Retirement no longer means an end to working

When Social Security was put in place in the 1930s, the retirement age for full benefits was set at 65. That number was picked for a good reason: the majority of workers—worn out by a lifetime of manual labor—didn’t live much beyond that age, on average.

Things are different today. The life expectancy of a woman age 65 is approaching 90. The fastest growing segment of the population is the 90-plus category. So does retirement at 65—or as early as 55, an age that was seen as the ideal by baby boomers just a few years ago—still make sense? Not to a growing number of Americans over age 65, says the American Association of Retired Persons. The latest AARP survey found that 5.1 million Americans older than age 65? about 14.8% of the workforce—were still earning a paycheck. That compares to 10% about 20 years ago. Participation in the workforce by retirement age Americans is expected to continue to rise. Last year about 45% of those surveyed who were between age 50 to 70 said they expected to work into their seventies or later, AARP says.

Welcome to the new retirement paradigm. For a variety of reasons, both personal and financial, a growing number of workers are continuing to show up at the office past normal retirement age. For some, the reason is financial: stingy pension plans and a lack of savings have forced them to continue earning a paycheck. For others it is a quality of life issue: the prospect of sitting on the front porch rocker for 25 or more years scares them.

These trends may seem hopeless to workers stuck in jobs they hate. In that case retirement experts recommend a number of strategies:

  • Pay off debt as quickly as possible and cut expenses. It is much easier to support yourself in retirement without the drag of debt.
  • Boost your saving until it hurts.
  • Consider downsizing your home, or moving to a cheaper area.
  • Consider changing careers or working for yourself.
  • Plan on working part-time in a less stressful position after leaving your job.