Today we continue our coverage of the great retirement book What Retirees Want. It is packed full of great information and statistics about the state of retirement today.
If you’ve missed any posts in this series, there are two ways to catch up. You can begin with the first post, which is an introduction and overview of the book, and click through to the next posts at the end of each one you read. Or you can check out my retirement category and scroll through the posts there.
Like with other books I’ve reviewed on ESI Money, I will share some key passages from this one and give my thoughts on their conclusions.
This book has a lot to say about working in retirement and I shared some of that last time.
Today we’ll continue with their thoughts on the subject.
Let’s get started…
Working in Retirement
We ended the last post in this series comparing those who work in retirement for the money versus those who work more for other benefits (social, mental challenge, purpose, activity, etc.)
We start today’s post with some thoughts along the same lines.
Here’s what the book says:
In surveys of the general public, and even of pre-retirees in their fifties, respondents anticipate that they’d work in retirement primarily because they need the money. However, when actual working retirees are asked about their reasons for working, they paint a different picture. Money counts a lot, but not as much as staying mentally sharp. Other common motivators include maintaining social connections, staying physically active, challenging oneself, and avoiding boredom.
Four in ten working retirees say they can’t imagine not working. Retirees who work feel more stimulated, connected to others, and proud of their accomplishments. They can achieve satisfying work-leisure balance, pursue personal and entrepreneurial ambitions, and use work in retirement as the chance to give back. Most telling, more people say they work in retirement because they want to than because they have to. Those who choose to work in retirement can significantly improve their finances, but work has great value beyond the paycheck.
Let’s break here for a few thoughts from me:
- Even after all I’ve said about the definition of retirement changing, it hasn’t changed completely and I would guess that most people still have the idea that when you retire, you don’t work. But if you do work, they believe there’s only one reason for that — you need the money. Why else would people work in retirement?
- At least that’s what people think before they retire. Once they do retire, they realize there are all these other benefits of working that they never really considered (but that they might miss now). And so they keep working because there’s more benefit to them in working than not working.
- Staying mentally sharp is one reason I still work in retirement. I want to keep my mind active and challenged and writing for a website certainly does that (FYI, I also read, do puzzles, etc., so work isn’t my only activity that’s designed to keep me sharp.)
- We’ll get to many of the benefits of working in a moment, but for now let me address one of them: “avoiding boredom”. This is the worst reason for working IMO. I have hundreds of fun activities listed that will help you avoid boredom. And did I mention they are FUN? If you need to work to avoid being bored, your imagination needs a recharge.
- “Use work in retirement as the chance to give back.” This is another reason I keep writing. I am determined to help people get a better handle on their finances which, in turn, will make their lives better.
- “More people say they work in retirement because they want to than because they have to.” We saw this last post as well. It’s telling to me that working for money in retirement is in the minority. That is certainly a new trend as well IMO as back in the day the only reason people seemed to keep working was they needed the money.
Staying Active in Retirement
Next the book spends a bit more time getting into the details of why people work in retirement — kind of dissecting each of the major reasons.
They begin with staying active as follows:
Retirees know that staying active and engaged is healthy. Eight in ten agree that work helps people stay more youthful, and two-thirds feel that, when people don’t work, their physical and mental abilities decline faster. A study of 83,000 older adults across 15 years found that people who worked past age 65 were about three times more likely to report being in good health and about half as likely to have serious health problems, such as cancer or heart disease. As one retiree put it: “If you don’t work, you shorten your lifespan. You get old faster.”
My thoughts:
- I would agree that work does help people stay more active and by doing so, this improves their health (or at least keeps it from declining as fast as it would otherwise).
- I take a bit of an issue with this: “two-thirds feel that, when people don’t work, their physical and mental abilities decline faster.” I might agree on the mental ability side, but I don’t think that physical abilities decline — or have to decline — if you don’t work. For instance, let’s say instead of working 15 hours a week you exercised 15 hours a week (working out at a gym, walking, playing sports, etc.) This would do as much or more for you physically as working would. And since some studies show that exercising helps you mentally as well, it could be that you’d benefit more mentally by exercising than by working.
- That said, I know some people aren’t “exercisers”, so work does seem like a good option for them to stay physically active and mentally sharp.
- I’m wondering if people who work longer have less health issues or if those who have fewer health issues work longer on average (because they can).
- “If you don’t work, you shorten your lifespan.” I don’t buy this 100% either. I think if you don’t work and you sit around all day watching TV then yes, you shorten your lifespan. But if you don’t work and instead you meet regularly with friends, travel a lot, exercise moderately, and have a hobby or two you enjoy, then you are probably at least as good as if you worked — maybe better.
- In the end, I don’t want to discount the value of working in retirement, because there are many worthwhile advantages to it. But I don’t want to over-sell it either. I don’t want to paint it as if you MUST work or else you’re going to live a worse life and die much earlier. I simply don’t think that is the case.
