When Dane Peters was 65, he retired as head of the Brooklyn Heights Montessori School in Brooklyn, New York, but he wasn't ready to stop working altogether.
It wasn't about money-although having income to cover some day-to-day living expenses and travel was an incentive. (He and his wife, Chris, a retired schoolteacher, had a cruise in Alaska and a longboat tour in France on their immediate travel bucket list.) Work, Peters says, gave him his "own sense of identity," and he wants to hang on to that. Plus, he wants to give back to others who could benefit from his decades of experience.
"I wanted to stay in the game and support independent schools with my expertise," he says, "but I didn't want the pace of a 70-hour workweek."
To see if his services as a consultant might be in demand, he took on weekend consulting assignments before retiring. Happily, he discovered a niche. He now chooses when he wants to work-normally one or two jobs a month.
Today, he leads a life of consulting, volunteering, caring for grandchildren, and enjoying leisure time. "It's my trifecta," he says. "Paid work, giving back, and relaxation." He calls it "consulteering." The biggest challenge is time management, he says: "How many gigs I will take on and how much volunteering my wife and I can realistically do."
Money, Mental Engagement, and Meaning
Not everyone is in a financial position to work just one consulting gig a month. Some of us need or will need to keep working full or part time for the income. The reality is that many people aren't financially secure enough to retire. When I speak to audiences of people over age 50 around the country looking for job-hunting advice, I see the palpable fear in their eyes that they will outlive their money. They might.
Nearly half of families have no retirement account savings at all, according to a report by the Economic Policy Institute, the independent, nonprofit think tank that researches the impact of economic trends and policies on working people in the United States. The median savings, or those at the 50th percentile, may be a better gauge. The median for all families in the United States is just $5,000, and the median for families with some savings is $60,000.
According to a recent survey by the Employee Benefit Research Institute (EBRI), a sizable percentage of workers say they have no or very little money in savings and investments. Among workers providing this type of information, 47 percent report that the total value of their household's savings and investments, excluding the value of their primary home and any defined benefit plans (a traditional pension where an employer ponies up the money and promises you a certain payout after you retire), is less than $25,000. This includes 24 percent who say they have less than $1,000 in savings.
"Even people with retirement savings see earning a half-time income as a safety net," says Beverly Jones, author of Think Like an Entrepreneur, Act Like a CEO, who advises 50- and 60-somethings as a career coach at Clearways Consulting in Washington, D.C.
Let me remind you of the four money-wise reasons to stay in the workforce as long as you can:
- You can still contribute to retirement plans. The more earning years when you can build savings in a defined contribution plan like a 401(k) or an Individual Retirement Account (IRA), the better off you'll be in terms of retirement security down the road.
- The pay can also help provide a cushion to allow you to delay tapping into Social Security until age 70. You can claim benefits as early as age 62, but by holding off until your full retirement age (currently age 66), you'll receive 100 percent of your primary insurance amount; every year that you delay beyond that, until age 70, adds an additional 8 percent annually.
- You can refrain from dipping into existing retirement funds. The longer you work, the longer you delay tapping these funds, which can continue to grow.
- Working can provide income to pay for health insurance until you're eligible for Medicare at 65. Fewer employers are offering their retired workers medical benefits, and those who do are ramping up the amount retirees must contribute to the cost of coverage. Even better, you might find a job that offers you access to a health plan. The income can also help with medical bills not covered by Medicare.
But like Dane Peters, people 50+ want more from a job than just income, says Dorian Mintzer, a retirement transition coach. "They want to build social connection, mental engagement, and meaning into their life," she says. "It's an important part of how they define themselves, and they don't want to totally give it up."
"Growing old in the 21st century is not what it was in the 20th," says Marcie Pitt-Catsouphes, director of the Center on Aging & Work at Boston College. What's different now is that baby boomers are either continuing to work much longer, or approaching work not as an afterthought but as a pillar of their "retirement" plans, as oxymoronic as that sounds.
The vision of people 50+ spending their retirement years gardening, golfing, and lounging on the beach is out. Meaningful work is in.
Today's 60-year-old might reasonably plan to work at least part time for another 15 years, figures Marc Freedman, founder and CEO of Encore.org, a nonprofit that promotes second acts for the greater good. "That changes the entire equation about what you want to do, what's possible to do, and whether it is worth investing up front for additional education," he says.
I like his thinking. To me, it's exciting, inviting, and empowering, providing that you enjoy what you're doing. Continuing to work helps people feel more relevant and needed and less isolated. And research shows that besides giving us meaning, work keeps our brains sharp-the old "use it or lose it" axiom-and our bodies healthy:
- Working tends to keep people physically active, socially connected, and mentally challenged-all things known to help prevent mental decline, according to the researchers at INSERM, the French government's health research agency.
- Work may even help stave off dementia. A large study by INSERM of nearly half a million workers in France suggests that delaying retirement means people may be at less risk of developing dementia, including Alzheimer's disease.
- For each additional year of work before retirement, the risk of getting dementia is reduced by 3.2 percent, according to Carole Dufouil, a scientist at INSERM.
- "Mental Retirement," a 2010 paper by economists Susann Rohwedder of RAND and Robert Willis of the University of Michigan, reviewed data from the United States, England, and 11 European countries. They concluded that retirement significantly hampered the cognitive ability of people in their early 60s.
- Scholars have reported that workers with routine jobs may find cognitive benefits if their employer offers variety and training for their jobs. For example, in studies of older workers' productivity at a Mercedes-Benz truck factory and a large German insurance company, economist Axel Borsch-Supan and colleagues at the Munich Center for the Economics of Aging found that older factory workers were as productive as their younger peers, when offered variety or training in their work.
- Volunteering and paid work produce better physical and mental health, says Linda Fried, a founder of the Experience Corps (a nonprofit enterprise now run by AARP that brings people age 50 and over into elementary schools) and a dean of Columbia University's Mailman School of Public Health.
Now in my mid-50s, I can't imagine not working in some form as a writer well beyond age 67-the age I can start receiving full Social Security retirement benefits. I've been passionate about writing since childhood. I've been tickled to make a living at it. And as I grow older, I appreciate that it's flexible work I can do from home, with my Labrador retriever, Zena, at my feet, or anywhere I can carry my laptop computer.
The Value of Older Workers
While working longer is better for employees, it turns out it's also better for employers. Those I've interviewed say that they find that workers age 50 and older are more loyal and aren't as likely as younger workers to job jump. They are reliable and dependable. And that lower staff turnover benefits the bottom line. The costs of high turnover are tangible. Finding, hiring, and training a new employee is a costly venture.
Employers also tell me that they value older employees because they have an ability to make quick decisions and solve problems based on their knowledge and overall life experience. They have superior communication skills, both written and oral. Importantly, they have the ability to serve as mentors.
In a global and fast-paced workplace, many employers don't have time to waste while a younger worker gets up to speed. Companies are realizing that it's often wise to seek out and hire experienced workers. Believe me, you're on the cusp of a sweeping...