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When she was 57, Juanita Lopez jumped at the chance to retire early from Baltimore Gas and Electric Co., figuring her 40 years of work had earned her a retirement of comfortable loafing around her West Baltimore home.

At 56, accountant Richard Kepple was thankful to take early retirement when the Pennsylvania acetate yarn plant he had worked at closed.

But, like a growing number of early retirees, both are now looking for work. The pensions offered to support them after they jumped -- or were pushed -- out of their longtime jobs turned out to be too small to keep them afloat.

Ms. Lopez said she enjoyed a year of loafing, but then realized she retired too soon. At 59, she's now looking for work to buttress her financial security in a world where companies have reduced retirement benefits and Social Security and Medicare appear threatened.

"Everything's iffy," she complained.

Early retirement will be an even iffier -- though increasingly common -- proposition for today's workers, pension analysts warn, as companies continue to pare their payrolls.

BGE, for example, used two offers in the last four years to trim 1,100 workers from its payroll, Westinghouse Electric Corp. trimmed 425 Maryland workers last year, and McCormick & Co. Inc. 273 this year.

And because employers are reducing already skimpy pensions and retirement benefits, more and more older Americans will find their pensions won't support them, said Martin Sicker, director of work-force programs for the American Association of Retired Persons.

But there's a catch to that, too, Mr. Sicker warns.

Retired workers are finding it much more difficult than they expected to land another job. And when they do find work, it tends to pay less than they had been making. That means many early retirees are finding they can never afford to quit working.

"It is kind of a depressing picture," he said. "A lot of baby boomers who want to retire at 50 are, really, never going to be able to retire," he said.

Just ask Mr. Kepple, now 65, who has been working for nine years to augment his $350-a-month pension.

"I can't afford to retire," he shrugged.

After long months of unemployment, Mr. Kepple signed up with a temporary agency, Towson-based Salsbury & Associates Personnel Inc., because he found "there's not much in the line of full-time jobs for someone as obviously old as I am."

But because there aren't even enough temporary jobs for him, and the ones he does get pay him only about $10 an hour without benefits -- less than his longtime job paid -- Mr. Kepple said he has to keep putting off his actual retirement.

"Maybe I can retire when I'm 70," he said.

Softening the bitterness over his often-delayed retirement, he said, is the knowledge that he's not alone: "There's a lot of people like me," he said. "Behind the eight ball."

Flooding back to work

Indeed, in an April article that was the first to document the trend, Bureau of Labor Statistics economist Diane Herz found that hundreds of thousands of early pensioners started flooding back to work in the mid 1980s, reversing a 40-year trend toward earlier retirement.

Her study of older men found that more than 40 percent of all male early pensioners -- about 1.4 million men age 50-64 -- were drawing a pension and working in 1993, up from 30 percent, or 1 million men, nine years earlier.

The reason for the return appears to be desire driven by need, she said. At age 50 or 60, many early retirees are physically and mentally vigorous, and eager to start new careers, further their previous careers or just stay busy, she said.

But many are making a choice out of what is becoming an economic necessity.

Ms. Lopez, for example, said she has decided to go back to work because she's still comparatively young and wants to "get back into the world."

She also wants a paycheck because, after only a little more than a year of retirement, she's realized she isn't as financially secure as she first thought.

"My pension is decent for right now. . . . But I have a long span of time ahead of me. I've got health insurance through the company, but heaven only knows for how long. Companies can change their mind at any time," she said.

In fact, health costs may be one of the most important drivers behind early retirees' return to work, Ms. Herz believes.

After accounting for inflation, pensions of the early retirees she studied grew only about 1 percent a year in the last decade, Ms. Herz found.

Meanwhile, health care costs skyrocketed. During the last decade, health expenditures for people aged 55-64 rose nearly 20 percent after subtracting out inflation, according to the BLS.

Younger and needier

Lorene Ulrich, who runs an AARP training program for older workers in Washington, said she has seen a change in the early retirees seeking work since the program began in 1988.

Then, she said, "we saw retirees who went back to work because they were bored."

In the last five years, though, she's seen younger and needier retirees. "They have to go back to work because their pensions are not big enough and they have no health care," she said.

