Trends of the New Retirement
Author: Helen Dennis, Specialist on Aging
Question: I have been reading a lot about seniors working in retirement. As a 72-year old educated woman with lots of skills, what do I need to understand about this new time? I may need to return to work.
Answer: You have recognized a big change – it is called a retirement revolution. Work and retirement are not longer exclusive entities. Both often co-exist.
Increased longevity, the economic downturn and the capacity to be productive have motivated and enabled midlife and older adults to work into their later years – a time typically considered the retirement years.
Here are six trends that capture this new time.
Retirement may involve more years: We used to consider about 20 years of a person’s life as the retirement years.
Today, it’s more like 25 or 30 years. Most of this change is due to increased life expectancy. In 1900, the average life expectancy at birth was 47 years. Today it’s 78 years. If men are fortunate enough to live until 65, on average, they will live 17 more years. For women it’s 20 more years. And living to be 100 is a reality. In 1900, there was a 1 in 100,000 chance of living to be 100; today it is 1 in 10,000.
We are living in a time of an unprecedented demographic transformation.
Retirement may involve fewer years: If people work longer and life expectancy remains the same, we may spend fewer years in traditional retirement. (Note that financial planning should always assume longer rather than shorter time in retirement.)
Work is part of retirement: This is a big change and becoming the norm. Surveys reveal that 7 out of 10 baby boomers expect to be working in their retirement years. Income is a significant motivator.
Traditionally, retirement income sources were referred to as the three-legged stool of income. They consisted of pensions, Social Security and savings/investments. Today, the fourth leg is work.
Companies are becoming age friendly, to some extent: AARP launched its ninth national competition for the Best Employers for Workers Over 50. Employers are judged on their recruitment practices, benefits, workplace culture, training, opportunities for retirees and more.
In 2001, the first year of the competition, 17 applications were received; 11 employers won. This year, 175 applications were received, with 50 winners. (I have been part of the judging panel since the program’s inception.)
The awards formally acknowledge companies who value mature workers, rewarding these employers with recognition and extensive publicity. This year’s first-place award went to Cornell University, followed by First Horizon National Corporation and the National Institutes of Health. Our own Aerospace Corporation in El Segundo was in the top 30.
Although illegal, the issue of age discrimination continues. Age-related complaints submitted to the Equal Employment Opportunity Commission have increased 30 percent since 2007. And the competition from younger workers is challenging. There are more of them, they are less expensive and hiring a younger person eliminates the risk of an age- discrimination lawsuit.
At the same time, mature workers bring their experience, knowledge, skills and work values to the employment setting. The best person for the job should get the position. Age should not play a role.
Older adults are seeking employment and working longer:
The Bureau of Labor Statistic reports that from 1977 to 2007, the number of people employed who are 65 and older doubled. And more of the 65-plus group are working full time.
Expectations are high: In our parent’s generation, a good life in retirement meant they owned their home, their children were married and had a family, and everyone was healthy and happy. Today, the good life means more.
In my work with more than 10,000 employees planning for the nonfinancial part of their retirement, no one has ever said they wanted less freedom, friends, money, joy, opportunities or family time in retirement. And it’s not all about money. It’s about purpose, friends and a sense of freedom and choices. It’s about a higher quality of life and even peak experiences.
Hopefully these trends will help you think about your work and retirement plans. Thank you for your good question and my best wishes to you.
© Helen Dennis 2010, all rights reserved.