Are you 65 and still working? Consider yourself part of a growing trend.
This retirement planning trend is strongest among people who are better educated and well-heeled, says a Brookings Institution study for the Center for Retirement Research at Boston College. While staying on the job does keep these workers from having to dip into savings, working longer isn't generally a reflection of any decline in their retirement income from pensions, Social Security or the availability of income from savings if they choose to take it. "We find only a weak relationship between changes in asset income and the decision to remain in the workforce," researchers reported.
What's keeping these people on the job longer? Three factors, the study says. People like the work and do it well, and the boss wants to keep them around. The availability of health insurance that is cheaper and better than Medicare seals the deal.
Another factor that can have an influence is whether or not a worker has an old-fashioned defined benefit pension plan, or a 401(k) or other defined contribution plan. "Defined-benefit plans create strong incentives for early retirement because the benefit is not adjusted for those who delay retirement, and the worker cannot receive the benefit unless they leave the job," the report concludes.
But 401(k)s have the opposite effect. The longer you work, the more income you can shelter and the more employer matches you get. "This shift in pension coverage has been a substantial factor in accounting for the rise in the labor force participation of older workers," the study says.
The bottom line, the study found, is that older workers are protecting their nest eggs. While the portion of income older workers derive from savings has declined by 50 percent since 1990, they've made up the difference with income from wages and self-employment.
In other words, if you like to work, do what these workers are doing -- continue to work, and leave your nest egg alone. If you live to be 100, you're going to need it.