Many of us work with two kinds of coworkers — those who say they can’t wait to retire and those who swear they love their jobs so much they plan to work as long as they are able. I get the first group. Who doesn’t want to retire to a life of leisure without alarm clocks, meetings, conference calls and commuting in traffic?
The second group, however, I view with a somewhat skeptical eye. Sure, some of us have dream jobs that we can’t wait to dive into every day and we would be very happy working in them until we are simply unable to do so. But when it comes to working past “normal” retirement age (let’s call it 65 since that is when Medicare kicks in for American workers), how many of us are going to work that long because we truly want to, and how many of us are masking the reality that we might actually need to work well into retirement age due to financial reasons?
According to Gallup’s 2016 Economy and Personal Finance Poll, almost one-third (31 percent) of U.S. workers anticipate they will work beyond age 67. A slightly higher percentage (38 percent) expect to retire sometime between 62 and 67, with only 23 percent forecasting early retirement prior to age 62. Baby Boomers (workers born between 1946 and 1964) appear to be even more reluctant to retire at earlier ages. A separate Gallup study indicates that almost half of the Boomer workforce (49 percent) does not expect to retire until age 66 or older, with 10 percent suggesting they never expect to retire.
Know your numbers
Even if you are unsure as to which of these two camps you may find yourself, a good first step is to periodically run a retirement income projection to estimate how much pre-retirement income you could potentially replace at retirement time. The latest Retirement Confidence Survey conducted by the Employee Benefit Research Institute and Greenwald & Associates reports that only 19% of workers and 39% of retirees have tried to calculate how much money they would need to cover healthcare costs in retirement. Knowing how much income you could potentially generate in the future across a variety of potential retirement ages can help you plan not only for the retirement lifestyle you prefer, it can also help you plan for the possibility that life may hand you a giant bucket of lemons and force you to retire earlier than expected due to unforeseen events, such as a health issue or a late career downsizing. If you work with a financial planner, ask him or her to give you an estimate of your future retirement income. You will also want to get an update of your future Social Security retirement benefit amounts from the Social Security Administration.
Employee engagement after 65
A major concern among both employers and workers is just how engaged we are likely to be in our work past age 65. Exactly what does it mean to be engaged on the job? According to an Aon Hewitt study, employee engagement describes the level of an employee’s psychological investment in their organization rather than simply showing up and going through the motions to collect a paycheck. On the employee engagement front, a 2013 Gallup survey actually has some encouraging news. Currently, almost one-third of Boomers (31 percent) are engaged in their work, compared with 38 percent of Traditionalists (pre-Boomers born before 1946), 30 percent of Gen-X workers, and 28 percent of millennials. Perhaps most interesting is the observation that Boomers who expect to retire later and work beyond age 65 are even more engaged (34 percent) than Boomers overall.
If you truly are engaged in your job, and you love what you do, where you do it and whom you do it with, then you are in your happy place career-wise and should certainly keep working as long as you wish. But what if someday you become that less-than-engaged worker, yet you aren’t ready or can’t yet afford to retire? What are your options then?
You could try to hang on longer and maybe find a way to love your currently uninspiring position, but that seems like a disservice to both you and your employer. Instead, you could contemplate a late-career job change to something you do love that engages you more fully. This proposition is not as scary as it may seem. According to the New Careers for Older Workers study conducted by the American Institute for Economic Research (AIER), 82 percent of survey respondents not only made a successful career change after age 45, but many of them also received higher earnings.
As an alternative, you could also restructure your lifestyle to live on less. This way, you could successfully retire from a job where you’ve lost that lovin’ feeling without prematurely draining your retirement savings.