How to Blend Work and Retirement
For many, retirement isn't a full stop. Contributor Mark Miller discusses how to plan for a phased retirement that includes work and shares useful resources.
Fred Dodd worked for large banks most of his career as a risk analyst, but last year he was the victim of a corporate restructuring. At age 63, he considered retiring.
"But part of me just wanted to keep working-- partly for the money, but more just because I felt I wanted to do more in my career," he says.
Dodd, who lives in the Boston area, started hunting for a full-time job in his field, and also explored branching out to work in nonprofit, higher education, or biotech, but he wasn't finding much.
"It's always hard to know if it's age discrimination, but I did feel that there was hesitancy to take on someone at my age," he says.
Instead, Dodd settled on a different approach, signing up with Flex Professionals, a firm that matches up seasoned professional workers with companies who need part-time help. Dodd was placed with a small investment advisory firm. Now 65, he is working full-time hours there, but probably will soon move to more project-oriented work requiring fewer hours. That suits him fine.
"At first I was eager to find something with good pay and benefits that would let me get back in the saddle," he recalls. "But another part of me was ambivalent; do I really want to sign up for that again?"
Working longer can be a great way to boost your retirement security, or just stay engaged. But Dodd's story points to an important element of any plan to keep working: It doesn't necessarily require keeping your nose to the grindstone full-time--or even sticking with the same grindstone.
Leaving behind full-time work and the associated employee benefits becomes easier at age 65, when you qualify for Medicare. And that's what many older Americans say they aim to do. A recent report by the Transamerica Center for Retirement Studies found that 64% of workers of all ages envision a phased retirement involving continued work with reduced hours. For workers closest to retirement, frequently cited reasons for continued work included financial need (34%) and a desire for income (19%). But 34% had a desire to "stay involved" or said they simply enjoyed their work.
But how exactly to pull that off? Few employers have established structures for phased retirement. A survey of human resource professionals by the Society for Human Resource Management revealed a short-term mindset along with a lack of urgency among employers in assessing and planning for aging workforce. A report last year by the U.S. Government Accountability Office confirmed that formal phased retirement programs remain "relatively uncommon." The programs that do exist are found among employers with larger or technical and professional workforces, or those experiencing labor shortages.
Most often it's up to older workers to beat a new pathway to a blend of work and retirement, says Kerry Hannon, a writer and speaker who is an expert on careers and entrepreneurship.
"This is a time not to be caught up in the linear idea of work that you may have had in your primary career," she says. "This is work as a patchwork quilt where you weave a little of this and a little of that. You might do one thing for a few years and shift to something completely different, or you might do a couple of different types of work at the same time."
Working for pay in retirement--either part-time or on a contract--offers many benefits that go beyond money, Hannon adds.
"Yes, being paid for work is important; it makes our work feel valued and appreciated, even if it is less than we earned in our primary career," she notes. "But it is the actual work itself, having somewhere to go, giving back, adding value to the world around us that is at the heart of it, and it’s hard to put a price tag on that intangible benefit of work."
Demand for consultants and part-time employees seems to be on the rise as the nation's labor market tightens. The evidence is anecdotal so far, but some reports suggest employers are becoming more open to unconventional work arrangements.
Flex Professionals, which helps place part-time workers in Boston and Washington, D.C., was started by a group of working mothers who were having difficulty finding meaningful part-time work.
"As it evolved, retirees started to be a more important part of our candidate base,people wanted to scale back, perhaps volunteer or travel," says Gwenn Rosener, the firm's founder.
Rosener reports that 25% of the workers the firm placed this year are over age 55, up from 20% last year. And 6% of workers placed this year are over age 65.
"We're placing a lot more people over 60 than we used to," she adds.
Most of Rosener's clients are small businesses that don't necessarily need or can't afford full-time staff to fill a given position. The biggest areas of demand are executive-level business functions or people with very special areas of expertise.
"We recently had one defense company tell us they wanted to look at any engineer we could find who could work more than 20 hours a week," she says.
One website that specializes in placing independent workers, Freelancer.com, reported recently that the fastest growing categories include jobs related to business functions, such as networking technology, writing positions, and engineering.
Ready, Get Set, Blend
Experts who work frequently with older workers recommend several tactic steps to get ready for a blended retirement.
Plan ahead. Dorian Mintzer, a retirement coach, speaker and author, recommends getting started while you're still working. "Do a careful assessment of your skills, and which might be transferable to new work? And what is the work that speaks to your heart?"
Polish your skills. The Transamerica Center for Retirement Studies survey asked workers what steps they are taking to ensure they can continue working past age 65 or in retirement, 62% said they are staying healthy so that they can continue working, and 56% say that they are focusing on performing well at their current jobs. But only 46% said they are keeping their job skills up to date, and just 21% are networking and meeting new people, 18% are scoping out the employment market, and just 13% have gone back to school to learn new skills.
"Those numbers prompt a tough love question," says Catherine Collinson, the center's CEO. "The world is changing so fast and the labor market is so competitive, it's imperative that we keep skills up."
Be discreet. Collinson adds that it's important to do your homework with discretion if you're still working full time and thinking ahead to a blended retirement.
"You don't want to tip your hand that you're thinking of retirement," she says. "If becomes widely known at work that you're thinking of retirement, people will think you're on the way out the door even though you may not be. Once that genie is out of bottle, it's very difficult to put it back."
Similar to Flex Professionals, YourEncore recruits and deploys teams of part-time consultants with expertise in life sciences and consumer goods.
Several websites specialize in job listings for older workers.RetirementJobs.com lists jobs for workers over age 50 and provides information on more than 100 age-friendly employers. RetiredBrains.com lists jobs and provides a wealth of other retirement-related advice and tips. Others worth checking out include Seniors4Hire, Retireeworkforce and Workforce50.
Written by Marci Alboher of Encore.org, Encore Career Handbook: How to Make a Living and a Difference in the Second Half of Life, gets into the nuts and bolts of launching a new phase of work focused on purpose and social impact.
Great Jobs for Everyone 50+ by Kerry Hannon offers career ideas and job-hunting advice.
Morningstar columnist Mark Miller is a nationally recognized expert on trends in retirement and aging. He also contributes to Reuters, WealthManagement.com, and The New York Times. His book, Jolt: Stories of Trauma and Transformation, was published in February by Post Hill Press. The views expressed in this article do not necessarily reflect the views of Morningstar.com.