So working to an older age is not necessarily a curse. It's the have-to part that hurts, and according to Dychtwald, the number of older people working involuntarily is expanding rapidly. Many of them—22% in the survey—are used to living well (free spenders with good incomes while in their careers) but did not save enough and have already run out of cash or will soon. This group is "flipping out," Dychtwald says. Take George and Maria Rudd of Miami. Together they earn $280,000 a year but have more credit-card debt ($45,000) than savings and investments ($40,000). George, 69, is a construction manager and wants to retire in two years. Both he and Maria, 62, a financial-services compliance officer, rue their profligate lifestyle—for instance, they cashed in 401(k) savings to buy a $58,000 sailboat. "We lived dangerously," Maria concedes. Now the couple are scrambling to save what they can before George's current project comes to an end in two years. "My mother and father were able to live on Social Security," Maria says, deflated. "I don't think we'll be able to. If push comes to shove, I guess we could live on the boat."

The SunAmerica study reveals some surprising attitudes that have profound implications for policy and investing. Most retirees say they feel 17 years younger than their age, and 3 out of 4 say they want to keep learning new skills or academic subjects. Most older adults "demand to stay in the workplace, travel, have sex and otherwise stay in the game," says Dychtwald.

In the past year the number of people in the work force 55 or older—the only age group that's growing—jumped 8%, to 20 million. Despite a hiring slump, the average job search for those over 50 fell to less than three months for the first time in memory, according to outplacement firm Challenger, Gray & Christmas. "Companies are looking ahead," says its CEO, John Challenger, who foresees a worker shortage as the boomers who can afford to retire do so and the much smaller Generation X proves unable to fill the gap. So, whether they like it or not, the boomers who can't afford to quit working will give the economy just what it needs.

[an error occurred while processing this directive]

That prospect doesn't do much to raise the spirits of people like Frank Alexander, 71, a full-time aide at the Iowa Workforce Development Center in Des Moines. "Hell, I thought I'd be living in Costa Rica by now," he grumbles. "I'm broke. But as long as I keep working, I can pay for my medicine and taxes on my home." Alexander has worked since he was 16, finishing his main career on the factory floor at Sara Lee, where he was forced into early retirement at 55 by health problems. He's reasonably cheerful but laments his lost opportunities to save. "I should be able to retire," he acknowledges. "Due to my own stupidity, I can't. But it's expensive to raise a family, buy a home, all that stuff." A big source of Alexander's problems is his puny pension benefit of just $130 a month. With modest savings and monthly Social Security benefits of just $1,040, things are tight, even with his $28,000-a-year job.

A shrinking pension—or none at all—is something more Americans will have to get used to in coming years. The shift by employers from defined-benefit plans (traditional pension plans that guarantee income for life) to defined-contribution plans (the tax-favored, employer-sponsored savings plans such as 401(k)s that do not provide guarantees) is beginning to have a devastating effect. In 1975, according to the Labor Department, 29% of workers named guaranteed pensions as their primary retirement plan, and only 4% relied on 401(k)-type plans. By 1998, the most recently available data show, the numbers had shifted to 17% with guaranteed pensions and 21% with 401(k)s as their primary retirement plan. Roughly half of all companies offering traditional pensions are shifting their focus to 401(k)s, a Hewitt Associates study indicates.

The erosion of guaranteed benefits is a big reason that boomers will have to work longer, and, says Robert Henrikson, Metlife's president of institutional business, it's a major factor in retirees' growing angst over their finances. A Metlife study found a high correlation between retirees satisfied with their finances and those with guaranteed income covering their fixed costs. The correlation exists among those with both low and high incomes. Peace of mind, it seems, comes from knowing you can pay the bills even if the stock market blows up. "The big ah-ha," says Henrikson, "is that people have found that managing an income stream from their nest egg is very difficult when the market doesn't cooperate."

1 | 2 | 3 | 4 | 5 | Next >>

[an error occurred while processing this directive]

[an error occurred while processing this directive]

[an error occurred while processing this directive]