Older Americans are showing no sign of slowing down.
According to a recent Pew Research Center Study analyzing federal employment data, the number of individuals 65 or older working full or part-time jobs has been continuing to increase. This new trend doesn’t seem to be disappearing any time soon, and could have huge implications on the way that Americans spend their golden years.
Due to the longer life expectancy of the population, the average length of time spent in retirement has more than doubled since 1950, according to data from the Stanford Center on Longevity. This has left American society in a transition phase, struggling to keep up with the many older workers in the middle of a “longevity revolution”.
Many refer to this trend in the 65 plus working population as “semi-retirement,” a phase where retirees choose to continue working. Another trend is taking a “gap year” to ease into the retirement lifestyle. That’s right, gap years aren’t just for pre-college students, such as Malia Obama. The new gap year is taking time after a long, hard career in the workforce to focus on activities that bring you joy.
No matter what you coin it, these years are when careers end but the work doesn’t. Some retirees elect not to hang up their working hats because holding a job brings them pleasure. In fact, one in five working retirees cite enjoyment, not income, as the reason they choose to work.
One of the best examples of this phenomenon that I’ve personally seen is from a client of mine. Although he is of the typical retirement age, he continues to work at a hardware store by the beach in New Jersey during the summers and also teaches skiing lessons in Colorado. This work is satisfying and keeps him active and healthy–– the added income is an added bonus.
In another similar case, The New York Times shared the story of Judith Lister, a 71-year-old kindergarten teacher in Pahrump, Nevada. Consistent with national trends, Ms. Lister remains a member of the workforce as she preps for her incoming class of new students this fall. In fact, she hopes to continue teaching for the next three years. “It [teaching] keeps my brain engaged,” said Listen. “It connects me to a younger generation.”
However, other older Americans choose to continue on in the workforce for primarily financial reasons. U.S. News and World Report attributed this in part to the 2008 recession and low interest rates negatively impact the financial accessibility of retirement for some.
There is also the fact that the transition to retirement, for many, is the last major “page turn” in life. After marriage, children, job changes, and empty-nesting, the abrupt transition from a full work week to a barren one can incite restlessness. Gap years or semi-retirement, on the other hand, allow a compromise between the two, and a smoother transition period into the golden years.
We know older Americans continue to wait longer before clocking out for good, but what jobs are they actually working?
Pew reports, “Older workers are more likely to be in management, legal and community/social service occupations than the overall workforce, and less likely to be in computer and mathematical, food preparation, and construction-related occupations.” Some working retirees remain in the same career, take on a different job, or scale back working hours to meet a part-time schedule; regardless, The Atlantic calls these retirement jobs or ventures “encore” careers.
When it comes to retirement, it’s not a one-size-fits-all answer—there are numerous solutions for the 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. What’s key for this demographic is to understand where you are today, and where you want to be in the future.
How are you going to spend your golden years?
Nobody can predict everything in retirement, but worrying about ending a career or starting over part-time in a field you’re passionate about are important considerations to factor in as you make your plans. Instead of worrying about being left in the dark, find a good financial partner that can help shed light on all the aspects that make for a successful and fulfilling retirement transition.
About Cordasco Financial Network: CFN is an independent Registered Investment Advisory firm focused on bringing value to clients beyond choosing and managing the right investments. Whether it’s retirement, owning a business, or pre-retirement planning, CFN creates clarity and comfort while providing financial guidance. To learn more please visit http://cfnplan.com/.