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You Can't Delay Retirement If You Don't Have a Job

Rob Reutemen, |Special to CNBC.com
Monday, 26 Sep 2011 | 9:39 AM ET

It's become fashionable to say that longer life spans mean average Americans work well into into their 60s and possibly their 70s—what was once considered the early retirement years. The problem is, few prospects await most people who need or want to stay in the workforce.

Juanmonino | E+ | Getty Images

“The harsh truth is that most employers have no great enthusiasm for gray hair,” said Alicia Munnell, the director of the Center for Retirement Research at Boston College. “They prefer younger workers.”

Increased hiring in the health-care sector will address some needs, but hardly all. For most retirees looking to work longer, the landscape is bleak.

The number of unemployed workers aged 65 or over has more than doubled since 2007, to 6.7 percent from 3.3 percent, according to the Bureau of Labor Statistics. For ages 55 to 64, the jobless rate has also more than doubled in the same time period to 7.1 percent from 3.1 percent.

The data suggest two very different forces are at work: One is that older workers are losing their jobs at a faster pace than younger ones; the other is that retired workers—some of whom left posts willingly years ago—have been forced to re-enter the workforce and are looking for jobs.

“There are not a lot of jobs out there,” says Munnell.

At the same time, older workers are feeling more pressure to stay in the workforce. The list of reasons is long: changes to the structure of Social Security benefits (the payout is much better if you wait to take it until age 70 rathar than at age 65); the move away from defined pension plans to 401(k) plans; the decline of retiree health insurance; and a general lack of sufficient savings and retirement funds following the Great Recession.

More than three in five U.S. workers in their 50s and 60s plan on working past age 65, according to a2011 study from the nonprofit Transamerica Center for Retirement Studies. Almost half say they need the money or health benefits.

In 1985, roughly one in 10 of those 65 and older were in the workforce, says Jean C. Setzfand, a vice president at the American Association of Retired Persons (AARP).

“The percentage has increased virtually every year since then, and now stands at well over one in six, more than 17 percent," she says.

Options and Odds

Of course, some older workers—especially white-collar, professional workers—want to remain employed because they are healthy enough and simply enjoy the work.

For most older Americans, that means “staying with your main job a few years longer,” says David Weir, director of the University of Michigan’s Health and Retirement Study. “The jobs people will have are the jobs they have now. The economy is not going to invent a whole new set of jobs.”

Older people with jobs need to let their employers know they want to work longer, says Munnell of Boston College.

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Your chances of achieving that are better in the growth fields of education and health care. Having the right skills also helps.

Health care is a sector that people can move into without much trouble, with a little retooling, say labor experts and industry players. If your career was in banking or insurance, for instance, hospitals and other health-care facilities have large financial-service groups involved in billing and compliance.

"If you’re an older worker with experience in information technology, the door also is wide open. Health-care reform is putting a heavy emphasis on electronic record keeping," says Vic Buzachero, vice president of human resources forScripps Health, which uses senior placement agencies to target mature workers and retirees. “A lot of money moves through the health-care system."

“The health-care industry is more favorable for older workers seeking employment,” adds AARP’s Setzfand.

Setzfand and Scripps Health's Buzachero are among those who see demographic changes driving growth, and thus jobs.

“The demand for services is increasing as baby boomers begin to consume more health-care services," says Setzland.

The Health Care Act of 2010will also bring millions of formerly uninsured people into the system.

Leaders, Trendsetters?

Although some companies already appreciate the virtues of older workers—even target them for employment—it is still the exception rather than the rule.

Cornelia Gamlem, president of human-resources consulting firm GEMS Group, says she’s starting to see more companies realize the value of senior workers.

“Mature workers bring a wealth of opportunity in terms of the knowledge base they bring to the table,” she says.

Gamlem cites CVS/Caremark and its "Snowbird Program,” which lets older employees transfer to a different pharmacy location on a seasonal basis, allowing the company to manage the swell of business in warm climate stores during the winter months.

“Mature workers make good business sense for us,” says Michael Ferdinandi, vice president of CVS.

Scripps Health, which encourages people to work longer, is profiting from the current economic downtown.

“Fortunately for us, the recessionhas pulled people back into the workforce who had retired," says Buzahero of Scripps Health.

That, too, appears to be something of an exception at this point. Many companies still are not hiring, including sectors traditionally hospitable to seniors, such as retail, where high and rapid turnover is an operational problem.

"It’s really hard for older people to find work under the best of circumstances," says Boston College's Murrell. "We don’t expect normalcy for a while."

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