Source: Families and Work Institute

Working in retirement may still sound like an oxymoron, but not for long. Just as people in their twenties are now creating a new life stage of transitioning into the workforce, the generation of workers currently in their fifties and sixties is redefining the notion of "retirement." Already today, one in five workers aged 50 and older has fully retired from his or her former career job but currently is working for pay in a new role, which we define as a "retirement job." And this will soon become the "new normal" — fully 75% of workers aged 50 and older expect to have retirement jobs in the future, according to a groundbreaking new study by Families and Work Institute and the Sloan Center on Aging & Work.

"Working in retirement" is quickly becoming a new stage in career progression. Following the traditional path of early-, mid-, late-career employment, but prior to total withdrawal from work, this new stage is a bridge that tends to emphasize working by choice and for enjoyment.

Using data from the FWI's National Study of the Changing Workforce (2008), this analysis of adults working in retirement reveals some surprising insights. For example, a typical assumption is that retirees work primarily for money. Although maintaining a comfortable lifestyle is an important motivation for more than half, it is not the only reason: 31% report that they are working to stay active, and 18% say they want to contribute and be productive. Less than one in five report working in retirement due to insufficient income, though they do earn less money than those who have never retired—the typical median yearly income among those working in retirement is $21,000 less than those who have never retired.

Most "working retirees" really enjoy their work. Furthermore, these workers aren't coasting. The majority of working retirees report working full time and wanting to work the same or more hours. Over half say they have no plans to leave their current employment situation for at least another five years. And nearly 10% of those working in retirement state that they will continue doing the same work until they die.

Introduction and Overview

Until recently, most of us considered retirement to be a phase of life more or less devoted to a combination of unpaid activities, including volunteering, caring for family members, taking care of ourselves and enjoying leisure time. Working during retirement used to be considered to an oxymoron. Yet, as growing numbers of workers continue to work for pay during their socalled “retirement,” this is no longer the case.

Families and Work Institute (FWI) and the Sloan Center on Aging & Work at Boston College partnered to explore the implications of this growing phenomenon — for both employees and employers. Focusing on workers aged 50 and older, we examine what it means to be working in retirement and how employers might best meet the needs of older workers, to the advantage of workers and the employers themselves.

Key findings include:

• One in five workers aged 50 and older has a retirement job today; 75% of workers aged 50 and older expect to have retirement jobs in the future.

• People work in retirement for a variety of reasons, including the opportunity to earn more money for a comfortable retirement and because they would be bored if they weren’t working.

• Those working in retirement are highly satisfied and engaged in their work.

• Using a number of critical indicators of workplace effectiveness, those working in retirement rate their workplaces more positively than those not yet retired.

• A significant number of employees transition to self employment for their retirement job.

• While those working in retirement work fewer hours, on average, than those not yet retired, the majority of working retirees report working full time and wanting to work the same or more hours.

By most measures, those working in retirement are doing quite well. Overall, they are satisfied with their lives, their jobs and their workplaces. While a substantial number cite personal finances as one reason why they continue to work, for the most part, they enjoy their work. In fact, over half say they have no plans to leave their current employment situation for at least another five years. Nearly ten % of those working in retirement state that they will continue doing the same work until they die.

Contrary to the assumptions of some that older workers want to “coast” until they can permanently exit the labor force, we find that when those working in retirement have jobs that are challenging and provide learning opportunities, they are most likely to be engaged in their jobs.

Why is it important to take a good look at these new patterns of labor force participation?

Looking at the age demographics of the 21st century workforce should be enough to convince us that we must consider the implications of new forms of retirement.

+ Full Report (PDF)