{"id":7751,"date":"2019-09-22T08:07:36","date_gmt":"2019-09-22T12:07:36","guid":{"rendered":"https:\/\/kerryhannon.com\/?p=7751"},"modified":"2019-09-22T08:11:07","modified_gmt":"2019-09-22T12:11:07","slug":"why-working-in-retirement-is-a-reality","status":"publish","type":"post","link":"https:\/\/kerryhannon.com\/?p=7751","title":{"rendered":"Why Working in Retirement is a Reality"},"content":{"rendered":"\n

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For years, many workers nearing retirement have professed plans to work part-time during retirement. But few retirees have actually continued working part-time. Things are changing.<\/p>\n\n\n\n

A recent survey of pre-retirees and retirees shows that the gap between\u00a0planning to work in retirement\u00a0and doing so has narrowed. I have to confess I was a little bit surprised and more than a little pleased to see the results. Let me share with you what the researchers found and what retirement analysts say is going on.<\/p>\n\n\n\n

Findings of a Survey of Retirees and Pre-Retirees<\/h3>\n\n\n\n

The LIMRA Secure Retirement Institute surveyed recent retirees and pre-retirees <\/a>(ages 55 to 71) who\u2019ve retired within the past two years or plan to retire in the next two years and had at least $100,000 in assets. Among the pre-retirees, 27% said they plan to work part-time in retirement and 17% said they expect to gradually reduce their hours before stopping work entirely. Among the retirees, 19% are working part-time and 17% have reduced their working hours.<\/p>\n\n\n\n

\u201cThe closer you are to retirement, the more accurately you can predict what you are going to do. You\u2019re also more likely to have been planning for it.\u201d<\/p><\/blockquote>\n\n\n\n

The study found an interesting gender distinction, too: a quarter of the female recent retirees phased into retirement, while just 16% of male recent retirees did. Men may be less likely to phase into retirement than women because it\u2019s harder to do so due to their pre-retirement job functions, the LIMRA researchers noted; 23% of the retired men surveyed worked in managerial job functions before retirement compared with 13% of women.<\/p>\n\n\n\n

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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.<\/p>\n\n\n\n

First, pre-retirees have been overly confident and optimistic about their desire or ability to\u00a0work 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.<\/p>\n\n\n\n

So, what\u2019s going on now?<\/p>\n\n\n\n

\u201cThe numbers are in good alignment because the pre-retirees were two years or less from retirement. So they had a pretty good idea what they were going to be doing,\u201d said Alison Salka, director of LIMRA and LIMRA Secure Retirement Institute Research. \u201cThe closer you are to retirement, the more accurately you can predict what you are going to do. You\u2019re also more likely to have been planning for it.\u201d<\/p>\n\n\n\n

Why People Work Part-Time in Retirement<\/h3>\n\n\n\n
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Catherine Collinson<\/figcaption><\/figure>\n\n\n\n

Salka said the top three primary reasons for continuing to work among employed recent retirees are: for spending money, because they enjoy their work and to stay intellectually engaged.<\/p>\n\n\n\n

Catherine Collinson<\/a>, CEO and president of the nonprofit Transamerica Institute and Transamerica Center for Retirement Studies (and a Next Avenue Influencer in Aging), told me she found it \u201cencouraging that the gap between pre-retirees\u2019 vision of transitioning into retirement compared with the experience of recent retirees is finally starting to close.\u201d<\/p>\n\n\n\n

Working at least part-time in retirement is a good thing for many retirees, Collinson said.  \u201cIt enables them to earn income, continue saving for retirement and bridge savings <\/a>shortfalls \u2014 with more free time for personal pursuits,\u201d she noted.<\/p>\n\n\n\n

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The Savings Shortage<\/h3>\n\n\n\n

Many 50+ workers haven\u2019t saved enough to fully retire at the traditional retirement age of 65, Collinson explained. According to Transamerica, the estimated median total household savings in all retirement accounts <\/a>among the semi-retired is $216,000. \u201cIt will be difficult, if not impossible, to make these savings last a retirement of twenty-five or more years,\u201d Collinson said. And with every passing year, the percentage of retirees with pensions is shrinking, adding to the need by some new retirees to work part-time.<\/p>\n\n\n\n

Collinson\u2019s theory on why the working-in-retirement gap of wish and reality narrowed in the LIMRA report: \u201cThe labor environment is becoming more conducive to workers extending their working lives and pre-retirees planning a transition to retirement.\u201d  In today\u2019s tight labor market, employers are increasingly hiring older Americans to work part-time in retirement.<\/p>\n\n\n\n

The Gig Economy and Retirees<\/h3>\n\n\n\n

By 2026, the Bureau of Labor Statistics estimates, the labor force participation rate of Americans age 65 to 74 will grow to about 30%, compared with roughly 17% in 1996.<\/p>\n\n\n\n

\u201cWith the proliferation of the\u00a0gig economy\u00a0and the digital marketplace, it\u2019s easier than ever for experienced professionals to do freelance and consulting work, although it still requires careful planning and preparation,\u201d Collinson said.<\/p>\n\n\n\n

Bingo.<\/p>\n\n\n\n

In fact, demographer Peter Francese recently told Barron\u2019s that he believes the current figures on boomers in the labor force are understated<\/a>. Many people in their 60s and 70s, he said, are working part-time off-the-books, so they\u2019re not counted in the government\u2019s labor force figures.<\/p>\n\n\n\n

Advice for Working Part-Time in Retirement<\/h3>\n\n\n\n

My bottom line: if you plan to work in retirement, don\u2019t wing it.<\/p>\n\n\n\n

You need to start planning a few years ahead of time. You might need to\u00a0add some employment skills, or at least keep yours up-to-date.<\/p>\n\n\n\n

It\u2019s a good idea to network with people you know at employers where you\u2019d like to work in retirement and that hire part-time workers.<\/p>\n\n\n\n

If you want to\u00a0start your own business\u00a0as a consultant or launch an entrepreneurial effort, you\u2019ll want to gear up gradually by doing your market research, getting financially fit and laying the necessary groundwork. (Shameless plug: My new book on midlife entrepreneurship,\u00a0Never Too Old to Get Rich<\/em>, includes stories of people who\u2019ve launched businesses as their second acts, with their advice for others.)<\/p>\n\n\n\n

By Kerry Hannon,<\/a> Entrepreneurship and Personal Finance Expert<\/p>\n\n\n\n

Next Avenue also has many stories on working part-time in retirement, including this blog post I wrote, \u201cHow to Keep Working Into Your 60s and Beyond<\/a>.\u201d The RetirementRevised.com podcast<\/a>, Working After 50, has been running a series on the subject, too.<\/p>\n\n\n\n

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By Kerry Hannon <\/a>is the author of Never Too Old to Get Rich: The Entrepreneur’s Guide to Starting a Business Mid-Life<\/em><\/a>. She  has covered personal finance, retirement and careers for The New York Times, Forbes, Money, U.S. News & World Report and USA Today, among other publications. She is the author of a dozen books including Money Confidence: Really Smart Financial Moves for Newly Single Women<\/em><\/a> and What’s Next? Finding Your Passion and Your Dream Job in Your Forties, Fifties and Beyond<\/em><\/a>. Her website is kerryhannon.com<\/a>. Follow her on Twitter @kerryhannon<\/a><\/p>\n\n\n\n

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