Changing View of Retirement Can Benefit Workers and Employers

Posted on April 2, 2015

A recent Merrill Lynch survey found that 72% of pre-retirees older than 50 said that their ideal retirement would include continuing to work in some form. As I interact with individuals who are nearing retirement, we frequently discuss what they plan to do with the next 20 or 30 years of their life. After hundreds of these conversations, my common refrain has become: “It is not enough to retire from something; you must retire to something.” Sometimes preparing for the financial part of retirement is a cake walk compared to getting ready for the non-financial parts. Also the fact that many people are living longer and healthier lives has led to a changing view of retirement.

However, working during retirement looks very different from working pre-retirement. Most workers (60%) said they planned to try something new, more flexible, or more fulfilling. These statistics would have seemed baffling a generation ago, but now as the Baby Boomers enter retirement, they are once again reinventing what retirement means. These retirees are beginning new careers, starting a small business, or remaining with their employers – but in a part-time or consulting role.

You may think that these retirees are working because they did a poor job of preparing for retirement financially. But that does not seem to be the case. Of those who are actively working but already in retirement, 80% said it was because “they want to”, rather than because “they have to.” In fact nearly half (48%) indicated that “Stimulation and Satisfaction” are the main reasons they work during retirement. There is also a trend towards a “Career Intermission” that may last 2-3 years. This time allows a retiree to relax, recharge, and retool, while also checking off some items from their bucket list. Then they may be ready to reengage back into the workforce.

It is great that workers are finding fulfillment in retirement, but it can also be a great deal for employers. One of the most expensive things an organization encounters is attracting and retaining talented professionals. Older workers typically have a wealth of institutional knowledge that will disappear when they leave. Instead employers may allow a near-retirement worker to cut hours or switch to a contract role to help train and mentor junior staff. Being able to retain the value of this human capital can be a big incentive for companies. There could also be cost savings to keeping these older workers. Besides them working fewer hours and thus getting a smaller paycheck, the company may not have to provide other benefits. If they are over age 65, they can access Medicare for their health insurance.

The retirement landscape is always changing. Whether you are an individual trying to map out your own post-retirement years or an HR professional trying to determine the impact phased retirements will have on your company’s retirement plan; the Retirement Consultants at Pension Consultants can help. Give us a call at 800-234-9584.


PCI’s archived blog entries are dated, the rules and statutes referenced may have changed. The analysis or guidance within these blog entries may have become stale, dated, or no longer accurate. PCI will not update or change these entries to reflect the latest analysis or development.
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