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Anemic economy sends retirees to work

Some are scared. Some embarrassed. Others are just plain glum. Tumbling stock values have taken their toll.

By ALEX LEARY, Times Staff Writer
© St. Petersburg Times
published October 13, 2002

[Times photo: Stephen J. Coddington]
Carl Burnham, 58, of Pine Ridge came out of retirement and took a full-time job at Home Depot after his stocks took a big hit.
When he took an early retirement and moved to Pine Ridge in July 2000, Carl Burnham began to explore his hard-earned leisure time. Golf, gardening and travel with his wife filled the menu.

Burnham, who oversaw the payroll for a large chemical company in Rhode Island, had always planned to take a part-time job in Florida.

But what began as a way to stay active became a necessity as the economy continued to falter. His stock portfolio lost 40 percent of its value, or about $120,000.

"One of the biggest fears when you retire is outliving your money," Burnham, now 58, said from behind a counter at Home Depot in Crystal River, where he works 40 hours a week.

"I decided that taking a full-time job would be a good way to put off tapping that money," he said. With a faint laugh, he added, "Now I'm waiting to re-retire."

The anemic state of the economy has affected millions of Americans in the way of diminished benefits, fewer employment opportunities and, most dramatically, tumbling stock values.

About $8-trillion in wealth has been wiped out in the past three years.

"That is one of the greatest losses of wealth in this country's history," said John Jendro, a financial adviser who lives in Sugarmill Woods. "There is no way anyone can come out of it without being harmed."

For workers such as Burnham who have recently retired or are considering doing so, the pain is particularly sharp because so many rely on their investments, including 401(k) plans, for income.

"Their only choices are to keep on working or reduce their standard of living," said University of Florida economics professor David Denslow.

"They thought they were rich in 2000" before stocks began to seriously fall, "but now they're not," Denslow said.

On Wednesday, the Dow Jones Industrial Average dropped 215 points and reached a five-year low. The Dow climbed 316 points to close at 7,850.29 on Friday, but it is still far from the double digit levels of the 1990s.

The number of older workers has been rising in recent years as people delay plans to retire. Still, a notable upturn has been recorded during the past 12 months.

Nearly 1.5-million additional people age 55 or older went back to work during that period, according to the U.S. Bureau of Labor Statistics.

In Citrus County, where almost half of the 52,000-plus households include at least one member who is age 65 or older, conventional wisdom suggests there are more than a few people facing that prospect.

A handful of people contacted by the Citrus Times last week acknowledged they were working once again but said they were too embarrassed to discuss their situation in public.

Marty Smith of Citrus Springs took a sales job at Wal-Mart in Dunnellon last month, ending a six-year retirement.

"I looked at my investments and thought it would be nice to have a few extra bucks in my pocket," said Smith, 68, who moved from the Washington, D.C., area after a career as a microbiologist in a hospital lab.

For the first few years in Florida, Smith's investments were earning more than he was withdrawing for living expenses. "It was great," he said.

And then the markets started a long, depressing slide. Smith's portfolio today is slimmer by more than 40 percent, forcing him back to work, at least until things improve.

"Even though I'm on my feet a lot," he said of his new job, which has kept him off the golf course, "I like meeting the people."

Many other Citrus residents are exploring employment options or trimming vacation plans, dining out less often and avoiding other small luxuries.

"When you have a half million dollars in stocks and now you are down to $200,000, it's scary," said 63-year-old Faye LaVelle of Sugarmill Woods.

Now when she and her husband travel in their recreational vehicle they are more likely to stay at state parks than fancy RV resorts. "We're a little more cautious."

With Social Security payments kicking in last year, LaVelle feels some comfort. Yet the thought of going back to work, perhaps as a real estate agent, has crossed her mind.

The same is true for Robert Kitchen, 63, also of Sugarmill Woods. He retired as a Delta Air Lines pilot three years ago, just before the markets began to suffer. Kitchen is considering a job at Home Depot or Lowe's, though his wife, Barbara, joked the decision would be partly driven by boredom.

"People here are a little glum," Mrs. Kitchen said of her community, one of the more affluent in Citrus County.

"Some people were smart and got out in 1999 or so and went into bonds," she said. "But a lot of us who hung onto the stock market have not done well."

Their friend Glenn Davis escaped unscathed. He retired on Dec. 28, 1998, as a tax director for Dreyfus Corp. in New York City, and on the first day of the new year, removed his money -- nearly $1-million -- from the stock market.

"We decided to live with what we had and not try and beat the world," said Davis, who moved his investments to an annuity program.

The rate of return may be more modest, but Davis is guaranteed annual payments of $108,000, considerably more than he estimated he would need in retirement.

"For the first year I wasn't so sure about my decision because 1999 was a pretty good bull market," he said. "But as we all know today, it was the right decision."

Saying his situation was part luck, part planning, Davis, 59, feels fortunate. He also feels for his neighbors. "They don't sleep as good at night as I do."

Some relief is available. This month, the federal government eliminated tax penalties for people who want to slow down their rate of withdrawal from certain retirement plans, such as 401(k)s and individual retirement accounts, before they are 591/2.

The new rule, however, does not apply to millions of older retirees who say their retirement accounts are declining just as rapidly and withdrawal rates set in more stable times could wipe out the balance.

-- Information from Times wires was used in this report. Alex Leary can be reached at (352) 564-3623 or

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