Limited savings, longer life conflict with desire for self-employment, part-time work

Older workers today are changing the concept of retirement as they live longer and work well past traditional retirement age - some even returning to the workforce after they "retire" and/or opting for "portfolios" of paid and volunteer positions, according a new MetLife Mature Market Institute study, Living Longer, Working Longer: The Changing Landscape of the Aging Workforce. As an example of the state of retirement, this study says 37 percent of those age 66-70 are either working of looking for work.

The survey conducted by David DeLong & Associates, Inc. and Zogby International, joins a growing stack of research and information showing older Americans are continuing to work after normal retirement age, many because they want to keep their bodies and minds active and others who need the income for daily living.

Unlike other industry studies which have offered predictions of the aging Baby Boomers' retirement expectations, the MetLife "Living Longer, Working Longer" study examines the actual work experiences of employees age 55-70. The study findings were unveiled today at a symposium hosted by MetLife and the International Longevity Center-USA. 

"Today, older workers view retirement as a desirable state, not a particular date," said Dr. David DeLong, author of Lost Knowledge: Confronting the Threat of an Aging Workforce and a research fellow at the MIT AgeLab. 

"When we conducted the study, we found that mature workers are struggling to balance the conflicting pressures of income security, post-retirement-age employment and, often, age discrimination - perceived or real - as they look for a sense of security and meaning during their 'retirement' years." 

The Working Retired

The study found that 78% of respondents age 55-59 are working or looking for work, as are 60% of 60-65 year-olds and 37% of 66-70 year-olds. 

Across all three age groups, roughly 15% of workers have actually accepted retirement benefits from a previous employer, and then chose to return to work (or are seeking work). 

These employees, who have become known as the "Working Retired," represent 11% of 55-59 year-olds, 16% of 60-65 year-olds and 19% of 66-70 year-olds. 

Motivations for Work

Employee motives for returning to and/or remaining in the workplace differ significantly by age. Among workers age 55-59, economic incentives take precedence, with 72% of employees in this age bracket citing "need income to live on" as a primary reason for working. 

Economic incentives were also the number one motive cited by 60-65 year-olds (60%), followed by a desire to "stay active and engaged" (54%) and "do meaningful work" (43%). 

Among 66-70 year-olds, however, 72% of employees cited the desire to "stay active and engaged" as a primary reason to work, followed by "the opportunity to do meaningful work" (47%) and "social interaction with colleagues" (42%).
 
Redefining Retirement 

The MetLife study found that retirement isn't necessarily defined by an employee's age or work status. When asked what retirement means, many respondents indicated "freedom from the demands of work" (26%), followed by "more control over one's personal time" (24%) and "limited financial concerns" (21%). Another 12% of respondents identified "the ability to pursue other opportunities" as their definition of retirement. 

"As organizations seek to attract and retain older workers, they must be careful not to lump all 'older workers' into the same category - it's important to differentiate the work experiences and motivations of these employees. While some may be working for financial reasons, others place a special premium on feeling engaged and doing work that means something," says Sandra Timmermann, Ed.D., gerontologist and director of the MetLife Mature Market Institute. 

"Recruiting and retaining older workers requires careful consideration of job design, work environment, and creating new and challenging opportunities." 

"Working Retired" on a Quest for Meaning 

Among the Working Retired - i.e., employees who are receiving retirement benefits and subsequently returned to work - the quest for meaning is one of the major forces drawing them back into the workplace. 

Among Working Retireds age 60-65, the number one reason cited for taking retirement benefits was "wanted to try something new and different" (20%). 

This option was cited much less frequently by 55-59 year-olds (12%) and by 66-70 year-olds (7%), suggesting that workers in their early sixties, who may be in a transitional period between full-time work and retirement, are particularly eager for new experiences and challenges. 

"Becoming self-employed or starting a business" was another common reason for taking retirement benefits - cited by 19% of 66-70 year-olds, 7% of 60-65 year-olds and 8% of 55-59 year-olds. 

Overall, some 28% of respondents age 55-59 listed themselves as "self-employed or business owner," exceeded only by 34% who reported working for a "private sector business." More than one-third (36%) of 60-65 year-olds and 42% of 66-70 year-olds report being self-employed or business owners. 

"Clearly, these findings suggest there are conditions in the job market and in older workers' desire for autonomy and flexibility that make self-employment an attractive option for those in their late sixties," said Dr. DeLong. 

"As the oldest Boomers turn 60 in 2006, their desire for autonomy and trying new things could portend a significant wave of departures in the next five years. Employers will need to identify ways to retain the valuable knowledge of these workers." 

Financial Reality Sinks In 

While aging workers crave autonomy and flexibility, financial necessity is driving many older employees to work, whether on a part-time, full-time or self-employed basis. A significant portion (18%) of Baby Boom workers age 55-59 report that they expect to have no access to retirement benefits (e.g., pension, 401(k), SEP) when they stop working and are likely to feel compelled to work well past traditional retirement age. About 14% of workers age 60-65 and 10% of workers age 66-70 expect to receive nothing but Social Security when they finally stop working. 

"Retirement experts have been predicting for years the serious repercussions that will arise as Baby Boomers' lack of retirement assets collides with their increased longevity to create widespread economic hardship. The rational solution - to continue working full-time beyond traditional retirement age - is at odds with many Boomers' interests, values and priorities for their retirement," notes Dr. Timmermann. 

Among the other key survey findings: 

- Help Not Always Wanted: In addition to the financial pressures, many aging workers face an additional barrier to workplace fulfillment: the perception of age bias. When asked about unsuccessful job searches, older workers most frequently gave reasons suggesting or implying "age bias." Employees age 55-59 blamed "age bias" 39% of the time, while 60-65 year-olds and 66-70 year-olds identified bias as a barrier 42% and 60% of the time, respectively. 

- Part-Time Preferred as Workers Age: Of those still in the workplace, about 76% of 55-59 year-olds work more than 35 hours a week, and only 39% of 66-70 year-olds work that much. Nearly four in 10 (39%) of those age 66-70 are working fewer than 20 hours a week. Among those seeking work in this age group, 56% wanted less than 20 hours per week. 

- Portfolio Work: In interviews done for this study, some older workers talked of their lives as taking on a "portfolio quality" - a mix of part-time work for pay, volunteer work, and travel, along with more time for hobbies and family. Supporting this portfolio metaphor, 25% of survey respondents across all age groups currently earn income from more than one job. About 20% of those working have two jobs, and another 4% have three jobs. 

- Staying Put: Stereotypes to the contrary, only 15% of 66-70 year-olds moved to warmer climates once they started receiving retirement benefits, while 21% of 60-65 year-olds and 28% of 55-59 year-olds chose to relocate. Among employees who had access to retirement benefits when they were younger, relocation rates are somewhat higher. 

- A Healthy Aging Workforce? Approximately half of all respondents surveyed characterize their health as excellent or very good - 49% of 66-70 year-olds, 52% of 60-65 year-olds and 54% of 55-59 year-olds. These findings indicate that the aging workforce appears to be healthy enough to handle the physical demands of work, at least for the foreseeable future. 

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