Will You Be Able to Work in "Retirement?"

There's lots of debate on the issue of working in retirement (which is kind of an oxymoron -- how can you be retired if you're working?) One side says that you should be able to work part time after you officially retire to help supplement your savings and extend your next egg. The other side says that while the idea is nice, you can't count on working later -- your health simply may not hold out.

Here's a piece from MarketWatch that contrasts these two views and why each of them have their valid arguments. We'll start with why people can work longer:

According to a recent Boston College Center for Retirement Research study, the bulk of older Americans should be healthy enough to work full-time until their mid-60s. The health of older workers is at least as good today as it was 40 years ago and jobs are less physically demanding than in the past. That, the study says, bodes well for Americans working longer.

And as a side note, I found this very interesting:

By the way, older workers who want to know whether they'll be among those who can keep working or not should check out their body mass index. Apparently, there's a strong correlation between being overweight and taking Social Security early, at age 62, according to a recent University of Michigan Retirement Research Center study.

Hmmmm. Not surprising.

Now, the opposite side of the argument -- but with a twist. Usually this side says you can't guarantee your health will hold out so you shouldn't plan on working in retirement. But this time they have a new angle:

More than one in four U.S. businesses has failed to plan to hire or retain older workers, according to a recent Boston College Center on Aging & Work/Workplace Flexibility study.

Consider: only four in 10 firms have adopted policies to encourage late-career workers to stay past the traditional retirement age, six in 10 employers say recruiting competent job applicants is a significant human-resource challenge and four in 10 employers say that management skills are in short supply in their firms.

This is a new one to me -- that employers won't be hiring older workers. But the piece does go on to say that many employers are in the process working on the issue and many expect that they'll develop options to hire and retain older workers.

As for me, I don't want to take the risk that I won't be able to work in retirement and as such I'm saving like a madman so I won't have to work. I would like to keep active, maybe volunteering and the like, but I don't want to have it forced upon me simply because I didn't save enough during my working career.

Comments

[Anitra]

It's definitely a problem for people currently nearing retirement. I've seen a number of people in their 50s and 60s be forced into "retirement", when they wanted to keep working. I've seen even more in their 40s and 50s get laid off; they usually have a very hard time finding a new job in the same field, and so they have to retrain for a new career and take a big pay cut, when they should be in their prime.

I think younger workers are generally more prepared for these possibilities, since we didn't enter the workforce thinking we would work for one company for 30 or 40 years.

[Lord]

It is less a question of whether you can work than whether you will want to once you find out what kind of work someone will hire you for. Many companies discriminate against older workers, particularly in any lucrative position. Even executives know this is true. Just try proving it though. If you are content working as a security guard, custodian, or other menial job that few others want, then you shouldn't have any problem. The higher up you are or more desirable a position, plan on not working unless you are self employed.

[db]

It's called age discrimination, and it's a very real problem. Frankly given what I've seen I've factored into my plans the possibility that in my 40s, 50s or 60s I'll be laid off and essentially forced into a lower-paying job because I can't get rehired. Because of that I want to leave my 40s as debt-free as possible, not to mention with a chunk of retirement money set aside already.

The other thing I've seen at companies I've been at where there is still a pension, is definately laying people off after 20+ years of service just prior to that golden anniversary date where they would qualify for full pension benefits (aka, a long-term annuity benefit).

db