Carol Ouhl thought she'd be retired by now.

But for the 61-year-old regulations analyst at Securian Financial Group Inc. in St. Paul, her financial reality isn't what she'd expected.

Her investments hadn't quite recovered from the dot-com bust before the stock market took its current dive. Home equity? Her Cottage Grove house is worth about $20,000 less than when she bought it four years ago.

Her budget? Blown out by the basics: utilities, gasoline and groceries.

Numbers that should be going up are dropping, and numbers that should be going down are climbing. So Ouhl now sees at least five more years of work in her future.

"It's scary, because at this point you expect to be well set," she said. "And through no errors on my part, I'm not."

That math is forcing many other older workers to make the same call Ouhl did: postpone retirement. U.S. labor statistics show that 16 percent of Americans over age 65 were working last year, compared with about 11 percent two decades ago. An AARP survey in May found that today's difficult economic times, specifically, have up to one-fourth of respondents 45 and older planning to work longer. Up to one-third of them put the blame on falling home values and shrinking investments.

In the Twin Cities, the median home price dropped almost 11 percent in a year to $208,000, according to the industry's July report.

Meanwhile, nest eggs also are shrinking. Nationwide, the average American worker's 401(k) balance dropped to $64,000, down 7.5 percent in a year, according to an August report by Fidelity Investments, which manages the accounts for 11.5 million participants. It would have been worse -- closer to the market's average 22 percent drop -- except that workers increased their average contributions by 7 percent, to $3,500 through the first half of this year, the Fidelity report noted.

At the same time, energy costs went up 30 percent, and gasoline prices were up 14.4 percent, federal figures show.

Concern over those numbers is now piling onto seniors' other long-standing worry -- how they will pay their rising health care costs, said Michelle Kimball, director of Minnesota AARP. She has been holding town-hall meetings with thousands of older Minnesotans.

"Financial security gets wrapped into that now," Kimball said. "There's also growing concern just about paying for everyday items, like food and energy. And people's 401(k)s are not what they were two years ago, so they want to keep working and putting money into them."

Collecting dust

Linda Nyseth, a retirement plan administrator also at Securian, wants to retire debt-free. With a mortgage still years away from being paid off, and the slump in her 401(k), she figures she'll be working until she's 70, another nine years. Nyseth, of Inver Grove Heights, has to plan her retirement finances around two family legacies: longevity and high cholesterol.

"My family on my father's side lived into their 100s, so I'm preparing for 100," she said. "But I'm on four medications now, which I will be for the rest of my life, so health care is a big economic factor for me."

In Ramsey, Pam Upton is postponing her retirement indefinitely. She blames her flagging 401(k) -- "which is collecting dust and little else" -- and a housing market that's making it impossible for her and her already-retired husband, Stephen, to hold onto their dream to sell their house and buy one in Sarasota, Fla. "Like a lot of people, we have a lot of our assets tied up in a house that is bigger than we need but we're unable to sell," she said. At 55, she intended to work at least another 10 years, but unless the stock market turns around soon, she said, "I can't imagine ever being able to fully retire."

Brains over brawn

It's an open question how many employers will want to hire, or retain, retirement-age workers, several studies show. Securian is one of the most accommodating and a frequent AARP award winner. In a survey of Fortune 1000 companies last year, about two-thirds said they worry about losing the skills of the exiting baby boomers, but fewer than one-third were considering the phased retirement programs that many older workers request.

And a report last month by the Urban Institute was only semi-promising: Jobs increasingly require brains over brawn, a good omen for older workers, but employers overall continue to consider older workers less productive, less flexible and less willing to learn new things.

Bob Geyen of Shakopee is a retired educator who turned one piece of his old job -- driver education -- into part-time work. Geyen, 63 and retired for seven years, is taking on more students than he'd intended, though. And he cited a familiar list of new realities: a house still mortgaged -- the equity used to put three children through college -- that in recent years dropped about 20 percent in value while the taxes on it went up 20 percent; a retirement account that hadn't regained lost ground from the bust before the current downturn came along; high health insurance premiums, and energy prices.

Geyen and his wife, Rosie, recently heard a new term they hope will never apply to them: "negative inheritance."

"That means caring for mom and dad may hurt the children's finances," he said. "I was always going to have as much fun as I could, but I never thought that we would be a burden to them."

Beyond that, it is their various dreams of retirement that keep many seniors working and saving. Nyseth plans to move and build a house of straw bales -- an earth-friendly, energy-efficient dwelling that intrigues her. And Ouhl intends to continue a heavy schedule of voluntary therapy work that she does with her horse and four dogs at hospitals and nursing homes.

It's a pricey hobby, and getting pricier as the cost of gasoline and other supplies keeps climbing.

"If I didn't have the animals I could retire five years earlier," Ouhl said. "But if I didn't have the animals I wouldn't have much of a life, so what's the point?"

H.J. Cummins • 612-673-4671