Best-laid plans for retirement undone, legions are remaking their golden years

Many people would rather talk about sex than about money, particularly if it means having to disclose that they don't have enough.

So it is with some reluctance and shame that many boomers-and-beyond are admitting their retirement nest eggs have been scrambled, beaten to a weightless froth by an economy spun out of control.

Many, even those who considered themselves "haves" in a spreading sea of "have-nots," are chagrined to find they're now members of a new, not-very-exclusive economic class: the "hads."

Some lost a job and those high-earning years they needed to plump up a thin retirement fund. Those already retired saw their financial featherbed lose loft, flattened by forces beyond their reach.

For many, the realization is sinking in that despite what they thought were all the right choices, they're having to rewrite their script for the future.

IN EARLY 2008, Larry Strunk, 66, was actively managing his 401(k), day-trading oil stocks. "It was too much hassle," he recalls. "I put it into something I thought was very solvent" — Washington Mutual Bank.

Strunk, a retired Boeing customer-service representative, planned on his 401(k) funding his yen for travel to exotic places.

The bank's failure last fall, the largest in American history, put a hole in his "pot of gold." His stock is now worth pennies — not enough for two round-trip tickets to Cincinnati.

For those at or beyond retirement age but still working, such financial sinkholes have left many calculating they may have to stay at it for a long, long time.

Bernice Kari, 68, retired at 40 to travel with her older, retired husband. After he died in 2004, she went back to work. Then this past January she was laid off from her job at a cellphone call center.

Now, her daughter helps share payments for the family home in Federal Way, and Kari works as a caregiver for the elderly. She makes $11 an hour. "I don't feel sorry for myself. It just happens," says the relentlessly upbeat Kari, who likes working and likes her clients. Besides, she adds, "A lot of people are in the same boat."

And then there are those baby boomers who thought they wouldn't age and never bothered to plan. If you're never going to grow old, already know the color of your parachute and are doing work you love, why would you ever stop?

Well, maybe because it's dawning on some of the oldest boomers, age 63 this year, that after they've been working all day — even at work they love — they don't always feel like going out dancing. Suddenly, working to age 70 or so sounds like . . . well, like work.

Whether it's lost jobs or investment income, a stagnant housing market, low-wage-no-benefits jobs or revised tallies of expected old-age expenses, many people admit to being embarrassed that they can no longer keep up with their group. Some have had to cut higher-flying friends. "I don't hang out with them any more," says Martha Armitstead, 56, who was laid off from her administrative job in a real-estate office at the end of January. "I can't spend $60 a night to go out and have fun."

It's not surprising that whatever the circumstances, such precipitous financial upheavals have produced palpable anger.

"I did nothing to create this," says Randy McDougall, 62, whose job at an aerial-photography shop died last fall with the home-building industry. "A bunch of damn politicians decided to let the fox guard the henhouse, and that kind of derailed my life plan. I'm really pissed off — why do I have to pay for someone else's greed?"

McDougall was already planning to work until 68 or so, socking away cash to build up savings decimated by a splurgy wedding-anniversary trip to Italy last fall — a dream trip for the two opera buffs. Now, "Unless things pick up, it's going to be a real lean retirement."

Like many retirees and out-of-work boomers, McDougall is considering work he never thought he'd do: Minimum wage, no benefits, physical labor. "Twelve dollars an hour is looking pretty good now."

His wife is still working, so they've got some cushion. Others aren't so lucky.

Shan Ottey and her partner, who both lost their jobs and have watched their slim retirement funds shrink even more, now go without health insurance. "Oh, my God. We keep looking into it, but then we give up the house payments — or stop eating," says Ottey, 63. The two signed up for low-cost water-aerobics classes. "We have to stay healthy."

For some, it's the multiplier effect. Maybe they were OK, but then adult children lost jobs and moved back home. Or a parent needed help. Beth Rice, 54, closed her business and lost her savings caring for her terminally ill mother a few years ago. Then, in October, a good job with a specialty embroidery company vanished along with the orders for corporate windbreakers.

Now, local workshops aimed at helping "mature" job-seekers are running double shifts.

Dazed participants ask: What do you do when you send out dozens of applications but rarely get any response at all? How do you get noticed at a job fair? How do you combat age discrimination? At a recent workshop, a tall, personable man gave voice to the feeling shared by many: "I get discouraged."

PAUL VALENTI is pumping up the crowd, speaking in a high-speed cadence that works in multiple ways.

These 55-and-over job seekers are going to have to get used to moving fast — and outside their comfort zones. Many will be interviewing and, God willing, working in a younger, more diverse and tech-savvy setting than what they once knew. Valenti, from the Seattle Mayor's Office for Senior Citizens, is trying to give them confidence that they have what it takes.

Focus on what you can do, not on the months of no nibbles. Believe in yourself. Age is your biggest asset, he tells them over and over. "You didn't get this old by being stupid!"

He role plays through a job interview, coping with questions that can make an older job-seeker squirm: "Do you have any pre-existing medical problems that would prevent your fulfilling job duties?" "How long are you going to work?"

A sense of defeat ripples through the crowd when he asks for questions. They're stunned that by the time they see a new job listed, hundreds have already applied.

Some are learning new skills. Mastering Microsoft Excel, Facebook and Twitter is hard enough, but what's really hard is learning a smooth answer to that damnable interview question — illegal but oft-asked — "How old are you?"

