Pay dirt: No rest just yet

Judi Szyszka always figured that when she turned 65, she'd punch her state of Minnesota time card for the last time. Then again, with a slowing economy, a depressed housing market and a nest egg that's declining in value, maybe not. "I don't feel as comfortable as I would have felt, say, if I was ready to retire at this age five years ago," said Szyszka, now 66.

She has plenty of company.

The number of American workers very confident they will have enough money to live comfortably during retirement has decreased from 27 percent to 18 percent, according to the 2008 Retirement Confidence Survey. That's the biggest one-year drop in the 18-year history of the survey, conducted by the Employee Benefit Research Institute.

Mirroring the survey findings, Szyszka's big fears are:

• Health care: "I don't want to put myself into the position of not being able to do anything but pay for medical costs."

• Finding a part-time job in this economy: "I wouldn't want to take a job away from somebody else who really needs it."

• Selling her Eagan condo: "with the economy the way it is now, I would lose money."

So, like many near-retirees, Szyszka has decided to keep working. The proportion of workers between 55 and 64 years of age rose 1.5 percentage points in February, according to the Department of Labor. The number of people age 65 and older still in the workforce is up, too.

In Minnesota, the 55-to-64 age group is the only one that hasn't experienced labor force participation declines in recent years, said Steven Hine, research director for the Labor Market Information Office.

It could be that the days of a 30-year vacation are over. A new survey from Scottrade found that 31 percent of Generation X believe they will never be able to fully retire. As a member of that generation, my question is, does any of us ever want to?

John Nelson, co-author of "What Color is Your Parachute? for Retirement Planning," suggests that people pondering retirement consider "the possibility of working for meaning and money." Instead of retiring and never working another day for another dollar, find a part-time gig, whether seasonal or on a per-project basis, to stay involved and to put less pressure on your retirement portfolio.

In a bear market, your savings will thank you. According to a scenario run for me by Thrivent Financial for Lutherans, an investor with a $500,000 portfolio made up of 56 percent stocks and 44 percent cash and bonds can be 80 percent certain that she can withdraw $20,000 a year, adjusted for inflation, for the next three decades without running out. But if her portfolio's average return in the first five years ekes out just 2 percent, then there's a 37 percent chance that her nest egg will crack. "Waiting five years can make a big difference. It's five more years for assets to grow, five fewer years clients need to rely on their savings," said certified financial planner Mike Branch of Focus Financial Network.

Extra time is especially important for women. A new report from the Retirement Security Project -- a partnership of the Pew Charitable Trusts, Georgetown University's Public Policy Institute and the Brookings Institution -- found that women near retirement have an average of $34,000 in a retirement plan compared to their male counterparts' $70,000.

The authors pinpoint "differences in employment patterns" that keep women out of the workforce as well as the tendency for women to "invest in less risky assets," meaning a lower rate of return for their retirement dollars for the gap. The group proposes expanding IRA eligibility to caregivers and pushes for widespread adoption of automatic 401(k) policies that would help workers effortlessly build their retirement savings.

For Szyszka, postponing retirement until 2010 will allow her to increase her savings and pay down bills. And it could very well be a blessing in disguise. Szyszka's mom "quickly came bored" once she quit her part-time job at age 71. So Szyszka plans to keep busy, whether by making art, volunteering, or joining the Peace Corps. "Retiring at two-thirds of life doesn't make much sense."

Kara McGuire writes about money. Do you think you'll ever retire? • 612-673-7293 or kara@startribune.com.