Economic Woes Force Many To Postpone Retirement

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Plunging home prices and slumping stock markets have workers facing tough decisions as they near retirement. For people like Margie La Fond, that means going back into a job market that's weak to begin with, and not very welcoming to people her age.

(Soundbite of music)

ANDREA SEABROOK, host:

Welcome back, it's ALL THINGS CONSIDERED from NPR News. I'm Andrea Seabrook.

Ah, retirement, that golden time when you kick back, play with the grandkids, take up a hobby, maybe travel a bit.

(Soundbite of car crash)

SEABROOK: Okay, reality check. The stock market's reeling, house prices slumping. Who can afford to retire anymore? Well, we'll spend the next part of our show looking at the tough decisions potential retirees are facing.

NPR's Alix Spiegel has the story of what's happened to one woman's retirement dream.

ALIX SPIEGEL: For Margie La Fond, October 22, 2008 began to take on a kind of mystical significance about 10 years ago, 20 years into her career at the Social Security Administration. You see, October 22 was the day when it would finally be possible for her to walk away, to retire with a full pension.

The date had such power that even when she left Social Security four years ago to take what she thought would be a lucrative consulting position, she held on to the day mentally. On October 22, 2008, she would turn 55 years old, time, she thought, to finally see the world.

Ms. MARGIE LA FOND (Potential Retiree): I wanted to be in Alaska for the whole summer and drive up through Canada, travel to China, to Israel, everywhere.

SPIEGEL: Now, these were not her only plans. To prepare for her liberation, she had trained as a wish-granter for the Make-a-Wish Foundation. She also had a vague notion that she might go back to school, take a ceramics class, but the specific plans were less important than the idea itself, the promise of complete and total freedom.

Ms. LA FOND: You know, just being able to do what I wanted for the first time in forever, my whole life, so…

(Soundbite of laughter)

SPIEGEL: But two months from now, When La Fond does turn 55, there will be no extended road trip, no ceramics class. Why? Her reasons will probably sound familiar.

Ms. LA FOND: Well first of all, the house has been on the market since July 13 of last year, and we've had to lower the price twice, so that was clue number one. Clue number two was when we started getting our increased electric bills this year, and they went up from, like, $200 to, like, one month was $700 for heat.

SPIEGEL: So the downturn has upended La Fond's retirement plans, and she isn't the only one. Every year for the last 18 years, the Employee Benefit Research Institute in Washington, D.C., has put out its annual retirement confidence survey, and Jack VanDerhei, a professor at Temple University who's affiliated with the institute, says that this year's survey found a dramatic drop in the number of older people who said that they are able to retire.

Professor JACK VanDERHEI (Fox School of Business, Temple University): Last year in 2007, 27 percent of active workers were very confident. That dropped all the way down to 18 percent this year, and that's the single largest decline we've ever had.

SPIEGEL: The single largest decline in 18 years of polling. AARP, a national organization that advocates for people over 50, also recently conducted a survey, which found something similar.

Chief Operating Officer Tom Nelson says that not only was there a lack of confidence, but many people told the surveyors that they had actually altered their retirement plans.

Mr. TOM NELSON (Chief Operating Officer, AARP): We found that about 25 percent said they were going to have to defer retirement, in fact are changing their retirement plans. The other very powerful statistic is 25 percent said they are taking money out of their retirement savings.

SPIEGEL: Margie La Fond says that she's one of those people who's pulled from her retirement savings to make ends meet. You see, the consulting gig that La Fond did after she left her job at Social Security has run dry. A couple months ago, she realized that not only would she be unable to retire on October 22, but she actually had to go back to a full-time office job.

At first she was undaunted by the idea, but then one day she saw something that changed her feelings.

Ms. LA FOND: Yeah, I was reading an article on the Internet, and it said something about looking for jobs over 40, when you're looking at jobs over 40, and I clicked on that, and they started saying how after 40, blah, blah, blah, blah, and I said after 40, I said well if it's after 50, what about my age?

SPIEGEL: La Fond says that after reading the article, all her confidence evaporated.

Ms. LA FOND: I went outside on the deck, and I just sat, and I just cried. I just cried, and then I did what I usually do, which is get totally frantic and just made lists of companies I could apply to and lists of things I could say if they said you're too old, and you know, what are key words that I could use to show that I'm not inflexible and set in my ways just because I'm old.

SPIEGEL: Though she has sent out letters to about 130 places in the last three months, she has gotten only two interviews. One went well; the other she found frustrating.

Ms. LA FOND: Being interviewed by people that are younger than your kids, it's a little bit nerve-wracking.

SPIEGEL: An executive recruiter told La Fond that she should not be discouraged, that it will take time to find something comparable to her old job, probably months, but La Fond says she doesn't have that kind of time.

Ms. LA FOND: I mean, I probably, if I don't have a job by the end of the year, I will probably settle for a job at a third of what I was making.

SPIEGEL: When she does get work, La Fond says she expects to stay on that job for at least five more years, at least, but in the meantime, she's concentrating on just getting hired. She says she recently changed her resume.

She removed the year she graduated from college and only gave work experience for the last 20 years. On her LinkedIn page, she has added a picture, a shot of her smiling in front of a book case. Her son has told her that the picture makes her look young.

Alix Spiegel, NPR News, Washington.

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