Are you planning to work in retirement? If so, is it because you need money? The recent American Working Conditions Survey (AWCS) from the Rand Corporation think tank suggests another reason – you want to be there.
A Rand brief on the AWCS survey compared working conditions and expectations of older workers (age 50+) to those of workers in their prime working years (ages 35-49). Over half of those aged fifty and above who weren’t working or looking for work said they would return to work under the right conditions – but what are those conditions? Do they match up well with today’s workplace?
Generally, it’s a tradeoff of benefits and salary for control – having some control over how they do their work, the pace of the work, flexibility in hours, and keeping the physical demands of the job at a reasonable level.
Workers approaching retirement have already achieved some of these conditions, according to the survey. Over two-thirds of older workers tend to find their work more meaningful and useful to the company, and they are more likely to use their own ideas and apply problem-solving skills on the job. Older workers are also less likely to have monotonous tasks – presumably, they have either advanced to more interesting work or found a different job.
While few jobs offer flexibility to balance work and family life, the survey shows that older workers are more likely to have such jobs – especially college graduates. However, flexibility in retirement is less likely to meet the needs of the company without a compromise. Let the free Retirement Planner by MoneyTips help you calculate when you can retire without jeopardizing your lifestyle.
Older workers are still almost as likely to have exposure to “intense or repetitive physical exertion” as younger workers. By accommodating older workers’ limitations, companies can retain knowledge and experience while maintaining workplace efficiency.
According to the Transamerica Center for Retirement Studies, almost three-quarters of companies think that most of their workers expect to work past age 65 or do not plan to retire – yet only 39% offer flexible schedules to pre-retirees as a transition phase.
Companies may be assuming that retirees won’t compromise in retirement. Transamerica found otherwise. Approximately 78% of workers expect their job title to change if they take on a new role with fewer responsibilities, and 71% expect to be paid market rates for their new responsibilities even if that results in lower pay.
The main sticking point may be benefits. About 60% of workers shifting to part-time work expect to retain employee benefits – unusual among part-time workers.
Employers have another hurdle to consider. The Government Accounting Office (GAO) found that tax and age discrimination laws provide serious challenges to transitional retirement programs – although the GAO finds that companies who do establish these programs find them beneficial.
Decisions on transitional retirement should be based on your preferences and options, not a lack of retirement funds. Retirement plans should involve both financial and personal aspects of your career.
Start by saving for retirement as early as possible. Take advantage of employer-based programs and fund them regularly. Set up an IRA or other savings vehicle if no 401(k) program is available.
Meanwhile, look for a good fit for your working retirement that meets your company’s needs. Be prepared to make reasonable compromises. If there’s no good fit, consider what other companies might use your skills, or whether you’re better suited for consulting (with greater control but more personal responsibilities).
In any case, you’re better off with a plan. You’re more likely to find the best position in retirement if you expand your options – and possibly create your own.
Regardless of where you plan to retire, the number one factor in ensuring that you can retire on your terms is your 401(k). Make sure that your 401(k) is maximizing its potential with this free analysis that checks your fees, fund mix, and other factors to help you hit your retirement goals.