemic economy, others in thriving fields such as healthcare are recognising that a rash of baby boomers retiring could result in a brain drain. The prospect of holding on to their trained workforce is appealing, so much so that employers don’t mind the potentially high healthcare costs that come with an ageing population.

“They’re dependable, they’re committed, they bring a stabilisation to our environment,” said R. Virginia Smith, Wal-Mart’s senior manager of diversity relations for mature markets. She said the company employs more than 355,000 workers over 50, and even as old as 103, in its stores. The company has about 1.2 million employees.

There are now so many retirees expecting to work longer that a new term has been coined for what they are doing: they are “rewiring”, not retiring.

Businesses and local governments are actively urging older workers to rewire. Websites such as have sprung up. The jobs range from retail to those requiring advanced skills and education levels. The website, for instance, recruits mature workers trained to be engineers, scientists and product developers.

Many state and local offices for the ageing and non-profit service organisations now hold job fairs for older workers. Operation A.B.L.E. (ability based on long eExperience) of Greater Boston organised mature worker career fairs for jobseekers 45 and older. Meanwhile, many community colleges, such as Central Florida Community College, offer training programmes for older workers.

Recognising the need to match older workers with employers, AARP created a national employer team of more than two dozen employers who actively court mature workers. Last year, the Internal Revenue Service, the US Small Business Administration Office of Disaster Assistance and the Peace Corps became the first federal agencies to join the team. In August, the organisation partnered with to expand its online offerings of job search advice.

Often, Skladany said, older workers are surprised at how the process of finding a job has changed so much in recent years. For one thing, so much is done electronically. Skladany often comes across job seekers who don’t even have email accounts, much less know how to use the Internet. He advises them to get a computer with a high-speed Internet connection, learn how to use a search engine such as Google, and get an email address and a cellphone.

Last month at its convention in Washington, AARP held its second annual job fair to guide older workers through the process. Organisers said attendance by both jobseekers and employers was much higher than last year.

Fitzsimmons, the Arlington resident, is not only watching her spending. She’s cutting back.

Although she retired from the Navy in 2003, she continued to work on a contract in the defence industry. She gave that up in January and has since been living off her military pension, IRA and other investments.

The lack of extra income from the contract has been noticeable, especially in recent weeks as the economy has deteriorated. She has suspended shopping. She hardly dines out. Her car could use new tyres, but she’s holding off for now.

“I didn’t notice those things as much as I do now that I don’t have an extra paycheck,” she said. “I’m nervous. I’m very, very nervous.”

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