No Rest for the Weary

Many Forced to Retire Early
Despite the increasing financial pressure to stay employed, nearly half of U.S. workers leave before they plan to, a survey indicates.
By Jonathan Peterson, Times Staff Writer
May 15, 2006

WASHINGTON — American workers, who face growing financial pressure to stay in the workforce, are far more likely to be forced into an early retirement than many expect, according to a study being released today.

Four out of 10 retired workers left their jobs sooner than they had planned, usually because of health problems or the loss of employment, according to the report by McKinsey & Co., which was based on a national survey of 3,086 people.

The survey also found that 45% of people who are currently employed planned to keep working past age 65. But among the retirees polled, only 13% said they had done so.

The findings raise fresh concerns about Americans' ability to afford a comfortable retirement. With more companies abandoning or freezing their pensions, many people say they plan to work longer to build up their nest eggs.

The reality "is quite sobering," said David Hunt, a senior partner at McKinsey. "Our research clearly shows that many people — and more than a few public policymakers — who are betting on simply working longer to compensate for a lack of current savings are setting themselves up for a rude awakening and a significantly poorer standard of living in retirement than they had expected."

Ask Rolf Marsh. The computer programmer was 60 when he got a surprise tap on the shoulder from IBM Corp.

Marsh had planned to work five more years to qualify for higher pension payments, then retire to enjoy a new phase of life, including visits to friends in Britain and other travels with his wife.

"I guess I was blind to the handwriting on the wall," said Marsh, who lives near Spokane, Wash. "I didn't think it was going to happen."

Now 63, Marsh has been frustrated in his attempts to prolong his career. "I looked for work when I first got out — basically, there's very little up here in Spokane — and the jobs I applied for I didn't get. My feeling was it was because of age."

Marsh estimates that his pension is less than half what it would have been had he remained longer in the job. To boost his income, he signed up for Social Security earlier than planned, further scaling down his retirement pay. Eventually, he and his wife took in an elderly boarder for whom his wife cares to make ends meet. "It's been difficult," he said.

The McKinsey survey included retirees, for which it had a 3.2-percentage-point margin of error, and people who are not retired, for which the margin of error was 2.4 percentage points. It was conducted in March and April among people 40 to 75 years old.

Among those who retired earlier than they expected, 47% cited health reasons and 44% pointed to job loss. The remaining 9% said they had to care for an ailing family member.

Workers with less than $50,000 in assets were most likely to be forced out of their careers because of health problems. Those who had more than $1 million pointed to job loss as the greatest reason for retiring.

I don't know about you, but I'll be working until I'm toes up. Don't have a choice.