If Sarah A. Hale could retire with a lot of money, she would buy an RV, throw a dart at a map and travel. "If I had enough money ... I certainly would know how to enjoy it," she said.

Instead, Hale might work until she dies.

Dressed in a blue Rite Aid smock, blue shorts and white tennis shoes, Hale glides through narrow aisles like a 30-year-old. But Hale is 70, and she puts in 40-hour weeks as a cashier at the pharmacy in the Rotunda shopping center.

Those who gambled in the market looking for more have lost much of their wealth.

Three years ago, Hale retired as a licensed practical nurse. With no pension income, Hale was left to live on $676 a month. To supplement that meager sum, she took a part-time job at Rite Aid and some months later started to work full time.

"I needed the money," Hale said. "Survival, that is the basic instinct. The good Lord must have known I had to make it in this life. He gave me a good mind and a strong back."

She isn't sure how long she will work.

"Till I die, I guess," she said.

Retirement is part of the American dream, those golden years of rest and relaxation after a long life of work. Pensions, Social Security and savings make it possible.

But, truth be told, retirement isn't what it used to be. Pensions, when available, are shrinking beside the swelling costs of making it through old age. Social Security doesn't add that much, and Medicare doesn't pay for drugs - the fastest-growing health care cost.

Savings, which could once be counted on to produce supplemental interest income, yield a fraction of the dollars they once provided. Mounting costs of living and educating children are causing significant numbers of Americans not to save for retirement at all.

So Hale and a growing army of retirees in Maryland and across the country are, of necessity, going back to work into their 70s and even 80s as security guards, cashiers, receptionists and bus drivers.

"They used to call work the poor man's pension; now it is going to be part of many, many people's retirement income stream," said Clare Hushbeck, senior legislative representative and labor economist at AARP. "People are being yanked back to reality in a fairly painful way. More and more people are going to have to be working in retirement."

Older work force

More than 4.5 million seniors 65 and older were working in August, up 18 percent from 3.85 million in 1999, according to the Bureau of Labor Statistics. They make up 3 percent of the work force, and their numbers are expected to climb for myriad reasons, many of them financial, experts say.

Some 21st-century retirees might even have to work until they die. That is the way it was at the turn of the last century. People worked on the farm, in the factory or on the docks until they died.

"If Grandpa was no longer able to plow the fields, he just came inside and worked in the house," said Ken Dychtwald, a psychologist, gerontologist and best-selling author on aging.

Not all retirees who are forced back to work live from paycheck to paycheck like Hale.

Some have saved, invested in stocks and bonds and planned for their future but have found themselves not much further ahead than those who are struggling. Many have been financially ravaged by the collapse of the stock market.

Until recently, a retiree with $500,000 invested in money market funds, blue-chip stocks and high-grade bonds could expect to earn a return of 7 percent a year or more - $35,000 a year.

But lately, with interest rates low and the stock and bond markets battling decline, retirees have been lucky to make 2 percent on their investments - just $10,000.

Those who gambled in the market looking for more have lost much of their wealth.

"The fact is, however you've invested ... you have taken it on the chin," said Jonathan D. Pond, a financial planner, author and public television commentator. "There was no place to hide. Some of them are having to cut back. ... This is a time when many retirees who did the right thing are finding they have to go back to work."

Gary Burtless, an economist and expert on aging and retirement at the Brookings Institution, a Washington public policy research group, agrees.

"There are going to be a lot of disappointed people who look at their bank balance and see that there is just not enough in there to pay for many years of retirement," Burtless said. "They are just going to have to continue working."

Many Americans don't come to the unhappy realization that they are fated to be poor in their old age until after they retire. Experts say that a retiree needs at least 70 percent of pre-retirement income just to maintain the basics. Few have prepared that well.

At 62, Elaine Watkins was ready to start her second life when she retired in 1996 after working for the state of Maryland for 23 years.

She joined an exercise club, spent a month visiting her daughter - one of six grown children - in Fayetteville, N.C., relaxed, and worked on keeping herself healthy because she recently found she had diabetes.

But Watkins, now 68, had miscalculated. Within half a year she exhausted her savings. While her monthly pension and Social Security benefits paid for her rent, utility bills, food and medicine, she had little left for anything else.

"I really hadn't planned it out that well," Watkins said. "I really was expecting more than I was getting from the retirement plan. I just had to do something to make ends meet."

Today, Watkins works 20 hours a week at Eastpoint Rehab & Nursing Center, answering telephones from 4 p.m. to 9 p.m. She earns $9 an hour and likes her job. With the extra money, she can whittle down bills, travel and treat herself to shoes or clothes from time to time. She plans to work two more years until her debts are paid.

"I think at 70 I will be in a position to enjoy the rest of my life here on Earth," she said. But if she wants those little extras, she is likely to have to continue working.

James M. Cherry thought he could retire comfortably after socking away about $460,000, much of it invested in a diversified stock portfolio.

Cherry, who is 55 and lives in Germantown, worked at AT&T Corp. for 27 years and retired after the company bought him and other employees out in 1998.

