Medford mail tribune., March 29, 1959, Image 34

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"A watch and : t T ttttt 1
a lo"" :'" ; New Ways
I by Lawrence Galton i
Not long ago, a machinist in a Stamford, Conn.,
plant got word that his anniversary vacation,
three months with pay, was due. He'd been expect
ing it and had been poring over Florida real-estate
ads. Now, with his wife, off he went to St. Peters
burg. Would this be the place where they could
settle down happily after he retired in 1960?
They'd find out by living there, actually pretesting
it, for three months.
This anniversary vacation plan which provides
three-month paid vacations every fifth year after
25 years on the job has helped more than 100
employees of the Connecticut firm since its incep
tion in 1950. Not only has it enabled many to try
"dream" retirement places for their later years,
it has given all of them long-enough periods of
freedom from job responsibilities to provide a
"feel" of what retirement really will be like. It has
helped them to think about how they'll spend this
period, and to make plans and develop hobbies.
It typifies something new and noteworthy in
American industry.
Each year now, half-a-million Americans al
most 10,000 a week face retirement. We've come
a long way from the days of blithe ignorance about
the so-called "golden leisure" years. We know now
that retirement is no automatic gateway to hap
piness, that for most retirees in the past, it has
meant automatic unhappiness, a sudden wrenching
period of readjustment, full of problems.
Today business is trying to help solve these
problems. Going far beyond the old "give him a
watch and a fond farewell" attitude, it is intent on
doing as much as possible to make retirement a
happier and richer experience for former employ
6 Family Weekly, March 29. 1959
ees. You see the new attitude at work everywhere.
A Kalamazoo, Mich., drug firm, as a little "ex
tra," gives each retiring employee a guest card
good for lunch in the company cafeteria so he'll
feel welcome to come back at regular intervals and
renew friendships.
A Milwaukee life-insurance company gets out
a monthly magazine for its retired people, with
stories of their role in the company's growth,
articles on leisure-time ideas and other subjects
they may find useful, and a periodic list of their
addresses for the exchange of holiday greetings
and visits. Object: to maintain not only a company
tie with the retired, but a social tie among the
retired employees themselves.
These ARE minor yet helpful grace notes. There
are many major chords, too. In Morton Grove,
111., a machinery firm now adds to its other benefits
a hospital and surgical policy for each retiring em
ployee and his wife fully prepaid by the company
and good for the rest of their lives.
It's precisely during retirement, when a couple
can least afford long or frequent hospitalization
yet when the need is most likely to arise, that such
protection is most difficult to get. Even when it's
available, premiums are often prohibitive.
Medical expenses, of course, are only one finan
cial problem of retirement, a problem greatly in
creased by inflation. Now many companies are try
ing to solve it with more liberal and flexible retirement-income
plans.
A large aircraft company has just added an
escalator clause to its pension system. Payments
will be linked to what dollars can actually buy as
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shown by the Consumer Price Index.
A Texas oil-producing firm has added a stock
bonus plan. Each month, the company contributes
10 percent of each worker's salary to buy the
company's stock on the open market. The stock
purchases, plus the dividends from them, are
credited to each worker's account.
The company claims that upon retirement, a
typical 30-year employee who has been earning
$450 a month can expect to receive a $225 monthly
pension and $162.50 a month from Social Security.
But he also will own stock worth, with dividends,
an estimated $42,700 and monthly dividends from
that may amount to $214. Thus, his total income
may come to $601 a montheven more than he
earned while working. If inflation continues,
chances are that both the value of his stock and his
dividends will go up.
In hundreds of big companies today, there are
profit-sharing plans to increase retirement bene
fits. Now a relatively small Midwest optical firm
with fewer than 300 employees has developed a
plan which tops many of the largest ones in bene
fits and could, the company believes, serve as a
model for all small companies.
Under the plan, each employee contributes 2
percent of his pay up to a maximum contribution
of $200 a year. That's so the plan isn't overloaded
in favor of high-salaried executives. In return, tlfe
company contributes 20 percent of gross profits
before taxes.
Each employee's interest in the fund grows at
the rate of 5 percent yearly. At the end of 10 years,
half of what's in his account is his. At the end of
20 years, all of it is.
