Tuesday, February 21, 2012

Easing into Retirement

Photo by s_falkow
Very few baby boomers will move into full retirement directly after of forty years at the same company. Changes to our economy have made the relationship between employer and employee more fluid. More employers are hiring subcontractors, part-time employees or temporary workers.

Older workers are enjoying better health and they are working more often in the service industry—which is less physically demanding than the agricultural or manufacturing jobs that their grandparents worked. Consequently, they have the physical capacity to work into their seventies. The Bureau of Labor Statistics reports that the percentage of increase in older workers between 1977 and 2007 rose 85% for those 65-69, 98% for those 70-74 and 172% for those 75 and older.

If older workers are not taking full retirement and a pension at age 65, what kind of paths are they taking late in their career? There are a variety of terms used by economists and senior lifestyle writers to describe the changing work styles of older adults, some of which overlap. Here are some of the types of career paths workers 50+ might be taking:

Extended Career / Delayed Retirement. Working full-time for the same company in one’s primary career—but working past the employee’s prior expected retirement deadline.

Phased Retirement. Working part-time for the same company

Job Sharing. Splitting the salary and benefits of a full-time job with another employee, either by splitting hours of a day, days of the week, or weeks of the month.

Second Career. After age 44, working for 10 or more years at another career in a different field.

Encore Career. After 50, working for 10 or fewer years in a job that is more about following a passion and serving others than it is about commanding a high salary or gaining power and status.

Bridge Job. After retiring, moving at age 50+ into full-time or part-time work in a new career for less than 10 years.

Temporary Work. Working for just weeks or months at a time for one’s previous employer or for a new employer.

Volunteer Work. Working without pay as a way to structure one’s day, to find purpose, to strengthen the larger community, and to engage socially with others.

The financial needs of older adults have also changed. Rare are retirement pensions based on defined benefits. The volatility in the stock market has shrunk many defined contribution retirement savings. These changes leave older adults with inadequate retirement funds.

Older workers are spending money on their kids. Many older workers delayed having children while they pursued education and established themselves in careers. Workers in their fifties and sixties are supporting children at home or in college when previous cohorts of older workers were building up retirement savings during these decades of life. And the rising cost of medical care keeps older workers looking for benefits or even just salaries to meet the premiums, co-pays and deductibles.

Some older workers find themselves laid off from their primary job and struggling to be rehired in the same field with the same salary requirements. Other workers suffer health problems that may make their original career unsuitable. These situations often invites them to consider other types of work.

Older adults and their employers have a rich and complex dynamic in today’s workplace, making for interesting possibilities and more choices. Older workers may not be attending a grand party and receiving a gold watch anymore. Yes, this type of immediate, full retirement was less ambiguous. But it often triggered an identity crisis of grand proportions. Now, older workers have more choice in how they renegotiate their relationship among self, employer and society. They can explore different work identities, and they can ease into retirement.

Don't Retire, Retrain: Decreasing the Dependency Ratio
Encore Careers: Live to Work Instead of Work to Live

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