Retirement on Hold

"Money woes pressed Jerry Wood, 69, to reenter the workforce two years ago after a short-lived retirement from his job as a field engineer. Though his home is in Alabama, he accepted a transfer to Wichita, Kan. Now, he says, getting to his construction job by 7 a.m. five days a week is just part of life in his later years.

"With the downturn in the market and the high cost of drugs, I needed to go back to work to make ends meet," says Wood, who has diabetes. His wife also has diabetes and related eye complications that require expensive treatment. "We weren't counting on such high health care costs when I retired," he says.

"Money woes pressed Jerry Wood, 69, to reenter the workforce two years ago after a short-lived retirement from his job as a field engineer. Though his home is in Alabama, he accepted a transfer to Wichita, Kan. Now, he says, getting to his construction job by 7 a.m. five days a week is just part of life in his later years.

"With the downturn in the market and the high cost of drugs, I needed to go back to work to make ends meet," says Wood, who has diabetes. His wife also has diabetes and related eye complications that require expensive treatment. "We weren't counting on such high health care costs when I retired," he says.

Like Wood, many people say health care costs are the biggest obstacle to a secure retirement. In a recent survey by the Employee Benefit Research Institute, 43 percent of workers polled said they aren't confident they can cover medical expenses as they get older. And only 18 percent said they're "very confident" they can retire comfortably, down from 27 percent in 2007. That's the biggest one-year drop since EBRI began tracking worker attitudes toward retirement savings 18 years ago.

David Certner,AARP legislative policy director, says it's no surprise that people are pessimistic about their retirement security.

"The current stock market volatility has become even more important to many in or nearing retirement who rely on their own pensions, such as 401(k)s, that put investment risk on individuals," he says. "So retirement security rises and falls with the market."

Christian Weller, a senior fellow at the Center for American Progress in Washington, says today's economic outlook is not unlike the recession of 2001-2002, when workers on the verge of retirement had similar qualms. Portfolios plunged in value at the time. But back then there was a silver lining: Housing prices surged and people accumulated huge equity over the years.

Now, he says, "because of the run-up in housing prices, people had thought they could retire earlier than they otherwise would have. In my experience, it's only in the last six to 12 months to retirement that most people figureout how much they really need."

Ed Gjertsen, a certified financial planner in Chicago, says his older clients are reassessing what their assets will be worth in a few years, given the economic conditions.

"When your portfolio is going down, and housing and equity prices are going down, and inflation is creeping in-this adds a dimension of nervousness. It's hard to tell clients to wait and see what happens. As they're approaching retirement age, this isn't what they pictured.

"Lois Hudson, 65, pictured retiring this year from her job as an office administrator in California and moving to Maryland to be near her daughter. But she got caught up in the nation's mortgage crisis and now owes more on her condo than it's worth. She can't sell it and may even face foreclosure.

Of course, not everyone in a shaky financial position is making the decision to defer retirement. After 30 years in thetravel business, Patsy Parker of Helena, Ala., felt "worn out." She wanted to quit work, but her savings had dwindled by one-third, making retirement seem implausible.

Then in May, she announced her plans. "I bit the bullet and resigned," she said. "I didn't want to keep putting my life on hold for money."

Carole Fleck is a senior editor at the AARP Bulletin.