Is Retirement Changing?

It used to be that retirement went something like this:

• You worked at a company (or series of them) for 40 years or so
• At some point, the person retired -- stopped working altogether
• Some combination of the company, the person, and the government (SS) combined to provide for the retiree's post-work income

But perhaps the face of retirement is changing. Consider these facts I found on a recent piece in my local paper:

• 31 percent of those 50 and older say they would be bored not working.
• 75 percent of workers 50 and older say they are interested in phased retirement, though few workplaces offer it.
• 18 percent of those of retirement age say they work to contribute and be productive; 53 percent say they are working for the money.
• 15 percent have a job they say is fun and enjoyable.
• 32 percent of working retirees made about the same or more than they did before.

My take on these:

• I think I would be bored by complete retirement as well. I'm either going to work part-time, develop some side projects (more FMF!), or volunteer with some organizations I like.
• Hmmmm. Sounds like the idea of early semi-retirement is catching on.
• While some people want to keep working to avoid boredom, many more (the majority) want/need to work simply to keep money flowing in. Not a surprise given the state of most Americans' retirement savings.
• Since "15 percent have a job they say is fun and enjoyable", does this mean that 85% dislike their jobs? If so, that's a big "ugh".
• Yes, income is likely to go down in retirement. Actually, I'm surprised that so many retirees (one-third) made the same or more than they did while working. 

Anything in these facts that stood out to you?

Comments

[JM]

FMF, there's a big difference between not finding work "fun and enjoyable" and outright "dislike" of a job. I'm pretty sure most people don't think of their work as fun, but they don't dislike their work either.

[DIY Investor]

I get nervous when clients say they just want to lay around and enjoy not having to go to work in retirement. Secondly, from a financial planning perspective it is a huge swing from working an extra year and contributing to the nest egg and retiring and drawing down on that nest egg.

[Michele]

Of course retirement is changing, because WORK is changing. In fact, work has already changed in tremendous ways.

Once upon a time - not so long ago - there were many more people in jobs that were physically exhausting. Not in a 'gee, I'm tired at the end of the day' kind of way, but a 'I can not physically do my job any more due to my age and related health concerns.' Of course these people retired completely once they left the work force. Often times - they HAD to. Additionally, people typically landed in these types of jobs as a result of circumstance as opposed to having chosen them because they enjoyed the work and found it fulfilling. This notion of deriving pleasure and fulfillment from your profession is really a relatively new one and was a luxury for people of limited means and education. I bring this up only because it's a hell of a lot easier for someone to completely check out of the work force when they never felt particularly invested in the work they were doing in the first place and were simply putting in their time, WAITING to retire.

Between the fact that people simply live longer, enjoy a higher quality of life in old age, actually LIKE the work that they do, and can often do them from anywyere, OF COURSE more of them are continuing to work well beyond the age we typically associate with retirement.

[frodo]

I'm retiring as soon as I can. As much as I enjoy my work, I can think of about 1,000 things that I enjoy even more.

[Josh]

It really makes me sad to see our retired generation have to work. Our retirement savings programs have obviously failed us. The stock market is not reliable, 401k's are not entirely reliable, and mutual funds are a mess. Life Insurance people. That is the answer.

[LotharBot]

For most of human history, you'd work in a trade (possibly at a company) for most of your life, and then keel over and die. If you were very lucky, in your old age, your family would have the resources to take care of you while you were unproductive. From what I can tell, the idea of a "retirement age" of 65 came in with Otto Von Bismarck in the late 1800s, and became the expectation in the US in 1935; in both cases, only a small percentage of the population lived to age 65.

As life expectancy has crept up, we've created the scenario that "used to be" only for a short part of human history: that you'd work for 40 years, and then someone else would pay for you as you lived out another 10 or 20 years, and that was the case for the majority of the population. Not surprisingly, we're beginning to shift away from that as people find it's not all it's cracked up to be. Many find the paid-for-by-others, no-work lifestyle is mediocre, boring, or simply that there's not enough money to do what they want to do. So they want to keep working, maybe part time, or find fulfilling volunteer opportunities. And we act like this is some sort of big surprise.

I fully expect to be productive even in old age, though I doubt I'll need the money. I don't know if it'll be a job, volunteer work, or freelance work, but when I reach retirement (for me, "the age at which the kids all move out") I'll be doing *something* interesting.

[Joe]

I think I have to agree with Michele. Retirement was, I think, a humane way to keep people who were unable to work afloat so they wouldn't die in squalor from not being able to work anymore. But that's not how we think of it at all today.

[Strick]

I guess "retirement" is changing, I dont understand how there could be such thing as a "working retiree".

Is that the same thing as semi-retirement?, or someone in a second career who is over the age of 60 (or 40 for military, or 50 for teaching)?, or someone who is collecting social security and/or pension at the same time as making earned income?, or someone who works after acheiving financial independence?....

[FMF]

Strick --

Yes, semi-retirement is someone who is working part-time, but the posts I covered on the issue mostly dealt with people doing it "early" -- like at 40.

Here's an example:

http://www.freemoneyfinance.com/2010/11/real-life-case-study-how-to-take-early-semi-retirement-part-1.html

[Strick]

Thanks FMF! My plan is to be a working retiree at 43 (though I always just thought of it as acheiving a more reasonable work/life balance than the norm).

My guess is, of the 85% of those that dont find their job "fun and enjoyable" (which is a pretty tough standard if we mean most of the time), a large percentage would at least 'like' their job as long as they didnt have to spend the overwhelming amount of time they have to devote to it. I don't think I'd find Disneyland "fun and enjoyable" if I had to do it 50 hrs/week ;-)

[Sunil from The Extra Money Blog]

good post FMF - one that revisits the idea of living life on your own terms (semi - retirement). what's the point of prolonging / delaying the good stuff later when there is a chance that you are physically limited (get tired fast, have bad knees, bad back, etc). love the concept of semi retirements / multiple retirements.

[Old Limey]

I worked for my final employer, Lockheed Missiles & Space Co., from 11/60 until 9/92.
I have nothing but great things to say about the company during my tenure.
We had a 401K with a generous company match.
A great retirement plan that in my case gave me a pension equal to 40% of my final pay.
A great choice of healthcare plans funded by the company.
The company paid all the tution for me to get my MS degree and allowed flexible hours and work week for all salaried workers that made it easy for me to attend my classes.
After 30 years service employees and their dependants could stay in the company group insurance plan which we both use to this day.
Vacation started at 2 weeks and increased one week every 5 years up to a maximum of 5 weeks, vacation could be accumulated.
Fourteen sick days were allocated every year and these could also be accumulated.
The company had a heart and did its utmost to reassign laid off workers.
The atmosphere at work was great. In my case, the assignments were challenging and satisfying and I received good raises every single year as well as several promotions.
When I retired I received a Golden Handshake of 32 week's pay that I used to pay off our mortgage balance.

Things changed after I left and the company merged with Martin to form Lockheed/Martin, the pension plan soon disappeared for new employees, and the "Good Old Days" started coming to an end.
Part of the reason was the ending of the Cold War and the reduction in defense spending, but things started getting tougher for employees in a lot of companies round about the time I retired.