Will Jobs Be There for Americans Planning to Work in Retirement?

Last December, I embarked once again on a media tour to discuss the results of our annual Wells Fargo Retirement Study, conducted in 3rd quarter 2011. While I feel it’s imperative to get the word out on what Americans are really doing and thinking about retirement, I’m not really comfortable doing the media tour itself. I’m not one for the spotlight and no matter how often I participate in interviews I’m not sure this will ever fall squarely within my comfort zone. So imagine my ambivalence (okay, sheer anxiety) when invited to participate in CNBC’s Power Lunch with Sue Herrera .

As it turned out, all that anxiety was a wasted effort. I actually enjoyed it immensely thanks to Sue. Instead of a busy, chaotic set, we were in a more intimate setting with an unobtrusive camera. It felt more like we were meeting for coffee, simply enjoying each other’s company and conversation.

Our discussion focused on what the study told us about affluent Americans and their current state of retirement, especially those in their 60s and 70s. Somewhat alarmingly, one-third of affluent Americans between 60 and 75 years old told us they didn’t know when they would be able to retire. While it’s not unusual for those in their 40s or even late 50s to be uncertain about pinpointing a date for retirement, we generally assume those in their 60s or older have a good idea of when they will retire. Instead, many stated they may need to continue working well into their 80s. While many acknowledged they need to cut back on spending, they also indicated that they haven’t done so yet.

A few days later an article appeared in The Wall Street Journal supporting similar findings.* The author, E.S. Browning stated: “Many older Americans fear they will be working well into their 60s because they didn’t save enough to retire. Millions more wish they were that lucky: Without full-time jobs, they are short of money and afraid of what lies ahead.”

Browning noted that older Baby Boomers are trying to postpone retirement, as many find their spending habits far outpaced their thrift. He said, “With U.S. unemployment at 8.6%, and much higher among people in their teens and 20s, younger members of the labor pool accuse Boomers of refusing to gracefully exit the workplace.”

He also noted that 6.5% of workers aged 55 to 64 were unemployed in October 2011, below the national average but more than twice the jobless rate for the group five years earlier.

So the question becomes: Will older Americans be able to rely on working in retirement and for how long? Not only does the availability of jobs play a role, individual health is also a determinant. For those who may anticipate or even choose to work in their 70s or 80s, will they remain healthy enough to do so?

In coming posts I will touch on this and related topics from our survey, including savings and withdrawal rates, retirement income planning, views on housing and more.

What are your thoughts on working in retirement? Do you anticipate continuing to work? Do you view this as a realistic strategy for people in their 70s or 80s? Why or why not?

*The Wall Street Journal, Oldest Baby Boomers Face Jobs Bust by E.S. Browning, 12/19/11.

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14 Responses to Will Jobs Be There for Americans Planning to Work in Retirement?

  1. B. Ogden says:

    I did not know that so many people were feeling the same way as I have felt over the last 5 years. I don’t know how many times I have said, “I will never be able to retire!”. This is not by choice. I would love to be in a position to careen around the golf course, but with the out of control health costs, higher and higher taxes, inflation, and our declining national economy, it is a pipe dream. Probably like a lot of seniors my age, we spent to long at the party believing that we were bullet proof and relying on our social network as the status quo as previous generations did. Now we are prparing for the nightmare of old age. Unless you have a cozy government or union backed pension the outlook is bleak, however I am still in relativly good health, I quit smoking, and I will not pass on without a fight. God bless America, it is still better than anywhere else.

    • Lynn Cerra says:

      Call me naive, but I still think there are a lot of options out there. One, never too late to save and invest. Two, dial down the lifestyle – right now. Though not workable for all, it’s amazing what thinking a bit about what you are spending money on can get your focus back on what is important – and what really isn’t. Three – develop a budget, and track your expenditures. Guaranteed to be an eye opener, and to show ways to dial back that don’t hurt much. If you are going to work in retirement, make it something you want to do, vs have to do!

      • Lynn, I agree, agree, agree! In the years leading up to retirement, I believe it’s important to dial back on your spending, put more money away, emphasize your needs vs. your wants and develop a budget. By doing these things it may allow you to take a part time job or scale back and allow you to do something you love.

    • Good for you! You have taken the steps to improve your health which impacts two of the biggest issues facing people in retirement; rising healthcare costs and needing to work in retirement, but not being physically able to. And you are not alone. We hear these same concerns from people all the time.

    • Mel Johnson says:

      A comment on your post: Not all government or union jobs have cozy pensions. Some may, some definitely do not.

  2. Mrs. .D. Lamb says:

    My hubby says he will retire in 15 months and enjoy a little fishing then see about working part time driving a dump truck. I don’t see any way I can retire. We still have too many bills for me to fill comfortable retiring soon. We are only 6 months apart in age and I guess as long as I feel I can do my job, I will stay with it. I think the economy will not support retirement over the next few years. Prices just keep going up and pay stays the same. Bosses say they can’t afford pay raises. So that may well keep my working longer than I want to. Even cutting back on most everything will not change much until I have all credit cards paid off and rework t.v., internet, phone and cell phone bills. Only time will tell us for sure.

