Working in the New Retirement
By Kristi Vaughan
If you think retirement is all about sitting back in a rocking chair and clipping (bond) coupons, then you haven’t caught the new retirement wave. Brought on by longevity and, more recently, investment setbacks, the new view of retirement quite often includes that four-letter word, W-O-R-K.
In fact, according to several recent surveys, older workers are among the fastest growing segment of the workforce. Just take a look at these numbers:
- A 2004 AARP study, Aging and Work, found that labor force participation by Americans aged 55 and over has been climbing since 1985.
- The same study shows that more than half of American women between the ages of 55-64 are in the workforce.
- The federal Bureau of Labor Statistics projects that the number of men and women aged 55 and older who are in the workforce will increase nearly 50 percent by 2012 from 2002 levels.
So what does this mean for your finances? And what kind of jobs might you expect?
Financial implications
The reasons for working during retirement are as varied as the workers themselves. If one of your reasons for working is financial, you might want to consider how your earnings will affect your current and future Social Security income. There are several potential effects:
- If you are already receiving Social Security payments but have not yet reached your full retirement age, as defined by Social Security, your benefits will be reduced by $1 for every $2 earned once your income exceeds a certain level ($11,640 in 2004).
- Beginning with the month in which you reach full retirement age, there are no limits on how much you can earn while also receiving Social Security payments.
- An added potential benefit of working during retirement is the possibility that your retirement earnings could increase your Social Security payments. This happens if your most recent earnings exceed the earnings base previously used to calculate your benefits.
Where will you work?
Work done by the new retiree is quite often different from that pursued in an earlier career. Perhaps you have a passion you’ve always hoped would earn money. Or maybe the idea of full-time work is more than you’d like. No problem. There is a vast job market for older workers.
A 2003 AARP poll, A Top 10 List for Future Employment suggests the following job possibilities:
- Customer service representative
- Teaching assistant
- Teacher
- Retail salesperson
- Landscaper or groundskeeper
- Cashier
- Computer support specialist
- Real estate agent
- Secretary or receptionist
- Truck driver or courier
- Bookkeeper or accounting clerk
- Child care worker