Got retirement? Maybe not. After reshaping the social and political landscape during the past 40 years, baby boomers are now in the process of redefining retirement. Whether voluntarily or involuntarily, 50- and 60-somethings are repackaging themselves in second, third or even fourth careers for a variety of reasons, including financial necessity, creative choice and boredom.

The boomers are caught in a confluence of factors driving the re-creation of retirement: the disappearance of lifetime employment, the weakening of the retirement social safety net, skyrocketing health costs and increasing life spans. What all this adds up to is the death of traditional retirement.

If you retire at age 65, the traditional retirement age, you’re likely to live for 15 to 20 more years, depending on your gender and health. Many will live longer. By working longer — either in your career of choice or at some other job — you can make important strides toward financial self-sufficiency in retirement because you’re delaying drawing on the funds you’ve saved for retirement. Also, those funds have a chance to compound over a longer time.

“With the boomers, we’ve got 78 million people who have to think about what they are going to do in the next phase of their lives,” says Brian Drum, chief executive officer of Drum Associates, an executive search firm in New York City. “They are going to have to focus on what skills they have that are transferable to another job — many will need to continue to work to fund their retirement. At the same time, there is a coming shortage of trained people in the work force, so employers are going to have to think about what they can offer older workers to keep their skills.”

Employment and retirement

Formerly, retirement was seen as a three-legged stool: a company pension, your savings and Social Security. The analogy is still valid, but the legs are different: your savings, your employment income and Social Security. The good news is that coupled with a disciplined savings plan, working in retirement for five to seven years or longer can substantially increase the likelihood that your money will outlive you instead of the other way around.

The bad news is that if you haven’t already saved much, working part-time for even five to seven years in retirement won’t help that much. You’ll need to work full-time for as long you can and probably lower your post-retirement standard of living so you won’t outlive your savings.

That said, your individual situation is likely to be quite different from your neighbors’ or co-workers’ situations, so it’s important to get a handle now on the various scenarios you may meet as you continue to wend your way toward retirement, says Mark LaSpisa, a certified financial planner with Vermillion Financial in South Barrington, Ill.

“If you were traveling down a road and a bridge was out and you didn’t have any warning, you might not be able to stop before you went off it,” he says. “But if you had some warning, you’d be able to detour around it. That’s what retirement financial planning does — it gives you notice as to potential problems down the road and helps you plan around them.”

He recommends a consultation with a financial planner who can describe various scenarios to give you a better idea of what steps to take going forward. “While there are lots of retirement calculators on the Web, they have different assumptions and can’t fully take into account your personal situation the way a trained financial planner can,” he says.

Re-careering choices

If you determine that you need to continue to work, what are the options? Studies identify a number of trends when it comes to serial retirement (also known as phased retirement or re-careering).

This work force can be divided into several categories:
  • Phased retirees who continue to work for the same employer but in a reduced capacity.
  • Partial retirees who work part-time for a different employer.
  • Job changers — those who work full-time for a different employer.
  • Consultants or freelancers who run a sole proprietorship, working as independent contractors for a former employer or employers, usually from an outside office.
  • Entrepreneurs who start a business or buy a franchise that employs others.
  • Temp to permanent — those who sign up with a temporary employment agency with the intention of transitioning to full-time work.
  • Temporary workers who work part-time or full-time through a temp agency for a variety of employers.

While older workers increasingly profess interest in continuing to work, the actual average retirement age continues to be 62. Half of all those in the work force are currently retiring at age 62 and that trend is expected to continue, an AARP study shows. While older workers are more likely to be self-employed, the number of self-employed — 16 percent — is still fairly small compared with those who work for others.

“In my experience, about one-fourth of those who work in retirement do so because they want to and can afford to change careers, but most are looking for work because they have to,” says Bob Skladany, vice president of research for RetirementJobs.com, a company that helps serial retirees find work. “This is especially true for workers ages 50 to 62, many of whom are downsized just when they are in a senior position and making a good salary with benefits.”

The job market

Job opportunities are fairly abundant in the retail industry; the downside is those jobs don’t pay anywhere near what many workers were making in manufacturing or other long-term jobs. The good news, Skladany notes, is more retail employers are making affordable health insurance available to even part-time workers.

Staffing and employment agencies are picking up some slack in the job market for older workers, offering a variety of temporary assignments as well as temporary to permanent assignments. These employ workers with professional skills, such as accounting, software testing and technical writing as well as clerical skills for such jobs as receptionists and administrative assistants.

If health insurance isn’t an issue, freelancing or consulting can work well. “I’ve been doing all sorts of things in the year since I retired from my full-time job,” says Leonard Honeyman, a former journalist with Gannett and author of the Len’s lens blog. “I’ve actually turned down full-time jobs because I want more flexibility, including working on my blog, writing newsletters and doing some freelance articles for newspapers,” he says.

Starting a business

It takes a certain amount of courage — and financial freedom — to start your own business later in life. Rob Bennett, a tax attorney and journalist, dreamed of writing a book but needed to work a full-time job for financial reasons. With his dream as a goal, he “worked and saved like a madman until I got to the point fairly early in life where I had saved enough so that I could do what I wanted to do,” he says.

“Now I’m at the point where I only have to make $12,000 a year or so to pay my bills and that covers food, utilities and other day-to-day expenses,” he says. “My mortgage is paid off and if I make more than my minimum, we can take a nice vacation.” His book, “Passion Saving: The Path to Plentiful Free Time and Soul-Satisfying Work” and his blog, promote the idea of early savings as a path to financial freedom.

Many employees have transferable skills and networks they could tap if they want to start a business, says Ken Gelman, vice president and director of market research at AXA Equitable, which recently sponsored a study on global retirement. Keep in mind, though, many small businesses fail because of a lack of planning and cash flow. “If you are interested in starting your own business, it makes sense to play off your strengths and also to get some financial advice,” says Gelman.

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