- BTW, when I list “work” in retirement as a recommended category in my list of retirement activities, it’s not just work. It’s “work or work-like activities.” Work-like activities are things that offer the benefits of work without being work. The best example: volunteering. You can get all of the non-monetary benefits of working from volunteering and maybe even a better purpose in life to boot.
Connecting Socially at Work
Next they move on to discussing the social benefits of working:
Social connections also prove very important. When we asked non-working retirees what they miss most about work, they said it’s the social connection in the workplace. Dr. Charlotte Yeh underscores the point: “We did some focus groups on loneliness among retirees. In one group of men, they all said when they were working they had colleagues, friends, and were very active. When they retired they expected to continue to have the same network of friends. But the door came down and it wasn’t the same anymore.”
Some thoughts from me:
- I’ll begin by saying I do recognize that being socially connected is important in life — and retirement is no different.
- I’ll also say that what each person needs as far as social connections varies widely from person to person. Some need a lot, some need a little.
- I personally don’t need much. So between my family, acquaintances at the gym, pickleball friends, and a few others, I am more than covered. If anything, I’d prefer more time alone. Growing up an only child of a single parent can make you used to (and liking) being alone. My mom was the same way. My step dad used to say that she and I could be in the same house for days together, not say a word to each other or be around each other much, and we’d both be as happy as clams. 😉
- I never had a lot of social connections from work. Sure, I worked around people and I liked most of them, but it wasn’t like we left work and hung out together (I did have a couple friends where this happened, but this was the exception rather than the rule). So when I stopped working it wasn’t like I lost a ton of friends. I lost a ton of people I used to accomplish business goals with and that’s it — not a “social” loss IMO.
- Have people forgotten how to make connections outside of work? I mean really? You have to have work to make connections? That’s sad. Join a club. Take a class. Go to church. Play a sport. Deliver cookies to your neighbor. There are a million ways to meet other people rather than working.
- “When they retired they expected to continue to have the same network of friends.” If this is you, you need to change your expectations or you will be sorely disappointed. People who work together have one thing pulling them together — their common work situation. Take that away and most people no longer have much (or anything) in common. It’s like your friends from high school or college. If you’re lucky, you still have a few of them, but because life has pulled you apart, you’ve lost the vast majority of them.
Finding Purpose in Work
Next the book moves on to finding purpose through work:
For many, work in retirement kindles a new or renewed sense of purpose through doing good and mentoring others. There are matchmakers to help. Encore.org taps the talent of people 50+ who want to contribute the experience they’ve accumulated over the year to do good. The Encore Fellows program gives participants paid positions — usually half-time for a year — using the skills from their working lives on behalf of nonprofits and social enterprises. Major organizations embrace the program; a few even offer every retirement-eligible employee the chance to serve in a company-funded fellowship. The Encore Physicians program, supported by Kaiser Permanente Northern California Community Benefits, places retired physicians in part-time, paid roles in community health clinics.
Ugh. The dreaded “purpose” in retirement.
Here’s a situation where the book implies that having purpose requires “saving the world” or “giving back” in some way.
While finding your purpose in retirement might be one of these things, it also might be traveling. Or tennis. Or making pottery.
Your purpose simply needs to be something you find so exciting that it makes you get up each morning ready for a brand new day. Whatever that is for you can be your purpose.
I do personally like the mention of mentoring and I’ve been thinking of where I could add that to my time. Perhaps sharing basic financial principles with high schoolers in some form. Just thinking…
Four Reasons Retirees are Happy Working
The book next moves on to sharing the four main reasons people give for being happy working in retirement:
- They returned to early-career roles or passions – “I get to be an engineer again.”
- They returned to being individual contributors without the stress of managing others – “No more Monday meetings and weekly reports.”
- They can give back to their organizations or professions – “I enjoy sharing what I know with the next generation.”
- They can start their own business – “I’m working for myself and building something new.”
Some thoughts from me:
- “They returned to early-career roles or passions.” Often people get into a career because they love doing some activity. Then as time goes on, they get promoted, move due to company needs, and so on, getting farther and farther away from that thing they loved. So I can see how going back to their first love is a nice move in retirement.
- “They returned to being individual contributors without the stress of managing others.” Haha. I can relate to this. Work was so simple when all I had to manage was myself. Throw in more people over time, and the stress and pain goes up dramatically (at one point I was responsible for 800 people…so imagine that.) That’s one thing I love about running my site — it’s just me. And since I do what I tell myself to do, “we” all get along with little stress. LOL.
- “They can give back to their organizations or professions.” I don’t feel a need to give back to the business world, but I do like educating people on money management.
- “They can start their own business.” Yep. I’m feeling this one 100%.
How People Work in Retirement
Next the book shares some fascinating facts about how people work in retirement.
Some highlights:
Retirees want to be able to mix work with other pursuits. So most working retirees put in the equivalent of about half time. In terms of preferred work patterns, they fall into two almost equally divided camps. A little over half prefer working part time on a regular basis, which has the advantage of predictability and regular income. But nearly as popular is cycling back and forth between work and leisure. That can be on a seasonal basis, leaving time for special pursuits (camping in summer or skiing in winter). Or it can involve project based work, which is a good fit for many kinds of organizations.
