BUSI­NESS Plan­ning to work beyond 65

It’s eas­ier if you have a col­lege de­gree

Baltimore Sun Sunday - - FRONT PAGE -

NEW YORK — Nearly 1 in 5 Amer­i­cans 65 or older is still work­ing, the high­est per­cent­age in more than half a cen­tury. And the one who still is work­ing may be bet­ter off.

As more and more Amer­i­cans de­lay re­tire­ment, it is those with a col­lege de­gree who find it eas­i­est to keep work­ing past 65. Their lesse­d­u­cated peers, mean­while, are hav­ing a more dif­fi­cult time stay­ing in the work­force.

It is a cru­cial dis­tinc­tion be­cause fi­nan­cial ex­perts say both groups would ben­e­fit from work­ing an ex­tra year or more to im­prove their re­tire­ment se­cu­rity.

By stay­ing on the job, older Amer­i­cans can build sav­ings, which in too many cases are in­ad­e­quate. Plus, they can al­low big­ger So­cial Se­cu­rity ben­e­fits to ac­crue. And many older Amer­i­cans like the idea of stay­ing en­gaged by work­ing.

Less-ed­u­cated Amer­i­cans, though, aren’t al­ways able to fol­low this path, even though they tend to have less in re­tire­ment sav­ings. In­stead, many are forced to re­tire be­fore their mid-60s be­cause of poor health, the in­abil­ity to do jobs that re­quire a lot of phys­i­cal ac­tiv­ity or other rea­sons.

“If less-ed­u­cated peo­ple were re­tir­ing early and com­fort­able in their re­tire­ment years, good for them, but we know they aren’t,” said Matt Rut­ledge, re­search econ­o­mist at the Cen­ter for Re­tire­ment Re­search at Bos­ton Col­lege.

There is a widen­ing gap in re­tire­ment ages be­tween col­lege and high-school grad­u­ates, Rut­ledge says, one that is most ap­par­ent when look­ing at the av­er­age age of re­tire­ment for men. The in­creas­ing num­ber of women in the work­force in re­cent decades can skew the over­all fig­ures.

Men with col­lege de­grees are re­tir­ing at an av­er­age age of 65.7, ac­cord­ing to Rut­ledge’s cal­cu­la­tions based on gov­ern­ment data. That is nearly three years later than men with only high school de­grees, who are re­tir­ing at an av­er­age age of 62.8.

This di­vide be­tween highly and less-ed­u­cated Amer­i­cans be­gins long be­fore the golden years. Start­ing from their 20s, col­lege grad­u­ates are more likely to have jobs and to make more money than their less-ed­u­cated peers. Last year, for ex­am­ple, the typ­i­cal col­lege grad­u­ate earned nearly twothirds more than the typ­i­cal high school grad­u­ate, among all work­ers age 25 and older.

That is driv­ing a split in re­tire­ment sav­ings: The typ­i­cal house­holds run by some­one with a col­lege de­gree have $116,900 in a re­tire­ment ac­count, more than triple the $36,000 me­dian for house­holds run by some­one with only a high school diploma.

Health is a big fac­tor in de­cid­ing when to re­tire, Rut­ledge said. A stroke, heart at­tack or de­pres­sion could knock any­one into an ear­lier-thanex­pected re­tire­ment, but less-ed­u­cated Amer­i­cans tend to have worse health as a group than their high­ere­d­u­cated peers.

Less-ed­u­cated Amer­i­cans also are more likely to be in phys­i­cally de­mand­ing jobs, which are tougher to keep as age in­creases.

Among men age 50 and over, for ex­am­ple, 61 per­cent of work­ers with­out a col­lege de­gree have to move heavy loads (or peo­ple) as a reg­u­lar part of their job. That’s more than dou­ble the 23 per­cent rate of their col­lege-grad­u­ate peers, ac­cord­ing to re­searchers at Har­vard Uni­ver­sity, RAND Corp. and UCLA. Lower-ed­u­cated work­ers also are much more likely to have jobs that re­quire them to stand all the time, do repet­i­tive hand move­ments or be in tir­ing or painful po­si­tions.

“It’s much eas­ier to work sit­ting down at a com­puter at 65 than in a ware­house,” said Craig Copeland, se­nior re­search as­so­ciate with the Em­ployee Ben­e­fit Re­search In­sti­tute.

The fed­eral gov­ern­ment re­ports that 19.2 per­cent of every­one age 65 and older was em­ployed as of Septem­ber. That is tied for the high­est rate since 1962, and it is nearly dou­ble the level of the mid-1980s.

In­cen­tives are aligned for peo­ple to keep work­ing, even past their mid-60s.

When clients at wealth ad­viser Brouwer & Jana­chowski come to CEO Stephen Jana­chowski, he shows them how much in spend­ing money they will have each year in re­tire­ment, if they re­tire at 62. But then he shows how much larger that num­ber would be if they wait un­til 67, as much as 50 per­cent higher in some cases.

“We’re not even try­ing to talk them into it,” he said. “It’s more giv­ing them op­tions. Do you want to be able to take more trips, spend more time with your fam­ily, and is it worth it to you to work longer and have more of those things?”

Con­sider some­one who turns 66 this year and would get $1,000 monthly as their So­cial Se­cu­rity ben­e­fit. If that per­son had re­tired at 62, their monthly ben­e­fit would have been only $750. And for each year they de­lay get­ting ben­e­fits past 66, the size of that ben­e­fit will grow by 8 per­cent, un­til they reach age 70.

Gerry Gold­sholle just cel­e­brated his 78th birth­day, and he still is work­ing. He has de­grees from Wil­liam & Mary and Columbia Uni­ver­sity. Af­ter a roughly two-decade ca­reer with MetLife, he took an early-re­tire­ment of­fer when he was 50.

His first wife re­cently had died, and he was ready for a big change.

But af­ter three months of re­tire­ment, he was bored. “I missed the ac­tion and work­ing with smart peo­ple,” he said.

He started do­ing con­sult­ing work af­ter peo­ple from his days with MetLife reached out to him for help with projects. This gig grew into Ad­vice Co., which runs the le­gal ad­vice site FreeAd­vice.com. Gold­sholle is CEO of the com­pany and also trav­els ex­ten­sively.

Bev­erly Mor­ris, 58, wants to work but find­ing a job isn’t easy.

The Austin, Texas, res­i­dent used to have a good job fil­ing in­sur­ance claims, but she re­cently be­gan tak­ing care of her six grand­chil­dren af­ter her daugh­ter ran into trou­ble with drugs. That meant she couldn’t work nights any­more.

Mor­ris said dur­ing job in­ter­views she can tell her age and lack of a de­gree are hin­der­ing her, based on the ques­tions asked.

In the mean­time, she does work for de­liv­ery ser­vices such as GrubHub to make ends meet.

She did start col­lege but didn’t fin­ish it be­cause of the ap­peal of the work­ing life.

“I could get a de­cent job with­out a de­gree,” Mor­ris said. “It’s not like that now.”

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