As the stock market zoomed, so did the value of the $300,000 Cherry received from the company in the buyout. He landed a job as a project manager at a telecommunications firm in Herndon, Va.

But he was laid off and decided to retire, thinking he could live off his investment income until he turned 65 and could collect Social Security.

Cherry and his wife considered buying property in the Carolinas and Tennessee. "We had so many plans," he said.

Then, terrorists attacked the World Trade Center and the Pentagon, and Cherry's brother, a New York firefighter, was killed. Cherry traveled back and forth to New York to help his grieving sister-in-law.

If personal pressures weren't enough, the stock market continued to crumble, and the value of his investments plunged.

Soon, the $460,000 became $100,000. Not only did the market eat at the principal, but Cherry continued to spend as if he were still making $70,000 or $80,000 a year.

It was "very poor planning on my part," Cherry said.

He had no choice but to seek employment, but there were no jobs to be had.

Then, this month, he began driving a Ride-On bus for Montgomery County. The pay is about half of what he was making before, but it does have a retirement plan and he can work to 70.

"Now, I am planning for a real retirement," said Cherry, whose wife also works. "I am paying off bills and getting my mortgage [down]. We are making it."

One thing Cherry doesn't worry about is health care. He has coverage as an AT&T retiree. But many retirees are struggling to keep up with soaring health care costs.

Health care costs

Last year alone, health insurance premiums jumped 13.9 percent, while employee wages rose 3.1 percent, according to a Kaiser Family Foundation survey.

The soaring cost of health insurance drove Mary Maglidt back to work.

In 1999, she retired from a housekeeping job at the Oak Crest retirement community in Parkville. Then, two years ago, Maglidt, 63, lost her health insurance when her retired husband was dropped from his company's health care program.

Growing numbers of corporations have chosen to end or limit retirement health benefits in recent years to cut down on costs as health care expenses have grown at a double-digit pace.

Maglidt, who is diabetic, landed a job at Wal-Mart and bought her own health insurance, paying $3,760 a year.

"I needed a job, " said Maglidt, who works three days a week as a cashier.

Since she started, her health insurance premium has jumped 44.3 percent to $5,424 a year. That soaks up nearly all of the money she receives from Social Security, which is $6,288 a year. The $7.56 she makes an hour does little to defray her medical bills.

"I am seriously going to drop it [health insurance]," Maglidt said. "It is way too much. I hope everything stays all right for two years until I go on Medicare."

Maglidt takes several medications, and her insurance reimburses her up to $500 a year for them. One costs $1,533 a year. Last year, she spent $10,000 for medicine, visits to her doctor, dental work and eye doctor visits.

"I won't lie to you. I'd rather be home," she said while taking a break at the Wal-Mart McDonald's.

Advances in health care and drugs have enabled people to live longer, healthier lives. But living longer comes with a price. People must be able to support themselves as they live well past retirement, experts say.

A person who is 65 can expect to live to 83, four years longer than in 1960, according to government statistics.

"The reality is if you retire at 65, you have certainly 10 to 20 more years where you can remain active," said Rick Cobb, executive vice president of Challenger, Gray & Christmas Inc., a Chicago-based outplacement firm.

A modern dilemma

Dychtwald, author of a best-selling book, Age Wave, calls the whole idea of retirement a "fluke." It was institutionalized in the 1930s to move older workers out of the way so younger people could get jobs.

At that time, there was no problem supporting retired workers on Social Security because there were 40 workers for every retiree, he said, and fewer people lived to 65.

"All of a sudden we began to create a modern version of retirement," Dychtwald said. "Everybody wants it, everybody should do it ... in fact, you should try to do it as young as you can. That became the battle cry."

Dychtwald expects people to work longer, not just because they might have to but also because they want to. Work, he says, allows people to be productive, helps them keep connected and builds self-esteem.

"If you take the pulse of today's retirees, what you learn is that half of today's retirees are having a very positive experience; they are feeling that these are years of power and fun," Dychtwald said.

Many of those retirees are working but at a more leisurely pace, he said.

That is how Barbara Ann Lomax and Alfred Bailey, two McCormick & Co. Inc. retirees, see their jobs. They work two days a week running the McCormick Employee Store, where spices and other goods are sold to McCormick employees at discount prices.

"It is a pleasure to come in," said Bailey, 60, who took early retirement in 1995 because of a kidney problem.

He gets a chance to see people with whom he used to work, and the extra money is nice. Bailey, who received a kidney transplant in 1998, plans to work indefinitely.

"As long as I feel fine, I will keep on working," he said.

Lomax looked at retirement as a new beginning. When she retired in 1995, McCormick gave her a chance to manage the store.

She hasn't thought about retiring again, and if she did step aside, her job would be snapped up instantly, she said.

"We have 106,000 people who would want to step in our shoes," Lomax said. "They are all retirees."

Without work, Agnes Cheatham would be bored.

"I am not a stay-at-home person. I am an active senior," said Cheatham, 72, who answers phones and makes public address announcements at the Wal-Mart in Nottingham. "I find it stimulating working here.

"I would imagine some day I will retire," she said.

Copyright © 2003 by The Baltimore Sun

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