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Working Past Retirement Age

Benefits and Challenges Emotional and physical health for workers, creativity and tax revenue for society

Kent Burtner is the Communications Officer for Washington County Department of Health and Human Services.

As Baby-Boomers move toward retirement age, many are rethinking when and whether to retire at all.

It's a crucial decision that faces all workers. There are advantages for individuals and society if people delay retirement and challenges that still need to be faced.

Having a continuing income is a decided advantage of postponing retirement, whether you work in the same field as before retirement age or change roles all together.

Working longer increases lifetime earnings, Social Security payments (if you defer taking your Social Security), employer-sponsored pension credits and shortens the period over which your lifetime savings must be spread.

"A lot of people haven't saved properly for retirement and are going back to work for financial reasons," noted Ed Redfern Jr., AARP New York associate state director. "But people also are living longer, are healthier longer, want to stay engaged, want to be useful and involved in their community."

On average, working an additional year increases annual retirement income about 9 percent, according to University of Pennsylvania Professor of Economics Richard W. Johnson.

And working an additional five years boosts annual retirement income about 56 percent. The impact of working longer is even larger for people at the lower end of the income brackets.

Working longer may also improve emotional well-being and physical health. Because work is so crucial to many workers' personal identities, retirement can lead to a period of disorientation and a partial loss of identity. People who retire abruptly, or are forced into retirement by employer restructuring, are most strongly effected.

Being employed promotes involvement in a community of fellow workers and networks of social support. These are important parts of life to attend to when people reduce their work hours or quit working all together.

For many people, continuing to work means continuing to remain physically active. "Staying active" by keeping up a work routine helps promote physical health.

Society will benefit from Boomers continuing to work because they will continue to pay taxes. The General Accounting Office (GAO) estimates that by 2045, the government would raise $180 billion (in 2006 dollars) if all workers delayed retirement by one year. If retirement was delayed by 5 years, additional tax revenue would exceed $1 trillion, more than 150 percent of the Social Security debt.

Because there are fewer workers coming up behind the Boomers, the needs for the skills and expertise of the current crop of workers will be greater than ever, making it beneficial for employers to find ways to keep older works on longer.

It might require businesses to use non-traditional recruiting techniques and an offer of the right mix of flexible hours and adaptive job designs, benefits and incentives to attract and keep older workers, such as tuition assistance, time off for elder care and employee discounts.

Current attitudes of employers toward older workers are mixed, according to the GAO. Many employers value older workers' loyalty, work ethic, reliability and experience and they view older white-collar workers as more productive than younger white-collar workers.

But employers are also concerned that older workers may be less creative, less willing to take initiative, less willing to learn new things, and less able to perform physically demanding jobs. And they could be more expensive. Older workers are paid more. In some cases, the relationship of age to wage reflects older "seniority" arrangements instead of the relationship of age and experience to productivity.

Health insurance costs to employers increase with age. But the GAO found that most employers report that older workers' high productivity offsets higher costs.

There are plenty of Web resources out there for older workers. Among them:

• AARP has a set of Web pages devoted to older workers, at aarp.org/money/careers

• The U.S. Department of Labor offers the Senior Community Service Employment Program, which helps older workers re-enter the work force. Visit their site at doleta.gov/seniors

• The Department of Labor page of information about older women workers at dol.gov/wb/factsheets/Qf-olderworkers55.htm

• Finally, the U.S. Bureau of the Census offers a publication called Older Workers, Retirement and Pensions at census.gov/ipc/www/ipc95_2.html, which details transitioning from being an older worker to retirement.

How long you decide to remain in the work force, and whether full or part time is an important choice. Job satisfaction, your sense of value as a worker, your decisions about community involvement, and your economic situation all are considerations. One thing is for certain: we are certainly going to see older workers in the work force as the Boomers continue to age.