Reaching 65, but not ready to retire
Many of today’s employees find more incentives to keep on working than past generations did
WASHINGTON — Paul Hyman doesn’t much care for golf or beach resorts. He doesn’t have a boat and isn’t any good at painting.
Hyman, 74, isn’t into many of the things the friends his age say they like doing in retirement. The things that are important to him — social connections, friends, new challenges — he gets at work. So the partner at Hyman, Phelps & McNamara, a Washingtonbased food and drug law firm, says he isn’t retiring, at least not for now.
“Most of my contemporaries in law school, or a lot of them, have retired,” says Hyman, who helped launch the firm nearly 35 years ago. “A lot of them were sort of happy to stop doing what they were doing. I kind of like what I’m doing.”
Hyman is among a growing group of people working full time beyond age 65, generally considered full retirement age.
As of August, about 60 per cent of workers 65 and older had full- time jobs, up from about 55 per cent in 2006, according to the U.S. Bureau of Labor Statistics. Over that time, the share of workers with part-time jobs fell to 41 per cent from about 44 per cent.
Economists say it’s only natural that people are working longer because they are living longer. Today, one in four people who reach age 65 will live past 90, according to the Social Security Administration. One in 10 will live past 95. With such longevity, financial advisers say, people need to be more creative about finding new income in retirement — which more often makes a job a regular part of the plan.
“The old idea of retirement of moving somewhere sunny and playing a lot of golf, that’s a 50-year-old idea,” says Andy Sieg, head of Global Wealth & Retirement Solutions for Bank of America Merrill Lynch, which is releasing a series of reports on how the views of retirement are changing.
The old idea of retirement of moving some where sunny and playing a lot of golf, that’s a5 0-year-old idea.
ANDY SIEG HEAD OF GLOBAL WEALTH & RETIREMENT SOLUTIONS, BANK OF AMERICA MERRILL LYNCH
“People are screaming out for a new proposition. They want to stay engaged and be in the workplace.”
Forty- seven per cent of today’s retirees say they have either worked or plan to work in retirement, according to a survey by Merrill Lynch and Age Wave, a research group.
And the study found that 62 per cent of retirees said their top reason for working in retirement was to stay mentally active, double the 31 per cent who said they worked mostly for the money.
Not that the money isn’t a strong motivator. A survey released by the Federal Reserve in August found that 31 per cent of Americans have no money saved for retirement and are not receiving a pension. That included 19 per cent of people ages 55 to 64.
How did they plan to make up for that shortfall? About 25 per cent of those surveyed said they would work as long as possible.
Today’s workers also have greater financial incentives to keep working than past generations did, says Richard Johnson, a senior fellow at the Urban Institute. Fewer workers are earning pensions. And working longer can help people sock away more savings — which more people are relying on for retirement income
Those who delay collecting Social Security see their annual benefits grow by eight per cent for every year beyond their full retirement age, until they reach 70.
Paul Brown, 67, a Baltimore security guard, says that because he’s in good health, he plans to keep working and to put off Social Security until 70. The money he makes is enough to cover his food, housing and transportation. And Brown, who worked for nearly three decades as a painter for a U.S. federal agency before transitioning to security, says the bigger Social Security benefit will be a nice supplement to the income he is expecting from his pension.
Brown also likes walking 15 minutes to work in the afternoons to a nearby building, where he keeps watch at night with another guard.
“When I was a kid, I thought I would grow up and retire and play all day again,” Brown said. “But it doesn’t work that way.”
Even though he works 40 hours a week, he says, he still has plenty of time to see his cousins, go to church and volunteer at a local food bank.
Retirement, he expects, will involve more of the same, with more time free for volunteering.
Another factor making it easier to work longer: the rise in education. People with office jobs or other positions less physically demanding can work longer than people in blue-collar jobs that are more difficult to keep up with as they age. Nearly 32 per cent of people 25 and older had completed at least four years of post-secondary education in 2013, up from about 18 per cent in 1983.