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I want to work after retirement!

I want to work after retirement!

| June 05, 2024

As I sat at San Francisco Airport with flight delay #8, I made use of my time by reviewing an Employee Benefit Research Institute survey. The survey looked at how many people want to work in retirement versus how many do. As I am 56, the topic is of interest to me.

Back in 2009, 80% of Americans thought they would work in retirement but only 34% actually were working after they retired. By 2021, the numbers who wanted to work was at 73% with the actual at 23%. The survey did not dig into the "Why" so I thought I would hazard a guess while waiting for take-off.

There are quite a few reasons folks might want to work in retirement. Boosting your income is frequently cited. This one makes sense given my decades in the retirement space. I have seen any number of older employees who have not saved enough and I do wonder how they will make ends meet.

Staying sharp is another reason given. This one resonates with me. There is only so much TV one can watch in a day after all! And as one retiree told me, he golfs 3 - 4 times per week but wants more mental stimulation. Work - with its never-ending variations - can provide just that. I would go bored out of my gourd, I dare say, if I was limited to TV watching.

Maintaining a sense of community also comes up when I have these discussions with my 401k client employees. Yes, work can provide a ready-made community where you have something in common. While others can create community through shared activities (ie, pickleball) or an existing group (ie, through religious affiliations), not all have that. And some folks crave more than just that.

And then there is the "Finding a purpose" reason. I remember a conversation with a dear family friend. He was 75 and still working. I asked him why he did not just retire. He told me, in no uncertain terms, that work gave him a reason to get out of bed. He had a place to go. Matter of fact, he worked until 76 when ill-health put a kibosh on the whole thing.

Health insurance is also frequently offered as a reason to still work in retirement as company offered health insurance can be cheaper than individually purchased policies.

What I try to get my 401k employees to focus on is a desire to work in retirement because they want to versus a desire to work in retirement because they have to.

If so many folks are interested in working after retirement, why is there such a gap between expectations and reality? Here are a few thoughts off the top of my head at 35,000 feet in the air.

The pay can be low depending on the job. Some employers may not want to spend the time training an older employee and thus slot them into a low-skill job. If you are thinking of working past retirement, make sure you have something lined up prior to retirement.

There are those who realize in retirement that they have paid their dues and earned the right to take it easy. Makes sense and who am I are to argue? Just make sure you know what you will do to keep yourself occupied. To quote Ian Fleming's Thunderball, "Those whom the Gods wish to destroy, they first make bored".

Corollary to an earned right to take it easy is the idea of burnout. This is likely more common in the US with our fast-paced work life as well as the longer hours we seem to be working post-COVID. Work from home? HA! I dare say the work-life boundary has become fuzzier. Burnout also touches on the issue of not being able to work because of health reasons.

For some folks, there may be a concern about earning too much and the impact on pension or Social Security income. This is a valid concern and one you should review with your tax advisor.

And sadly there is ageism. I remember when a colleague at AIG, Sylvia quit our office. She needed a break and was over-worked. She could not find another job when she tried to get back into the workforce. She was deemed "over-qualified", "too expensive", etc. She snuck a peek at her application to one job and saw the note, "Too old" on it. While it is illegal to discriminate based on age, it does happen.

So where does this leave us as my plane is on final approach? Part of the answer lies in what I tell folks in every 401k group and individual meeting. Save as much as you can now and start as early as possible. No one has ever said to me in 34 years in this industry, "I have too much money". I have not heard that. Sadly, I have heard the flip side to that. I want my employees to say at retirement, "I want to work as it gives me joy, etc."