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Census: Retirement age doesn't mean 65

  • Article by: David Phelps
  • Star Tribune
  • September 12, 2007 - 12:51 AM

When he turned 65 last spring, Jim Johnson, an executive vice president for Securian Financial Group, could have joined a handful of colleagues who chose to retire. Instead, he remained head of the group insurance division of the St. Paul-based company because 1) the company asked him to, and 2) he wanted to keep working.

New census figures show that Johnson's decision is not an isolated one. The Twin Cities metropolitan area ranks fourth in the nation in percentage of seniors working past age 65.

Of Twin Cities residents in their late 60s and early 70s, more than one in four, or 27.4 percent, are working, according to 2006 figures released Wednesday by the U.S. Census Bureau. Among the 20 largest metro areas, only Washington, D.C. (31.8 percent), Boston (28.1 percent) and Dallas-Fort Worth (27.9 percent) have higher workforce participation by seniors.

Some seniors continue working because they have no choice. They haven't saved enough for retirement, and Social Security doesn't provide enough for them to live on. But others, like Johnson, do it because they can. Their employers still want them, the jobs are not physically demanding and they're not ready for a steady diet of golf and fishing.

"I'm better at work than I am at golf," said Johnson, who has been at Securian for 44 years and heads a group that has grown at an 18 percent annual growth rate over the last 10 years. "I like what I do and I'm having fun."

The aging of the workforce is a national phenomenon. The national workplace average for the 65-to-74 age group was 23.2 percent in 2006, up nearly four percentage points from 19.6 percent in 2000. Minnesota's senior workforce figure also jumped nearly four percentage points last year, to 26.3 percent, from 22.7 percent in 2000.

Dr. Leon Satran, 72, said retirement "is not quite on my radar yet." Satran, who practices at Fairview's Children's Clinic on University Avenue in Minneapolis, has been a pediatrician since 1969.

"Medicine is more of a way of life than a job where you say 'I'll put in X number of years and retire when I'm 62 or 65,'" Satran said.

Minnesota State Demographer Tom Gillaspy said two distinct forces are causing seniors to work longer. One is necessity. "Many have not saved a tremendous amount for retirement," he said. The other is the lack of replacement workers, especially for executive positions and jobs that require years of training. "Some businesses will try to keep skilled workers in the workforce longer," Gillaspy said.

Johnson said he's from a "long-living family," and when Securian leaders approached him five years ago, at age 60, to see if he wanted to phase out of his position and ease into retirement, he said, "I'd rather go full steam or not at all." Johnson is the first Securian officer to stay beyond age 65.

Relatively new concept

Gillaspy said retirement is a relatively new concept to the American workforce and people are only starting to learn how to plan for it. Until the Great Depression and the creation of the Social Security Administration, people worked until they couldn't work any longer. The concept of the "golden years" existed only for the very rich.

That changed with the generation that grew up in the Depression, fought World War II, returned home and took private-industry jobs to raise families and buy homes.

"They were looking for that slot of time after their work life when they could enjoy themselves," Gillaspy said. "Before that, people didn't retire."

In the 1950s, Gillaspy said, workers retired, on average, when they were 66 or 67. By the time the next generation retired in the 1970s, the average age was down to 63. Today its in the 62 to 63 range.

"The average retirement age hasn't changed, but we're seeing more people staying in the workforce," Gillaspy said. "We anticipated this would start to happen between 2005 and 2010" when the leading edge of the baby boom generation started to hit retirement age while the size of high school graduating classes hit a peak for that generation.

"This will have an impact as fewer young people come into the workforce," he said.

John Fossum, a 67-year-old faculty member of the human resources department at the University of Minnesota's Carlson School of Management, said workers are staying healthier longer and expecting to live longer. So they work longer.

"Health is inversely related to retirement," Fossum said.

Many seniors take part-time jobs after retiring, to keep busy and earn money on the side. Others modify their schedules to keep their jobs, but at a reduced level of involvement.

"In Minnesota, there's a work ethic," said former Minnesota Attorney General Hubert Humphrey III, president of AARP in Minnesota. "People want to work. They may want flexibility, but they want to work."

Humphrey said employers are discovering that older workers can help the corporate bottom line by reducing the cost of training new workers.

Humphrey, who turned 65 last June and still teaches classes at the University of Minnesota, consults with his former full-time employer, Tunheim Partners, and volunteers with AARP.

"I plan to work full time until I'm at least 70," he said.

David Phelps • 612-673-7269

David Phelps • dphelps@startribune.com

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