    • With the economic situation, deficit and unemployment impacting so many people today, I’m glad to hear you and your husband have some options – and maybe you can convince him that working until your debt has been reduced and you have a little more breathing room is a better option. Once you’re done paying off credit cards, you can hopefully start putting some money aside for the time when both of you can feel more confident about him (and you, too!) retiring from full time jobs and moving to part time and eventually full retirement. Good luck!

  3. R. Robertson says:

    I will be 58 this summer and had planned on retiring at 67, which I think is my age groups target according to Social Security. But I keep hearing the age is going to change for this???? I have been investing for my future but I’m not sure 67 is a realitic goal. I dont want to be so tired and physically unable to enjoy some retirement years. This is a really scary time for all of us looking forward to retirement.

  4. R Bassett says:

    I thought I was taking all the right steps to ensure a safe and planned retirement starting 17 years ago. My approach was four pronged: 401K contributions, cash savings, limited stock investments, and debt control. How smart and successful I felt for years since my plan was working wonderfully well but then my outlook changed. Stock and 401K investments were not as safe as they had been in years past and painful losses were possible unless you were well informed or just plain lucky. The interest rate on cash investments that would have been sufficient to supplement my social security retirement dropped below 1% and is being outrun by Inflation. Personal debt control was and still is a good concept regardless of economic shifts. The moral of this story is that most of us are not profession investors or money mangers and are reluctant to ask advice from others. Working with trusted professionals could payoff and besides, talk is cheap. It would be a great feeling to think that I am on a positive track again.

    • First, give yourself huge credit for starting many years ago planning for your retirement – and for taking a multi-faceted approach to saving and investing. With the volatility in the markets in the past five years, it’s easy to get discouraged but don’t give up the great habits you have. If you haven’t developed a written plan for retirement with a trusted professional advisor, I hope you’ll do that as it can help with your confidence about where you want to go and how to get there. If you’ve already done this, stay in touch and seek advice whenever you need to re-visit where you are. Good luck, and never be afraid to ask for help.

  5. Ron says:

    The single biggest revelation over the years has been to realize my “unique” life is so middle America. I retired at 65–forced–and found price increases on must have things went up but Social Security cost of living didn’t go up???
    Luckily went back to work after 18 mos and have reset the date to “when I can’t have enjoyment at work”.

    Good Luck To All my fellow seniors

    • You’re not alone in going back to work and delaying your retirement in the midst of tremendous economic uncertainty. While you are working longer than you planned, it’s good to hear that you have a job that you enjoy, and I hope you’ll continue to do so until you are more comfortable “re-starting” your retirement. And good luck to you as well!

  6. Robert says:

    My wife and I are separated in age by 14 years. Our retirement strategies are linked, but separate, driven by state retirement funds, 401K’s equities and savings accumulated over more than 4 decades at work. The past years haven’t been kind to our investment balances, and as I approached 65 this year, we intensified our focus on better management of our investments. Financially speaking, though, I could retire a year from now, and my wife in 10 (or more) years – when she’s ready.

    But, here’s the thing: I really enjoy my work (I’m a professional engineer and project manager), I’m fit and in excellent health and have great energy. I travel in my work and have adequate leisure time for family and self. I don’t want to retire just to create more leisure time for myself, nor do I feel any obligation to cease being a productive member of my profession simply to make room for younger folks. Call me selfish if you will, but I believe I have the right to work as long as I produce value for my company and choose to remain in the work force.

    I know that health issues can arise at any time, and that, as I age, I may become more vulnerable to age discrimination in the workplace. Our response is to remain financially prepared, as best we can, for these issues. But as long as I’m happy and productive working, I’ll stay in the game. If that means working until my mid- to late-70′s, fine.

    My guess is that there are many, many Boomers like me, financially constrained or not, who are interested in and satisfied by our work lives, and who would continue to work in any case.

  7. Marjorie says:

    I guess my husband and I are anomalies. We have lived fairly conservatively most of our married lives. Neither of us came from affluent families so we learned early on to be cautious with our money. We have never accumulated credit card debt, always paid for vacations before taking them, spent only what we could afford for Christmas and other gift-giving occasions and didn’t hire people to do work we could do ourselves. We lived well enough and happily but never on the edge financially. I was able to stay home with my daughters when they were young, doing freelance work on the side when I could find it. When I did reenter the workforce at age 45, the company I worked for had excellent benefits, profit-sharing and matching 401K contributions. I used the next 15 years to build my 401K, consistently putting away 4x the amount matched by my employer. Over the years, we paid for two college educations without tapping into the funds we had put away for that purpose, paid for two nice weddings, bought year-old cars and paid them off within a year or two, piggybacked vacations to South America and Europe on business trips, and most recently paid off our house. At age 59, I have just retired but will continue doing contract work from my home – in large part to pay for health insurance – and my husband will retire later this year at age 70. All things considered, we don’t expect our lifestyle to change much in retirement. I’m sure our choices are not for everyone and I’m not suggesting they should be, but when I hear how stressed people our age are about their financial future and the prospect of delayed retirement, I’m very glad we made the decisions we did.

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