How to Delay Retirement for a Healthier and Wealthier Future
by Kathleen Coxwell, NewRetirement.com
Reaching age 65 once meant collecting a final paycheck, but today, more Americans are trying to delay retirement, working well into the traditional retirement years, not because they have to, but because they want to.
According to the Pew Research Center, in 2016, 18.8% of Americans age 65 and older reported being employed part- or full-time. By 2022, that number is expected to grow to 31.9%. We're living longer and healthier, so it makes sense for us to continue working, learning, and maintaining the social connections that the working world brings well past the age of 65.
Here are eight tips to help you delay retirement:
Want to Delay Retirement? Try a Proactive Late-Career Job Switch
The financial benefits of continuing to earn an income and delay drawing retirement benefits cannot be denied, yet many people nearing retirement age just can't imagine staying in their current job for another 10, 15 or 20 years. For them, it may be time to think about a shift that will allow them to delay retirement and work longer (and happier).
New research from the Center for Retirement Research at Boston College suggests that switching jobs voluntarily can increase the likelihood that you will still be working at age 65 by 20%, regardless of gender or education.
Find a Flexible Job
The study's researchers suspect that switching to a more flexible job (work where you have ability to control your schedule and/or work outside of normal business hours or do the job from home) may help you delay retirement and stay working longer.
What if you've dreamed of retiring so you would have more time to spend with family, pursue hobbies, or travel? You may be able to continue to earn an income and do those things with flexible work.
Keep in mind that part-time and flexible work often comes with a reduction in pay and benefits. You may need to scale back your lifestyle to adjust, but consider it good practice for full retirement. Just make sure that you know how your current income, retirement plan contributions, and other benefits will be affected.
Life is flexible. Is your job?
Find flexible work at Flexjobs.com.
There are a variety of ways to achieve job flexibility:
Phase into Retirement: If you're interested in a phased retirement, talk to your current boss (if your current workplace is somewhere you want to stay). Even if there is no formal program in place, your employer may be willing to work out an arrangement that will give you the flexibility you desire while passing on your knowledge and experience to the next generation.
Go Part Time in a New Job: Work does not have to be a full time 9-5 gig.
Network: If your current employer can't accommodate a flexible schedule, reach out to the connections you've made over the course of your career. As I'm sure you've discovered, sometimes it's not about what you know, but about who you know.
Try Freelancing: Your current work may also lend itself to consulting or freelance work that will give you the freedom to choose projects and clients that are important to you, and give you the flexibility to work when and where you want.
To Delay Retirement, Find Meaning in Your Work
In 2012, a study by Merrill Lynch and Age Wave interviewed working retirees and asked them what advice they'd give pre-retirees who are considering employment in retirement. Approximately 75% recommended being open to trying something new and willing to earn less to do something you truly enjoy. In other words, working in retirement can be a chance to pursue purpose and a paycheck.
If your current career isn't going to carry you into a happy and productive retirement, consider what else you can do with your skill set. What problems do you want to solve? Are you passionate about healthcare, education, the environment, or animals? You may be able to shift your focus to working for a nonprofit. Check out the Encore Fellowships program, which helps individuals from the corporate sector transition to new roles in nonprofit and social impact organizations.
Evaluate All Aspects of Work - Not Just the Paycheck
We have been trained to focus on what we earn as the measure of a good job. However, work can give you intellectual and social stimulation, and as shown above, the right job can enable you to have meaning and flexibility.
Overcome Age Discrimination
Young people who are currently unhappy in their career or job may be quick to make a change, but older workers sometimes feel like sticking it out until retirement is the only choice they have. Unfortunately, age discrimination is a serious concern for job seekers. According to the EEOC, age discrimination complaints rose from 15,785 in 1997 to 20,857 in 2016, although they have fallen from a high of 24,582 in 2008.
Use Technology: It can be difficult to switch careers after the age of 50, but keeping up with technology and maintaining a current LinkedIn profile can demonstrate that you are up-to-date and willing to try new ways of doing things.
Know You Are Needed: Changing demographics may work in your favor, too. With such a large percentage of the workforce at or near retirement age, many employers realize that older workers can bring training and mentorship to the younger generations.
Seek Training: If you are unhappy with your current career, start considering how you can transition into something you will enjoy for years to come. If that career shift requires new certifications or degrees, get started on them right away.
Looking for a new career? Or to advance in your career?
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See the Upside of Having a Mortgage
Many people dream of entering retirement without a mortgage payment and that is a worthwhile goal.
However, it seems that if you have a mortgage, you are more likely to still be working at 65 (10% more likely in fact).
While the mortgage payment may feel like a ball and a chain, the additional years working will likely pay off more than just your house. The ability to save longer and delay tapping those savings can go a long way toward helping you have a secure retirement.
Home equity can help fund retirement. Home equity is fast becoming the new de facto retirement plan for many households.
Consider Health Insurance
Health insurance and out-of-pocket expenses can be a significant expense in retirement. Last year, Fidelity Benefits Consulting's retiree health care cost estimate determined that a 65-year-old couple retiring today will need an average of $260,000 (in today's dollars) to cover medical expenses throughout retirement, including Medicare premiums, co-payments, deductibles, prescription drug expenses, dental, and vision care.
One way to help reduce those costs is to continue receiving health insurance coverage under an employer-sponsored plan. If you are age 65 or older, you are eligible for Medicare, but if you have insurance through an employer, you can enroll only in Part A (hospital insurance), which is free for most people.
Talk to your benefits manager or human resources department about how your employer-sponsored health insurance works with Medicare. For some, employer insurance works differently once the employee qualifies for Medicare. You can enroll in Medicare without penalty for eight months after losing group health coverage or if you stop working.
Whether you enroll in Medicare or find an affordable private plan, being covered by health insurance outside of an employer-sponsored plan makes it easier to take a more enjoyable or flexible job that doesn't come with health insurance.
Understand Your Long-Term Financial Needs
Creating and maintaining a retirement plan is critical to your financial well-being, whether you are working and delaying your retirement or already completely retired.
The type of jobs you choose after retirement will likely be at least somewhat determined by your financial needs.
Do you know what your financial needs are? Now? Twenty years from now? The NewRetirement retirement calculator is an easy to use but highly detailed resource that lets you create your own retirement plan and keep it updated. You can input different income and expense levels for various time periods.
Reviewed April 2018
Take the Next Step:
- Determine if debt could derail your retirement and what you can do about it now. Our checklist can help you. Afterall, one of the most important ingredients for a comfortable retirement is to be debt free when you retire.
- Use this tool to maximize your retirement by determining the best age to take your Social Security benefits. Don't leave thousands on the table by taking Social Security at the wrong time.
- Subscribe to After 50 Finances. You've learned how to work smarter, not harder. This weekly newsletter is dedicated to people just like you. Subscribers get a FREE copy of our After 50 Finances Pre-Retirement Checklist, a list of everything you need to do to be ready for retirement.
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