Many see retirement as a chance to try something new or even pursue a career they were unable to explore when working full time.
The majority (60%) of working retirees we surveyed said they stayed in the same or a similar line of work, but that leaves plenty who switch. When retirees choose to stay in the same line of work, they say it’s because they’re good at it and they know how to balance it with the rest of their lives. Few feel confined to their careers for financial reasons. The top reasons retirees move to a new line of work are all about flexibility and fulfillment: work schedule, enjoyment, and the opportunity to learn new things or pursue a passion or interest. Making more money is seldom the motivation for a switch. Those who take breaks from work at the start of retirement are more likely to change line of work, perhaps because they had the time to explore new options.
Retirees often welcome the chance to work for their pre-retirement employers on a part-time or project basis — providing the employer with experience, continuity, and opportunities for knowledge exchange. Many are motivated to give back to their employers, sometimes by lending their experience to business improvement projects, sometimes by training or mentoring younger coworkers. Others seek ways to advance their profession more generally. Law enforcement executives such as chiefs of police tend to retire at relatively young ages, and it’s common for them to then join advisory or technology firms devoted to improving law enforcement work.
About one-quarter of workers over the age of 65 are self-employed as independent contractors or business owners. They’re three times more likely to be working independently than younger workers are, and their overwhelming reason is the ultimate flexibility of working on one’s own terms. Only 14% said they’re on their own because they couldn’t find employment.
Lots to comment on here:
- I work probably an average of two hours per day, so that’s 14 hours a week — just a bit below half time. LOL, based on the hours I used to work, 14 is less than quarter time. Hahahaha.
- I work in spurts as my work is completely flexible. For example, as I write this post, it’s the middle of August, 2021, though the post won’t go live until February 2022. That’s because I’m working more now so I can take 2.5 months off completely when we go to Florida this winter (we should be there by the time this goes live). So I can work more now and less in the future. I can work at 10 am, 5 pm, 3 am or anytime in between. It’s completely flexible and that’s a key benefit to making it work for me.
- FYI, running sites is also completely location independent. I have run my sites from home, while traveling in the US, while in Grand Cayman, and even while on a cruise ship (just checking and approving comments — nothing that took too much time.) So if I want to travel or do anything, having a job/business doesn’t slow me down.
- I would not like working for someone else with a set time to work, so if that was my only choice, I wouldn’t work at all. Having flexibility and ease of work is key for me to work in retirement.
- Since so many retirees don’t work for the money, they can “afford” to try new things — and work for the love of it. I think that’s pretty cool.
- I wonder what “staying in the same or similar line of work” means. If that’s a broad category (for example “business”) then it could mean anything. But if it means “car parts distribution”, that’s a lot more specific. Hahaha. Just wondering how close to the work they do now is to the work they did before retiring.
- “The top reasons retirees move to a new line of work are all about flexibility and fulfillment.” Yep, I can see this in my own life as well.
- “Those who take breaks from work at the start of retirement.” From what I’m seeing in the Millionaire Money Mentors forums, those who take breaks from work at the start of retirement are likely to never work again. Hahahaha.
- The stats about working for yourself is yet another reason to create a side hustle while you are working. That way, you can take something you like straight from working life into retirement. Plus it gives you the chance to build something you know will work and you like while you are still working. If for some reason your side hustle doesn’t pan out while you’re working, you can always try a new one.
Why People Start a Businesses in Retirement
Finally for this post, the book shares a chart on why people start businesses in retirement.
Here are the four reasons:
- I wanted to work on my own terms – 82%
- I could make more money – 30%
- I saw an opportunity for innovation – 27%
- I couldn’t get a job/keep my job – 14%
A few thoughts here:
- The book “Retirement Fail” hates the idea of starting a business in retirement. It’s interesting how their thoughts contrast with the thoughts in this book which portrays starting a retirement business in a generally positive light.
- I don’t really fit any of the reasons noted above. My reasons are that I basically wanted something I enjoyed doing that helped people and also challenged me mentally. So that’s different than what’s noted above.
- It’s interesting that the vast majority of people started their own businesses because they wanted to work “on their own terms”. Again, we see FREEDOM, even in work, at the core of having a great retirement.
That’s it for this time.
For the next post in this series, see What Retirees Want, More on Working in Retirement.
Ace says
Without minimizing the benefits of work-like activities …
I have to wonder about some of these surveys where so many people say they’re not working for the money. That may be true. Or, if they surveyed a true cross section of America, I suspect they *do* really need the money but feel that means they failed – so they convince themselves otherwise. Given the state of savings, I’m suspicious.
Bernd Doss says
As I read this segment., I was thinking about my past career, 42 years of military and civil service government work, and let my mind wander what my retirement life would be like going back to work, or work like activities. I do not believe that the writers considered military service in the categorical picture as work. It would be very interesting to hear other retired military personnel’s views on going back to work, or what they consider “work like activity. “