Working in retirement: Fantasy or reality?
To work or not to work? That is the retirement planning question. Let's take a closer look at this modern-day riff on the famous line in Shakespeare's "Hamlet," where Prince Hamlet laments about life's unfairness but reflects that the alternative (not being alive) could be worse.
Lately, many analysts and journalists have written about the necessity of older workers continuing to work in their retirement years and the financial advantages of delaying the start of Social Security benefits and delaying drawing down retirement savings. When polled, increasing numbers of baby boomers are saying they plan to delay retirement. For example, a recent report from the Transmerica Center for Retirement Studies shows that almost two-thirds (65 percent) of workers plan to work after age 65 or don't plan to retire ever.
In addition to surveys and reports, you may have also read glowing articles about people who work into their 70s and love it, such as the recent article in AARP The Magazine that cites statistics about the working-longer phenomenon and shows an inspiring picture of a happy older worker. Or you may have read that large numbers of older people are still physically able to work and that working longer is associated with an increased lifespan (though there's no conclusive proof of causation).
So what's not to like about the working-longer strategy?
A recent article posted on Slate put the kibosh on the idea, calling it "retirement porn" -- a fantasy for many people. The article cites depressing statistics showing why it's unrealistic for older people to continue working today due to a combination of health issues and age discrimination. It gives a few examples of blatant age discrimination against older workers, implying that this experience is the norm for older people seeking employment.
In addition, the oft-cited Retirement Confidence Survey from the Employee Benefit Research Institute reports that 49 percent of older workers left the workplace earlier than they had planned.
But wait! A recent report from Careerbuilder shows that 54 percent of employers hired mature workers in 2014, up from 48 percent in 2013, and that 57 percent of employers plan to do so in 2015. And the Transamerica study cited above reports that most employers have positive views of older workers, and that 88 percent of employers say they're in support of employees working past age 65 and delaying retirement.
By now, you might be a bit bewildered about the reality of working in your retirement years, but that shouldn't come as a surprise. The fact is, American society is in a transition phase as we try to figure out how to deal with the many older workers in the middle of a longevity revolution that's more than doubled the average length of retirement since 1950, according to the Stanford Center on Longevity.
In order to successfully navigate this transition, we'll need to negotiate some conflicting points of view:
- Some people will enjoy continuing to work and contributing to society in their older years, while others hate working and can't wait to retire.
- Many retirees report they're very happy, yet others say they're bored and lonely.
- Many people are physically able to continue working into their 70s, while others have had physically demanding jobs or debilitating medical issues, which will prevent them from working into their later years.
- Most older workers don't have the financial resources to generate a retirement income that's similar to their preretirement income, yet many retirees report that they're happy living on less income.
Fortunately, resolving these issues doesn't have to come down to a "one size fits all" answer. Instead, we'll have to embrace some ideas that might appear to be contradictory and are easier said than done. We'll need to accommodate the need or desire of older workers to continue working and, at the same time, build financial resources to enable people to retire when they're no longer able to work.
We'll need to recognize that there are numerous solutions to the challenges of an aging society. Some people will want to retire completely from their primary job, others will want to continue working full-time at their primary career, and others will want to transition into part-time or bridge jobs, or embark on encore careers.
Back to the similarities to Hamlet's eternal question. Yes, it might be unfair that many older people may need to work in their retirement years and that it might be hard for them to find work. But consider the alternative: The Stanford Center on Longevity says the average life expectancy in the U.S. increased by 30 years during the 20th century, an amazing accomplishment when you think about it.
So, we now have many, many more people today surviving to old age compared to 100 years ago. If not for this significant achievement, many of the older workers we're wringing our hands over would be dead. That means we have a nice problem to work on, when you consider the alternative. Somehow, we'll figure it out.
Steve Vernon
View all articles by Steve Vernon on CBS MoneyWatch»
Steve Vernon helped large employers design and manage their retirement programs for more than 35 years as a consulting actuary. Now he's a research scholar for the Stanford Center on Longevity, where he helps collect, direct and disseminate research that will improve the financial security of seniors. He's also president of Rest-of-Life Communications, delivers retirement planning workshops
and authored Retirement Game-Changers: Strategies for a Healthy, Financially Secure and Fulfilling Long Life and Money for Life: Turn Your IRA and 401(k) Into a Lifetime Retirement Paycheck.
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