AP: Kansans aren't putting off retirement

2/9/2013

TOPEKA (AP) — The common wisdom is that Americans are putting off retirement and may never get to stop working.

TOPEKA (AP) — The common wisdom is that Americans are putting off retirement and may never get to stop working.

At least in Kansas, the common wisdom seems to be wrong.

Kansans older than 55 were more likely to have a job, or be looking for one, in the depths of the Great Recession, but in the last year many have voluntarily left work, Kansas Department of Labor senior labor economist Tyler Tenbrink said.

A nationwide 2012 Gallup poll found that the average age when currently working Americans expected to retire was 67. That is a full decade later than in 1991, when the average person retired at age 57, and substantially later than the current average retirement age of 60.

Part of the reason for the delay could be the pessimism most people expressed about their finances. Only 38 percent of people surveyed in 2012 thought they would have enough money for retirement, down from 59 percent in 2004. About 72 percent of those who are retired now said they have enough to live comfortably.

Gallup attributed part of the decline in optimism about retirement to the losses many people's stock portfolios and housing values experienced during the Great Recession, which would suggest people will become more optimistic as the economy recovers. Ongoing debates about the future of Social Security and Medicare, however, may cause people to continue delaying retirement and doubting their preparedness over the long term, the poll's authors suggested.

In Kansas, however, the second scenario doesn't seem to be playing out, at least not yet.

People older than 55 made up 17.8 percent of the Kansas labor force in the second quarter of 2006, when they were 29.8 percent of the population. The labor force is made up of those who have a job or are actively seeking one. A person could be counted as no longer in the labor force because he or she left work to take care of family responsibilities, got discouraged and gave up looking for work, or decided to retire, among other reasons, Tenbrink said.

By the second quarter of 2011, those older than 55 made up 19.5 percent of the Kansas labor force — but had risen to 33.1 percent of the population. So while the number of older Kansans in the labor force had risen by 9 percent, their share of the population had risen by 11 percent, Tenbrink said — meaning if you are seeing more gray hair at work, the explanation is that the population as a whole is older, not that people are necessarily putting off retirement.

Jim Brewer falls into the category of older workers, but he chose to go back to work after retiring from his 30-year career at Burlington Northern Santa Fe railroad.

Brewer, 67, said he retired from the BNSF mailroom about seven years ago, and decided to take a part-time job reorganizing the St. Francis Health Center mailroom to keep busy and to supplement his pension.

"I was just going to do 10 hours (per week) or something like that because I already do a lot of charity work," he said.

It ended up turning into a larger job than he expected, and he now works 20 to 30 hours in an average week. His wife, who previously worked for the state and Topeka Country Club, also works about 10 hours per week processing statistics for St. Francis, he said.

Brewer said he knows some people are working longer because of the economy, but most of the retirees he is personally acquainted with spend their time volunteering or traveling.

"I don't know what the norm is as far as retirement," he said.

Brewer said he likes being able to help people he encounters in the hospital, and the health insurance he gets from working there frees up more of their retirement income for other expenses.

"As long as I'm healthy, I'm going to work here for a while," he said.

Health care is one of the larger employment sectors for workers older than 55, as is public administration. Education, however, has the largest percentage of older workers, with people older than 55 making up 29.6 percent of all employees, Tenbrink said.

"Some industries are kind of more accommodating to older workers," he said. "Those (older people) who are in the labor force now aren't having trouble finding work."

Since there are many reasons why a person could no longer be in the labor force, assessing people's decisions on retirement requires looking at the labor market survey, where people who don't have a job are asked more in-depth questions about why they aren't working, Tenbrink said.

The number of people older than 55 who answered that they weren't working because they didn't want a job rose from 2005 through the second quarter of 2007, then reversed as the economy soured. Fewer people said they didn't want a job through the end of 2009, when the trend reversed again and more older Kansans indicated they weren't interested in working.

Tenbrink attributed the decline in the number of people who didn't want to work during the recession to financial insecurity, as nonworking older people started looking for work when their partners were laid off or feared pay cuts and job losses. There could be many reasons people decided to leave work again in 2010, but one factor could be that the financial markets stabilized and people's 401K plans began to recover their value, he said, as well as the fact that not working is a more viable option for older people than for younger people who have to support a family.

The increase in older people deciding not to work probably accounted for some of the weakness in the labor force as the nation struggled out of the recession, Tenbrink said.

"It's difficult for the labor force to grow when older workers are leaving," he said.

That has implications for younger workers looking to advance their careers and those now entering the labor force. The labor force increased most years from the 1960s on as women entered the working world and the baby boomers came of age, Tenbrink said — a trend that is expect to reverse in the coming years as more of those workers retire and smaller generational cohorts enter the work force. That could give workers in high-demand fields an added advantage as employers look to replace those who are retiring.

"This is going to be kind of a shift," he said.

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