The New Face of Retirement

Boomers are redefining the rules for retirement to overcome uncertainty.

Boomers decide to work through retirement

Recent reports indicate Baby Boomers (anyone born between 1946 and 1964) are not prepared for retirement, largely due to lack of financial planning. On the other hand, a new study by the Transamerica Center for Retirement Studies finds many Boomers may be defining retirement entirely – and that’s largely by choice.

The findings support previous results that at least 65 percent of Boomers will either work past the standard retirement age of 65 or don’t plan to retire at all. More than half plan to work after they retire. However, while 67 percent of Boomers blame lack of financial planning and savings, 34 percent say that it’s what they want to do. That means one in three Boomers will work into retirement by choice, either because they find it fulfilling or actually really enjoy what they do.

“For most Baby Boomers, retirement is no longer a point in time at which one immediately stops working. It is now a phased transition which may involve shifting from full-time to part-time work, taking on a position which is more satisfying and/or less demanding, or pursuing an encore career,” says Catherine Collinson, President of TCRS. “Few Baby Boomers expect to immediately stop working when they retire.”

This intention to continue earning even after retirement is certainly a good thing from a financial perspective for almost any consumer.

“Even if you did everything right to make sure you’re ready to retire, that doesn’t mean you have no use for a little extra income,” points out Gary Herman, President of Consolidated Credit. “The limited fixed income that usually comes with retirement can be a challenge even in a best case scenario. Continuing to bring in a paycheck can certainly provide the peace of mind that you have something to fall back on if problems ever arise.”

Define your own retirement reality

Making the decision to continue working after retirement doesn’t mean you’ll be running the same rat race – and it may be easier to map your employment destiny than you think.

  • 88% of employers support their employees working past the age of 65
  • 48% actually have practices in place to enable retirement-age employees to move from full-time to part-time employment
  • 37% allow employees to transition into less stressful or demanding positions

That means it’s in your best interest to discuss the options available with your employer. There’s a good chance they’ll be willing to work with you to create a path forward that keeps your expertise available for them and keeps a paycheck coming into your bank account.

Consolidated Credit offers the following tips if you’re nearing retirement and weighing your options:

  • Review your budget to see how much income you need to earn. This can help you determine how much you’ll need to bring in after you start getting retirement income from your retirement account withdrawals and Social Security benefits. Even if that income will support you, part-time employment may provide some extra income and added peace of mind.
  • Talk to your employer as early as possible. Even before you reach 65, start the conversation with your employer to see what options you have to continue with that company. You may be able to mentor or train new employees or move to a part-time or telecommuting schedule so you’re not spending every day doing the full-time daily grind.
  • Consider options like consulting. If you don’t have an avenue to continue with your current employer, consider alternatives such as moving into consulting or offering your expertise on freelance or on retainer. The income may not be a consistent, but it will allow you to stay active and continue earning. It also offers the benefit that you can work as much or as little as you like.
  • Make sure your money can last. There’s a real risk of outliving your retirement assets. So keep an eye on your balances and take steps to avoid things that can drain your money quickly, such as taking on too much credit card debt or using your assets to support your working-age children.