Retirement is changing. The question is how? A scan of
retirement headlines suggests that it's largely negative, driven
by overburdened retirement structures and elderly people working
minimum wage jobs long into their so-called Golden Years. I think
the reality is more complex, and a lot of it is simply the
recognition that we have new choices.
That was made clear by a recent survey
that found 72% of pre-retirees, defined as people older than 50
but not yet retired, plan to work in some form during retirement.
5% said they plan to work full time, 35% plan to work part time
and 33% hope to cycle between work and retirement. Only 28%
replied that they planned never to work again.
It is easy to fit this into the narrative of retirement
hardship, and certainly that is the reality for some, but a
deeper look suggests there is more going on. While money is a
factor, 51% of pre-retirees listed staying mentally active, 43%
listed staying physically active and 32% listed social
connections as reasons for working.
Interestingly enough, 58% of current retirees who are working
are in a different line of work than their pre-retirement
careers, with flexibility, more fun/less stress, and the desire
to learn new things the top reasons for the switch. Marc
Freedman, in his book,
The Big Shift
, was one of the first to understand the change toward working
retirement and the benefits it can bring, giving the phenomena
the name Encore careers.
His research suggests that up to nine million people are
engaged in Encore careers, which he defines as a new phase
between what we would consider our main career and what we would
traditionally consider old age. Freedman focuses a great deal on
inspirational stories of reinvention, people who pursued their
passions or became entrepreneurs who in a previous generation
would have simply retired.
My own view is that a 65 year old today has more health,
greater life expectancy and more to offer economically that a 65
year old of a generation or two ago. And even if finances force
them to work longer than the traditional retirement age of 65,
there is no reason for them to work in the same way or the same
field. The more people recognize a new phase - some later in life
in between stage similar to the way adolescence sits between
childhood and adulthood - the more they can take advantage of
For a healthy person, working longer makes sense. They can pay
more into the retirement system and delay taking benefits, which
should increase the benefits they receive. But let's not overlook
the personal and societal benefits of working in a new way. When
you consider the options, you may decide that "retirement" is not
going to be part of your retirement, at least not yet. And that
may be great news.
Chip Castille, Managing Director, is head of the
BlackRock US Retirement Group. You can find more of his
Work in Retirement: Myths and Motivations, Merrill Lynch, 2014
The Big Shift, Navigating The New stage Beyond Midlife, by Marc
Freedman, PublicAffairs, New York, 2011