By KARIN RIVES
RALEIGH NEWS & OBSERVER

(SH) - For months, David McGehee pondered how to break the news to his boss.

After 25 years with Progress Energy and a long career as an auditor and project analyst with the electric utility, he was thinking of calling it quits.

It shouldn't have come as a surprise to anybody, really. McGehee has been eligible for his employer's retirement benefits for nearly three years.

But it was still a big, and emotional, step he took that day in June when discussing his pending departure openly for the first time. His company expects soon-to-be retirees to give only three months' notice, but McGehee - who has not yet set a retirement date - thought his manager deserved more time.

He knew that long-term assignments would come up and some duties would be shifted around. McGehee wanted his boss to know that from now on he couldn't be counted on in the same way.

In coming years, millions of workers will be preoccupied by two big questions: when and how to retire. In 2008, the first members of the 77.5 million-strong baby-boomer generation turn 62 and become eligible for partial Social Security benefits, beginning an unprecedented exodus from the job market.

Whether they're financially ready is just one of many considerations future retirees face as they prepare for that next chapter of their lives.

There will be the strain of having to say goodbye to co-workers they may have known for decades. There may be anxiety knowing that they must hand over projects, customers and clients to somebody new. There will be concerns about benefits that end with retirement; what to do with a 401(k) investment and how to get affordable health care, for example.

Perhaps most importantly, these boomers must figure out what to do next. A whopping 79 percent of them plan to work at least part time after they retire from their main job, according to the AARP. Many will choose to work because they need a sense of purpose.

"I think the emotional aspect of retirement is overlooked," McGehee said.

Walks and taekwondo classes help McGehee stay in shape and keep his stress under control. He's also busy planning his second career as a part-time financial consultant, which will help supplement his reduced retirement income.

McGehee recently attended a retirement seminar that Progress Energy offers employees 54 or older. He was relieved by some of the things he heard.

Monthly health insurance costs, for example, would rise about $100 for him and his 19-year-old son under the plan his company offers - far less than he had envisioned. That had been a concern for McGehee, who is still seven years away from qualifying for Medicare, the government's health-care system for seniors.

Progress Energy may soon have additional workers facing tough questions about retirement. The Raleigh, N.C.-based company said last week that it needs to cut costs, and is considering offering early-retirement packages.

As the nation's work force ages, each employee who nears retirement age will likely face different issues.

"I've reached the point where there are aspects of work that I really don't like," said Sheldon Hanft, a 65-year-old history professor at Appalachian State University in Boone, N.C., who will retire in December. "If I never had to grade another student paper, I would be happy. That tells me it's time."

He is longing to finally write the book on Jews in the South that he has been researching for years. He is also tired of working, having done so without interruption since he began helping out in his family's candy store at age 8.

Hanft and his wife, Beryl, are wrestling with another question that will be on many workers' minds in coming years: whether to uproot or stay. With Beryl in a wheelchair after a spinal-cord injury, they would like to get away from snow and ice. But moving could be a costly proposition.

The Hanfts, like many in their generation, also worry about the future of their children and grandchildren.

So the couple has decided to divert as much as 15 percent of their stock and annuity investments to set up a college fund for their four grandchildren. Originally, that money had been earmarked for their retirement days.

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