Setting Realistic Expectations about Work in Retirement

Sixty-four percent of workers are very or somewhat confident they will have enough money to last throughout their retirement, according to the Employee Benefit Research Institute’s (EBRI’s) Retirement Confidence Survey, said Craig Copeland, senior research associate at the Institute, speaking during a webinar on the topic of working during retirement. However, only 17% are very confident.

Among retirees, 75% are very or somewhat confident their money will last throughout their retirement, and 32% are very confident, he said.

The median age at which people expect to retire is 65, but the actual age is 62, he said. The reasons why are usually because of a health problem, a disability or being laid off.

Seventy-nine percent of workers want or expect to work in retirement, said Lisa Greenwald, executive vice president with Greenwald & Associates, but only 33% of retirees have worked for pay since retiring. Twenty-one percent of workers expect that working in retirement will provide them with a major source of income, but this is only true for 9% of retirees, Greenwald said.

When workers were asked why they would like to work in retirement, 94% said they want to stay active and involved. Eighty-two percent said they enjoy working, 90% want money to buy extra things in retirement, and 74% expect the income will be necessary to make ends meet.

The same questions were asked of retirees. Ninety percent said they want to stay active and involved. Eighty-two percent enjoy working. Sixty-seven percent want to have money to buy extra things in retirement, and 42% said they are working in retirement to make ends meet, Greenwald said.

Among the retirees who are working, 35% said it was planned and 65% said it was unplanned.

The U.S. Chamber of Commerce has tried to promote the idea of a phased retirement, said Aliya Wong, executive director of retirement policy. The problem, she said, is that “not every job is suitable for phased retirement. Employers want to maintain discretion but worry that could lead to discrimination.”

Also, if a worker goes through phased retirement and continues to contribute to their workforce retirement plan, there is the question of how does a phased retiree figure into the nondiscrimination testing, Wong added.

The Department of Labor (DOL) has created a Senior Community Employment Program to provide training for low-income seniors who want to continue to work, Wong continued. However, she said, “the program is not expansive or very well funded or publicized.” Because of the growing need among employers to find qualified workers, the Chamber is hopeful they will partner with the DOL on this program, Wong said.

The American Disabilities Act and the Occupational Safety and Health Administration could potentially make it easier for older workers to remain on the job longer, she said. For instance, an employer could implement technological aids such as a magnification screen on computers, or build ramps to enable people in wheelchairs to enter a building, she said.