Since the 1970s, the trend among American workers has been to retire earlier, but in recent years that has started changing. In 2001, 31.9 percent of Americans older than 54 were working. Now, 34.6 percent are.
"What's striking is that the numbers had been fairly stagnant; if anything, through the '70s, '80s, and early '90s, people were retiring earlier," said Dean Baker, co-director of the Center for Economic and Policy Research. "Then suddenly we got this amazing reversal."
At 57, U.S. Airways pilot David Butterfield faces mandatory retirement in three years, but he figured it would be a prosperous one, with a pension of $110,000 a year, a stay-at-home wife and a second home in San Diego calling. For almost 30 years, he has been leafing through the pages of Cruising World magazine, dreaming of the sailboat that would occupy his retirement days.
But U.S. Airways' first bankruptcy sent his pension fund into the lap of the federal government. His annuity dropped to $45,000 a year, but the company promised to help pilots with a rich lump-sum payment of $350,000 to $400,000.
Then last month, U.S. Airways slipped back into bankruptcy. A new round of cost-cutting will all but obliterate that lump-sum payout, Butterfield said. Until Medicare kicks in, roughly $10,000 of the $45,000 left of his pension will go to the health plan that will no longer be available to retiring pilots.
Now, he and his wife are looking for work. Maybe, he said, he could be a medical technician. Maybe he could sell his experience in the Naval Reserves to a defense contractor.
"I basically have three years to retool," he said with a shrug.
Such adjustments can be particularly wrenching, said Duane Woerth, president of the Air Line Pilots Association, the pilots' union. They hit older workers, who have the most difficulty retraining for a new career and who have the least time to build up savings. Workers with defined benefit pensions may have structured their whole lives around that expected payout.
"Everything you've done in your life to date, what kind of home you live in, what your wife does, where your kids went to college, it may all be built around that pension," he said. "This alteration is like an earthquake. It changes everything."
Jim Roberts, 56, said he probably would not have retired early from the Bethlehem Steel mill in Steelton, Pa., if he had known that in December 2002, his $24,720 annual company pension would become a $14,904 annual pension from the federal government. Now, he said, the thermostat stays down, the car stays parked unless a trip is absolutely necessary.