You’re retired, but you’re working. You want to retire, but you keep on working.
It doesn't take a psychic to see that work is likely to become even more important in the lives of aging Americans. I've been tracking this sea change for several years, and my recent Forbes Retirement Guide piece, called Writing New Chapters, lays it out neatly. Since 1985, the labor force participation rate at upper ages has increased sharply—from 54.2 percent to 64.9 percent in 2010 for those aged 55–64 and from 18.4 percent to 31.5 percent for those aged 65–69.8, according to the U.S. Department of Labor.
The confirmation that we're living in a new era of the working retired keeps on swelling. In May, two new studies were released that continue to hammer home the reality:
- In an AARP Public Policy Institute survey of 5,000 Americans –age 50 and over–released last week, 44.1 percent said they would likely work part-time in retirement. One-third said that they planned to delay retirement.
Pushing back the date of retirement is certainly something over which older workers have some control. In response to a specific AARP question— has the age at which you expect to be fully retired changed in the past three years? —40 percent said that it had. For more than 8 in 10 of those who expected a change, retirement will be later than previously planned.
Here's what the second survey found:
- Three out of four middle-income boomers expect to work in retirement, according to the Bankers Life and Casualty Company Center for a Secure Retirement (CSR).
- More than half of those expect they will work for financial reasons, reported the study which focused on 500 middle-income Americans between ages 47 and 65 with income between $25,000 and $75,000.
- Nearly 80 percent are delaying their retirement by an average of five years.
- One in seven believe that they will never be able to retire due to the turbulent economy.
When you look beneath the sheet to see what is behind the undeniable need to work, you’ll find the AARP report is especially gloomy. The recession was “painful for most Americans 50 and over and many have yet to recover,” according to the report.
- During the three years prior to October 2010, nearly one-third saw their homes decline substantially in value.
- A sizable proportion, nearly 20 percent, fell behind on credit card payments or accumulated more credit card debt.
- One in seven had trouble paying the rent or mortgage.
- One in eight lost their health insurance.
- One in four surveyed reported exhausting all savings during the recession.
- And 36.4 percent stopped or cutback on saving for retirement.
But hallelujah, folks aren’t just sitting around wringing their hands. A good chunk of those AARP surveyed said they were already paying down debt, saving more, shifting to less risky investments, and obtaining financial advice. For half of those who experienced reductions in their retirement accounts, balances were moving in the right direction.
This leads me to the part of the discussion I love the most –engineering your own personal recovery. For starters, to find out if you are on your way to retire when – and how – you want, check out my post on retirement calculators and stop by the handy AARP retirement planning calculator.
Next, consider talking to a pro. It always surprises me how few people ask for professional retirement advice for something so integral to their future. Instead, they turn to the Internet and to friends and family for guidance. It’s like asking your mom for chicken soup for what ails you instead of going to a doctor who has actually studied medicine.
A good planner can develop an overall financial plan and verify if you’ve got the right mix of investments to meet your individual retirement goals and advise you on what to do if you don’t. Beyond that, when the time comes, he or she can counsel you on ways to draw down funds from your accounts when needed and help with estate-planning and tax issues or recommend a pro to handle that for you.
Where to look for one? If you can’t nab a recommendation from a friend, relative or colleague, try The National Association of Personal Financial Advisors, Garrett Planning Network, the Financial Planning Association, and the Certified Financial Planner Board of Standards. The American Institute of Certified Public Accountants has a list of CPAs who’ve earned the Personal Financial Specialist designation. Each of these outfits offers a searchable database with state-by-state contact information for planners.
For more help in picking a fee-only financial planner, pop over to this post.
Bottom line: Do something to take control. You might still find yourself singing for your supper in your sixties, but at least you'll be the one picking the song, and heck it might be fun.
To learn more about me, go to www.kerryhannon.com. Interested in great jobs for retirees? Check out my column on AARP.org. Follow me on Twitter, @KerryHannon