Plenty of boomers once thought they'd retire at 55 or 60. For many, "that's just gone out the window," says Laurie Black of the Workforce Development Council of Seattle-King County and coordinator of the Mature Workers Alliance.

More than 60 percent of voters age 50 to 65 in Washington say they will delay retirement and work longer unless the economy improves in the next year, a recent AARP survey found.

Among those already retired, one in five said they'll have to go back to work.

Perhaps, in another culture, that wouldn't be considered such a big deal. Historians note that the whole concept of retirement in the U.S. is a relatively modern artifact, constructed mainly to push older people out so young people could fill scarce work slots, and made possible by the Social Security Act of 1935, which had workers funding their own retirement annuities. Bellevue career counselor Jan Reha, working full time at 67, tells her clients to get rid of the "sense of entitlement" and belief that " 'I'm 65, I should be able to go off to the pasture and chew my cud.'

"That's never how life was."

Still, for many, working later in life wasn't part of their plan.

A STARTLING FACT stands out in a little chart from the Employee Benefit Research Institute, a Washington, D.C.-based nonprofit.

In 1988, nearly 57 percent of wage and salary workers, excluding those in agriculture, were covered by a "defined benefit" pension plan, delivering a set amount every month. Fewer than 26 percent had a 401(k)-type plan.

By 2006, those numbers had essentially reversed: More than 67 percent of workers relied on 401(k) plans, versus 31 percent with defined benefits.

For those with lots of stock in their portfolios, the crash hit hard. Many realized that with 401(k) plans, they weren't saving. They were gambling.

Even before that, experts had warned that many nearing retirement had too little saved.

In 2006, the median balance for people approaching retirement was $60,000 — not nearly enough to stave off a severe decline in living standards, noted Alicia Munnell, director of Boston College's Center for Retirement Research. Her fix: Work two years beyond average retirement age of 63.

Now that goal, along with 401(k) cash, is elusive for many.

"Most Americans have seen 40 percent or more of their savings disappear overnight," notes AARP's McDonald. For younger workers, it may be a temporary setback. But for those ready to retire, or already living on their investments, "it's a completely different situation."

Although the people we talked to had very different stories, they shared a common event: a precipitous drop in income.

Shan Ottey expected to retire at 65 from her job as an engineering assistant at the University of Washington, where she'd worked for 12 years. Three years ago, at age 60, she was laid off.

Her partner was working, so Ottey planned to return to her avocation producing and filming documentaries.

Then, more recently, her partner, at age 60, lost her job, too.

Now, they're both networking and job searching "24/7," and are "big on budgets." Ottey began drawing reduced early Social Security payments, and started working part-time for the Foundation in Georgetown, helping others find jobs, for modest wages and no benefits.

"Both of us are thinking we are going to have to be working into our 70s — if we can even get jobs."

Larry Strunk isn't looking for work. He's looking for the housing market to perk up so he can sell a house or two.

When Strunk retired, he felt confident financially. After his wife died, he sold their big home and bought a log house with parklike acreage on Whidbey Island, pulling money out of his 401(k) for extensive remodeling and lots of travel.

"I spent money like I had it," he recalls. New Zealand, Mexico a couple of times, Texas, Canada . . . He reacquainted with a high-school classmate, and the two married in Jamaica last fall.

In September, federal regulators seized Washington Mutual, and his $20 shares plunged to 16 cents.

The nest egg gone, "it's month to month" now, he says.

Linda Strunk says they're "house poor." Her home in Bakersfield, Calif., is for sale, at a loss. The Whidbey house is for sale, price reduced twice. If it sells, they'll move to Linda's vacation home on the coast, the least likely to sell.

"We're not destitute," Larry says. "We just have nothing to fall back on."

FOR MANY of these people, keeping discouragement at bay is part of their new lives. Many are learning, or relearning, resourcefulness.

"I frequently suppress feelings of fear, feelings of being scared, feelings of depression," says Randy McDougall, who spends hours combing Craigslist and online job listings. "They're there, but I just say, 'Go away. I've got work to do.' "

When Beth Rice found herself in a pinch, she got creative. She put a loft bed in the living room of her small Green Lake apartment and rented her bedroom. Then she hustled a job at a remote Alaska cannery where she once worked. Now, she's living in a dorm room and working long days. Her latest e-mail: "Lots of herring and halibut = lots of OT :)"

Bernie Kari is now caring for two clients, also working long days. She hopes to find a better-paying job once she gets certified as a nurse's assistant.

"You have to have a certain amount of confidence that you will make it through and survive it," she says. "I've always been 'get up, pick yourself up, start over again.' Only I'm like a lot of people — there wasn't anything to start over with."

For Shan Ottey, the temporary, part-time job with AARP gives her perspective: "I talk to people all day who are down to their last penny." Job loss can bring loss of identity, alienation, stigma — not so different, she says, from what she has felt as a lesbian.

Her balm for the sting of a lean retirement: Hold onto your dreams and build a community of friends like hers, who throw "rent parties" to help others get through a tough month. "I feel fortunate in so many ways that I have a community that supports me," she says. "You're not as isolated as the rest of the world would have you think."

Carol M. Ostrom is a Pacific Northwest magazine staff writer. Alan Berner is a Seattle Times staff photographer.