!Z3
to Happier Retirement
Industry is discovering countless ways of easing the problems of ulife after 65."
Meanwhile, however, if he should die before the
20 years are up, everything in his account will be
paid to his beneficiaries. So, in effect, the fund is
an insurance policy. It's also a credit union: em
ployees can borrow from it, and 50 have financed
home mortgages through the fund, helping them
selves and, through their interest payments, add
ing to the fund.
A secretary now has an $8,000 account on a total
salary contribution of just $500. A 40-year-old
shop worker has $12,000 and, at the age of 58, will
have at least $60,000. A department head who rose
from messenger boy has $41,000 and, if he works
until 65, will have at least $150,000.
Even before retirement, in their active years
with good earnings, many people can't make ends
meet. A Michigan appliance company decided to
give employees courses on family-income manage
ment, down-to-earth information on how to set up
realistic family budgets.
Now it's providing such courses in the plant not
only for employees, but for their wives, too, since
they handle much of the family spending. In the
process, the wives get detailed information on
company benefit and retirement plans so they can
help their husbands plan for the future.
Perhaps one of the most important new develop-
ments is the concept of "gradual retirement."
In a growing number of companies now, when a
man reaches retirement age, no longer is he auto
matically pushed aside. He can, if he wishes, go on
working on a systematically decreasing basis.
In the year after he reaches 65, he can work 11
months; the next year, 10; and in the following
years a lesser time until at the age of 68 or 70 it is
more to his advantage financially to retire.
Here is how the plan operates in a Chicago com
pany, one of the first to adopt it. A man earning
$4,800 annually can retire with a pension of $2,400
but if he wishes to stay on the job he may do so
for three more years. With 11 months' work in the
first year, his earnings will be $4,400. In the next
year, with 10 months' work, he'll earn $4,000. In
the third year, for nine months he'll get $3,600.
Now, when he retires at 68, because he is three
years older and therefore has a shorter life ex
pectancy, his pension is increased 26 percent to
$3,024 a year instead of $2,400. With his Social
Security benefits, his income now will be more
than he could earn by continuing to work.
Gradual retirement has advantages for both
company and worker. For the employer, it pro
vides a few extra years' service from skilled vet
erans. During months when the older men are off,
young men can try out on their jobs, and the com
pany can determine their ability.
For the older worker, gradual retirement satis
fies the ambition to go on working a little longer
and also helps to ease the adjustment to living
on less income. Moreover, it helps wean him away
from work while giving him gradually increasing
time to find other interests.
Still another significant new development cen
ters around what are called "semi-retirement"
plans. Their common aim is to put back ii.to
harness elderly workers who are unhappy when
turned out to pasture, but to make the harness
comfortable, to suit the employment to the years.
One of the first was started 10 years ago by a
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Sheboygan, Wis., machinery firm which opened a
small branch plant in Lake Wales, Fla. To Florida
from Wisconsin, the firm sends any retiring em
ployees who wish to go.
There, they can work just four hours a day,
morning or afternoon, as they choose. They can
buy homes, enjoy the climate and recreational op
portunities, and live well with their pensions sup
plemented by earnings from their half-time job,
and with the satisfaction of still doing useful work.
No longer experimental, the plan has delighted
elderly employees. Many who started half-time
careers 10 years ago are still happily engaged in
them. And the plan has proved profitable to the
company, too.
So well has it worked, in fact, that the Florida
branch plant has become a kind of "industrial
farm." From Wisconsin the company now sends
promising young employees to work alongside the
skilled elderly veterans, acquiring the knowledge
to do a better job when they return.
Says the company's president, "I think we're
going to see many industries setting up branch
operations in mild climates where they can utilize
highly skilled retired workers. When companies
retire people at 65, it's usually, because they figure
they aren't up to working full-time any more. By
letting them work four hours a day, you meet a
great personal need in their lives and also take
advantage of their skill and experience."
Another semi-retirement plan, also distinctive in
its way, was started a few years ago by a
Northern businessman who, after retiring to Holly
Hill, Fla., found he wasn't happy idle. He opened
(Continued on page 9)
Family Weekly, March 29, 1959 7