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Cash-strapped and retiring

Many Floridians face a rough road financially after they retire, a new study shows.

By HELEN HUNTLEY
Published July 13, 2006

Many Floridians are at high risk for hard times in retirement, says a study released Thursday by Americans for Secure Retirement.

In fact, out of 250 large counties ranked, all six of the nation’s “very high retirement risk” counties are in Florida, including Pasco County, the group concluded. Pinellas and Hillsborough counties fared slightly better, but still were rated as above-average risks.

“These are the counties that face the greatest challenges with populations unable to maintain their standard of living in retirement,” said Walter Welsh, the organization’s chairman.

Some Pasco workers can relate to that forecast.

“I don’t know if I’ll retire before I’m 72,” said Joyce Mickelsen, 51, who said she makes about $15,000 a year as a greeter at a Port Richey Wal-Mart. She said she and her husband, a construction worker, have only $5,000 in retirement savings.

James Gross, 46, said he is working two jobs but still recovering financially from a costly divorce. “I’ll be working until I’m dead,” said Gross, a Port Richey real estate salesman and painting company manager.

The Americans for Secure Retirement study ranked the nation’s 250 most densely populated counties against one another in 30 areas deemed to be relevant to retirement preparation. The counties then were placed in one of six risk groups based on their rankings across all categories. Smaller counties, such as Hernando and Citrus, were not included in the study.

Counties were more likely to be rated high risk if they have older populations, a higher percentage of retirees, lower average incomes, a higher percentage of low-income families, lower education levels, lower home ownership rates and higher self employment rates.

The study’s authors said Pasco County was singled out partly because 22.2 percent of its population is retired and only 14.3 percent is between ages 20 and 34. In addition, it notes that only 4 percent are government employees, the group most likely to have a pension.

An older population — destined to get even older as baby boomers retire — creates a need for more resources to provide community services, the report said.

Although some of the connections between demographics and retirement readiness might be disputed, there’s no question that Floridians have some challenges preparing for retirement.

Full-time workers in Florida are less likely to participate in any type of employer retirement plan than those in any other state, according to a report the Employee Benefits Research Institute released last year. Only 44.3 percent were participating in Florida, compared with 56.6 percent nationally. Among all workers, including part-timers, only 34.4 percent are part of an employer plan.

Of course the study doesn’t mean that everyone in Pasco County is at risk of poverty in retirement.

“The folks that I’m working with are in good shape,” said Land O’Lakes financial planner Kathleen Rehl of Rehl Financial Advisors.

“It’s important to take a proactive stand on what your future’s going to look like. If people are just putting their heads in the sand saying, 'We’ll make do with whatever comes along,’ they may be in for a rude awakening, but that’s anyplace.”

Rehl says people should save to supplement Social Security and pensions, if any. Those savings then can be used to create income during retirement. Her favorite way is with groups of bonds or bank certificates of deposit maturing at various intervals.

Americans for Secure Retirement is promoting life annuities, which are purchased with a lump sum and then provide an income stream as long as you live.

The insurance industry provides most of the funding for the group, which also has the backing of other groups, including the National Consumers League and the U.S. Chamber of Commerce.

The group’s goal is a tax law change that would make half the income from a life annuity tax-free, up to $20,000 a year.

The study was prepared by two economic research and consulting firms, Orzechowski & Walker and John Dunham and Associates.

Times staff writer Camille C. Spencer contributed to this report. Helen Huntley can be reached at hhuntley@sptimes.com or (727) 893-8230.

[Last modified July 13, 2006, 21:30:42]