Here at AgingOptions we’ve reported several times (most recently in recognition of Labor Day 2019) about the disconnect between intentions and reality as people facing retirement think about work. Many surveys have shown that men and women are generally too optimistic about their ability to keep working in retirement, or about their hopes to phase into retirement by gradually cutting back their hours. The point of these stories has been to warn future retirees not to count on income from part time work, because that income may never materialize.
Working in Retirement: Things May Be Changing for the Better
However, the landscape may be shifting a bit, based on this article we just read on the NextAvenue website, written by author Kerry Hannon. She cites recent research that appears to show more retirees are achieving their hopes of either a “soft landing” when it comes to quitting work or a greater ability to work a more flexible, less demanding schedule. “For years,” she writes, “many workers nearing retirement have professed plans to work part-time during retirement. But few retirees have actually continued working part-time.” However, Hannon adds, “A recent survey of pre-retirees and retirees shows that the gap between planning to work in retirement and doing so has narrowed.” As an expert in retirement and personal finance, she confesses to being “a little bit surprised and more than a little pleased to see the results.” Her conclusion: when it comes to working in retirement, “Things are changing.”
The survey to which Hannon’s article refers was released in mid-August, conducted by an organization called LIMRA, formerly the Life Insurance and Market Research Association. In the study, which you can access here on the LIMRA website, the group surveyed people between the ages of 55 and 71 who said they either were planning on retiring within two years or had been retired for two years. The purpose was to gauge the difference between the expectations of pre-retirees and the actual experience of those already retired in the area of work. The survey showed that about 1 in 5 adults do continue working in retirement, and a growing number appear to find their pre-retirement hopes actually being successfully realized.
Working in Retirement: Scaling Down Hours and Shifting Responsibilities
“There was a time when someone would circle a date on their calendar to mark when they would stop working altogether and begin retirement,” says the LIMRA study. “Things have changed. Today retirement is better defined as a transitional period rather than a singular point in time.” The report shows that many workers are able to extend their years in the workforce and boost their retirement savings by adjusting gradually to retired life – “scaling down the number of hours they work, shifting responsibilities or changing what they do entirely.” The survey found that 56 percent of pre-retirees said they were planning to stop working entirely, compared with about 64 percent of retirees who had actually stopped work all at once. The number of pre-retirees who hoped to reduce their hours gradually – about one in 6 – matched the experience of the retired group almost exactly. Only among those who hoped to keep working part-time was there a significant disconnect: 27 percent of those about to retire said they hoped to keep working part-time with no plan to stop, when in actuality the number of retirees successfully working part-time was just 19 percent. Presumably those not working either changed their plans or couldn’t find jobs that suited their abilities and desires.
The reasons to keep working cited in the LIMRA study were pretty much what one would expect. The top three benefits of work according to the survey respondents were financial security (cited by 32 percent), personal enjoyment (19 percent) and intellectual engagement (14 percent). “With a 50-year record low unemployment rate, employers who make it easy for retirees to work for them may benefit from their experience and expertise,” the LIMRA study observes. Companies may need to adapt to the needs of older workers by offering more flexible benefits programs, for example, in order to improve recruitment and retention.
Working in Retirement: Expectation and Reality Becoming More Closely Aligned
In the NextAvenue analysis of these figures, Kerry Hannon explains why she thinks the gap between expectation and reality when it comes to working in retirement is narrowing. “There are, I think, three big reasons why previous studies showed a much higher percentage of pre-retirees planning to work in retirement than the percentage of retirees who were working part-time. First, pre-retirees have been overly confident and optimistic about their desire or ability to work part-time in retirement. Second, health challenges frequently prevent retirees from working in retirement. Third, people in their 60s and 70s have typically had a hard time getting hired due to age discrimination.” But as the LIMRA report showed, in today’s tight labor market, older workers are finding a much more receptive environment – so much so that the Bureau of Labor Statistics has estimated that 30 percent of Americans 65 to 74 will be in the workforce by 2026, compared with just 17 percent in 1996. Some experts even think the number of boomers in the labor force is under-reported because many “are working part-time off-the-books, so they’re not counted in the government’s labor force figures.”
For All Aspects of Retirement, Our Advice Is: Don’t Wing It – Plan It!
Hannon ends her NextAvenue article with this important advice: “If you plan to work in retirement, don’t wing it.” Start preparing yourself early by keeping your skills sharp, learning new ones, and keeping your network of potential references active. This is very similar to the advice we give when it comes to retirement planning in general. Too many people try to wing it in retirement, thinking that a basic financial plan is all they’ll need, only to find out the hard way that money alone can never guarantee retirement security and satisfaction. In order to build the type of retirement you’ve hoped for, you need a plan that encompasses all the critical elements of retirement living: financial security, housing strategy, medical protection, legal preparation and family communication. These elements blended together comprise what we call a LifePlan, and only AgingOptions offers it.
Why not accept our invitation to find out more, without cost or obligation? Join Rajiv Nagaich for a free LifePlanning Seminar, where in a very short time you’ll get many of your questions answered about this retirement planning breakthrough. You’ll find a calendar of seminars here on our Live Events page – then simply register online for the date and location of your choice or contact us by phone. It will be our pleasure to meet you and to show you the power of a LifePlan from AgingOptions. Age on!
(originally reported at www.nextavenue.org)