Workers retire later as 401(k)s dwindle. Greenwich Time/Stamford Advocate
By Michael C. Juliano
Staff Writer
Kevin McIntosh, a 63-year-old information technology aide for New Canaan Public Schools who spent 30 years in the advertising business, planned to retire at age 65 to his home in Florida to enjoy the sun, play tennis and do some traveling. That was his five-year plan until his retirement nest egg lost 50 percent of its value and the stock market dropped by just as much since the fall of 2007.
David Mezzapelle, JobsOver50 Founder & Director of Marketing. Staff photo by Monique Comfort.
"I was going to retire two years from now, but now I'm back at year one," said McIntosh, who has been saving for retirement for 20 years. "My 401 has become a 101. I worked hard for that money and saved it, but thanks to greedy bankers, I've lost it." McIntosh said he still has much to be grateful for despite the loss. "I have an adoring wife, kids and grandkids," he said.
Irene, a 68-year-old resident of Norwalk who declined to give her last name, was laid off after 26 years from a job as a credit collections manager for a Norwalk company. She said she enjoys working, but now she must find another job because she and her husband have lost 20 percent of their retirement funds since September in the falling stock market.
"We plan on living another 25 to 30 years, and we feel we don't have enough for retirement without living in another area," she said, adding that they want to stay in Norwalk to be near their children, grandchildren and her mother. "I'm kind of locked in."
McIntosh and Irene are among a growing number of people who are 65 or older and see a need to work beyond retirement age after losing big in the declining stock market, said Jennifer Millea, a spokeswoman for AARP Connecticut. "We're hearing from our members that there's a definite increase, that they're going to have to stay in the work force longer due to market conditions and because their 401(k)s have taken such a hit," she said.
According to an AARP survey completed in January, 57 percent of 1,100 adults age 45 and older who lost money in their investments over the past year expect to delay retirement as a result. A May 2008 survey of 1,000 such people found a third of workers age 55 to 64 said they postponed plans to retire because of shrinking portfolios, as did 19 percent of people age 45 to 54.
In an effort to reduce those figures, AARP is developing programs to help its members save for retirement and is backing a state proposal that would create retirement accounts at small companies with no retirement plans, Millea said. "America has one of the lowest percentages of retirement savers in the world -- less than 1 percent," she said, adding that many Americans depend upon Social Security for retirement. "It was never intended to become a sole source of income, but for many people it has."
Stamford resident Shirley Weiss, a former associate producer for the American Broadcasting Co. for 30 years, planned to retire next year. But at age 59, she depends on her part-time job as a substitute teacher for Stamford Public Schools for much-needed income. "I just started this year because, aside from being recently divorced, what's in the bank has dwindled by 35 (percent) to 40 percent," she said. "It kind of takes the wind out of you."
To help would-be retirees get back into the work force, AARP has partnered with Monster.com and other Internet-based job-search firms in creating a whole section on its Web site devoted to helping workers older than 50 find jobs, Millea said.
Another survey by JobsOver50.com, a Web site operated by Stamford-based GoliathJobs Inc., found that 84 percent of today's 50-plus population want to continue working past 65. "When you combine the issues on Wall Street, along with real estate softening, many people are worried that their retirement will not be as rosy as they envisioned," said David Mezzapelle, GoliathJobs' founder and director of marketing.
According to a 2008 survey by MetLife Mature Market Institute in Westport, 13 percent of almost 1,100 baby boomers born in 1946 say they have enough money for retirement. The lack of funds can be attributed to a bad market, poor investment choices and longevity, said Anthony Truino, a certified financial planner with Barnum Financial Group, an office of MetLife.
Others, such as Rose Schuler, 72, an assembler for Sikorsky Aircraft in Stratford for 29 years, are working past 65 because health care costs have risen so drastically. "Health care is really too expensive for my husband and me on the outside," she said. "I'm putting away whatever I can so that when I retire, I can pay for some sort of health care."
Most retirees need 70 percent to 80 percent of their gross income, which would include money put toward retirement and a mortgage, as a general rule. But each individual should determine how much will be needed to retire comfortably and then plan on how to get there, Truino said. "You have to think back and then figure out what that number is," he said.
Suzanne Peters, 58, of Stamford, wanted to retire at age 60, but instead is looking for work after losing 70 percent of her retirement funds in the stock market. "I hoped to spend more time with my family, work part time and do some volunteering," said Peters, who worked in financial services for nearly 30 years. "There's a lot of people in my generation who want to continue working, but you'd also like the flexibility to do other things."
Copyright © 2009 Southern Connecticut Newspapers, Inc. Used with permission.