The squeeze has sent an influx of early retirees into Snelling Personnel Services in Timonium, said Linda Kaestner, who runs the agency.

The job applicants she sees typically have spent a year or two retired, and gotten frightened as expenses ate away at their pension, she said.

"Usually they sit back for awhile, then they realize it wasn't what they were expecting . . . things got tighter and they got more

concerned about their pension," she said.

She has a tough time placing some of them, though, not because of white hair but because "they have outdated skills," she said.

Whatever the reason, early retiree John Brandt says the combination of a small pension and a tough job market adds up to years of extra work for him.

Mr. Brandt, who took early retirement at 53 after a Baltimore A&P; bakery closed in late 1992, said he has to keep working because his pension of $860 a month doesn't even begin to cover his expenses.

"Medical insurance takes half of the pension," he said.

"I have to work. I can't afford not to," he said.

After losing a second job, the 55-year-old Catonsville maintenance man is now out looking again. Although he earned VTC $12.68 an hour with good benefits at the bakery, he'd now jump at a job that paid $10 an hour.

But as bad as things are for him, he says he's better off than many younger workers. At least he worked in a time and place where he earned a chance at a pension, no matter how inadequate.

:. "I feel sorry for young people," he added.

Today's workers worse off

There is good reason for Mr. Brandt's pity, analysts say. Today's early pensioners are much better off than today's workers.

About half of all workers today aren't even in jobs that offer pensions. And the lucky ones who are often see their company cut back on their benefits.

Fewer companies are indexing their pensions for inflation, for example.

"Inflation comes as a terrible shock to retirees," warned Karen Ferguson, author of a new book on pensions and director of the Pension Rights Center in Washington, D.C.

Even a low 4 percent annual inflation cuts the value of a pension in half in just 14 years, she noted.

To save more money -- and shift even more costs onto retirees -- companies are also reducing the health insurance coverage they offer pensioners.

Fruehauf Trailer Corp., for instance, is still fighting a legal battle over its attempt to cut off insurance to about 700 retirees of Maryland Shipbuilding and Drydock Co.

And a 1994 survey by the management consultant firm Foster Higgins found that nearly one out of five major employers nationwide was planning to change retirees' health benefits sometime in the future.

Further dimming the outlook for early retirees: Companies have decided they were too generous in past early retirement offers and are reducing those as well, said Kellen Leister, managing actuary for the mid-Atlantic office of Hewitt Associates.

Mr. Leister, whose office helps companies draft early retirement offers, said just a few years ago, companies typically tried to lure people off the payroll by offering to add five years to their age and to credit them with five additional years of service -- changes that would boost their monthly payout.

"But many of those were very expensive, and they tended to be oversubscribed," he said. "So now you're more likely to see offers of three and three," he said.

Already, early-out offers are so stingy that in the two years she's been a financial planner in the Bethesda office of American Express, Sara Laber has yet to counsel a client to retire early.

She shies away from giving direct recommendations, and instead relies on computer models that show her clients what their finances will look like a few years after their retirement.

"I don't tell them. It becomes evident. They can't afford to live on it," she said.

Most people don't save nearly enough to allow them to retire at the traditional age of 65, let alone early, she said.

And she worries about those who haven't planned for retirement because the early-out offers often seem alluring, and most people don't realize how long they'll have to support themselves, and how costly it will be.

"If they have the option, people want to retire today. It is awfully tempting. But it costs a lot more money to live and support your lifestyle than what the average person thinks," she said.


* Percent of male early pensioners (aged 50-64) working in 1984 and 1993

1984: 31.1%

1993: 40.1%

* Number of men aged 51-64 drawing a pension and working:

1984: 1 million

! 1993: 1.4 million

* Annual value of early pension for men aged 55-61 in real (1992) dollars:

1984: $7,859

1992: $8,227

* Annual value of early pension for men aged 62-64 in real (1992) dollars

1984: $7,562

1992: $8,219

* Consumer expenditures on health care in real (1984) dollars, 1984 v. 1993, and percent increase

Ages 45-54: $1,250 v. $1,257 -- 5.6%

4( Ages 55-64: $1,260 v.$1,506 -- 19.5%

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