Americans envision working until their 60s before retiring, but the reality can look very different.
People today expect to retire at 66, according to Gallup’s annual Economy and Personal Finance survey, up from 60 in 1995. The problem with that is that the average retirement age is currently 61.
This was a continuing disconnect with the agency’s finding over the years that the reported retirement age of retirees was about five years lower than that expected by non-retirees. retirement age.
It also highlights the challenge of planning for a retirement that may come sooner than expected, whether desired or not.
“Many people develop health problems as they age that force them to retire early,” Richard Johnson, director of the Retirement Policy Program at the Urban Institute, told Yahoo Money. “And others find that their employers no longer want them.”
Barriers to staying in work at older ages
One explanation for this gap between “hope” and reality is human nature and perhaps a dollop of optimism. Simply put, life gets in the way.
Of the nearly half of retirees who retired earlier than expected in the latest annual survey by the Employee Benefit Research Institute (EBRI) and Greenwald Research, two-thirds say their early retirement was for some reason out of their control.
The harsh reality is that people tend to leave the workforce earlier than planned due to a health problem or taking care of an elderly relative or partner takes priority. Also, ageism is alive and well in the workplace, and older workers are often phased out or pushed into retirement by their employer.
“Many employers seem reluctant to hire older workers, either because they fear that older workers are too expensive, don’t have the right mix of skills, especially in technology, or will retire soon and are therefore not worth the cost of hiring , of recruitment. and education,” Johnson said. “So many older people who are unemployed never find work.”
Changes in the workplace resulting from the pandemic
Embracing telecommuting can help mitigate some of these early retirements resulting from health or mobility issues for some people. One of the major trends emerging from the pandemic is that the genie is out of the bottle when it comes to remote work arrangements. Employers have found that remote workers are productive and performance is not affected.
And this is a game changer for older workers. The ability to work without navigating a commute or dealing with a workplace that is not ergonomically designed gives workers with health problems or caregiving duties flexibility and the opportunity to stay at work longer.
Shifting to contract or short-term projects, another trend ignited during the pandemic, can also help someone stay on the job longer or keep current work experience on their resume while pushing for a full-time position.
The beauty of it is that a full-time position can happen with this very employer. Employers are more willing to risk hiring someone over 50 after they’ve had a chance to work with them and figure out if they “fit” with the troops and so on.
Contract positions can also keep someone in the workforce in the self-employed sector as they stitch together a quilt of jobs to create a sustainable income stream. In fact, the number of self-employed workers has increased from about 8.2 million in the spring of 2020 to 9.7 million in July of this year, according to the Bureau of Labor Statistics.
It is not an all or nothing issue when it comes to retirement ages.
“Many older adults have to keep working to pay the bills, and many choose to work because they like it,” Ramona Schindelheim, editor-in-chief of WorkingNation, told Yahoo Money. “For many older workers, it can be a combination of both. Unfortunately, many face some significant barriers to pursuing meaningful, well-paying jobs.”
Kerry is a Senior Writer and Senior Reporter at Yahoo Money. Follow her on Twitter @kerryhannon
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