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Planning for ‘unretirement’

By Jennie L. Phipps · Bankrate.com
Wednesday, May 22, 2013
Posted: 12 pm ET

Is the new retirement no retirement at all?

A compelling article in the University of Michigan's Sampler, a magazine produced by its Institute for Social Research, points out that after decades of taking retirement earlier and earlier, people now work longer and longer. The trend reversed about 20 years ago.

Economics are the big reason most people stay on the job. Some 40 percent of older Americans revised their retirement planning after the Great Recession, according to two different institute studies. The typical household lost about 5 percent of its total wealth between the summers of 2008 and 2009, reported economist Brooke Helppie McFall. To recoup losses, they stayed on the job an average of another 1.6 years longer than they had planned.

But economics aren't the only reason people are working longer, the study pointed out. Other factors include:

  • Working spouses of different ages want to retire at the same time.
  • People love their jobs. This is particularly true among those who are highly educated and those who are very well-paid.
  • Many jobs have little or no physical demands, so continuing to work isn't a hardship.

Once they decide to leave their primary employment, more workers are choosing to bridge the transition by working part time. A study by the institute showed that among those born between 1942 and 1947, nearly two-thirds of those who retired from full-time work took another job that was either part-time or temporary before they left the workforce totally.

Among younger workers -- those between ages 51 and 61 -- some 40 percent chose a slightly different approach, taking a break for a couple of years and then returning to the workforce full time, often in a totally different field.

The institute calls this phenomenon "unretirement."

While it is probably a good idea for some people, it sounds too much like work to me. Have you adjusted your retirement plan?

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1 Comment
Betina
May 28, 2013 at 3:52 pm

The article didn't mention that some people can't afford to retire and so they are working longer because they have to. The two recessions have put substantial dents in many people retirement savings. One person said she has lost up to 50% of her retirement savings.