After reviewing the financial literature on retirement, interviewing 60 to 80-year-olds retired from two to eighteen years and observing the national and global economic and political landscape closely; I can distill my retirement advice to you in one word: DON’T. And while, I am sharing advice you did not ask for and may not want to hear, there’s more. Remember the financial advisor who told you that once you stopped working, you would need 60-70% of your working income to live in retirement? My 70-year-olds said, “Fire that guy!” Between out-of-pocket health care cost, fluctuating gas prices and having lots of time on their hands to go places and do things; the 70+ crowd tells me their expenses are the same if not more than when they worked.
If you have a job you enjoy, stay there. If you have a job that is tolerable and you have health benefits and a safe work environment, hang in there. If you like your work, but not the people running the company---stay there too, unless it is family-owned; your senior leadership team will probably get promoted or recruited away by some other unsuspecting firm. If you hate your job, have pangs of anxiety on Sunday night thinking about the week ahead or are planning to fake your own death because you are running out of PTO; then by all means start networking, post your resume on LinkedIn and look for a new job.
The Case for Staying Put
The Bureau of Labor Statistics (BLS) numbers for June 2012 were released last week and fewer workers 55+ were unemployed (6.2%). The summary from BLS says, “Recent history has shown greater employment stability as age increases.” Don’t believe that for a minute! The truth is—those workers 55+ gave up looking for a job because no one would hire them. Remember the unemployment numbers count people actively in job-search mode and receiving unemployment compensation from their state. I know people 55+ that piece together a living working 2-3 part-time jobs unable to afford benefits at any of them. They are not technically unemployed and not reflected in the BLS data. What happened to the 55+ workers not in the labor force? Some participate in the “underground economy” working for cash, others start their own business, and some are supported by their families until they reach age 62 and begin collecting a reduced social security benefit while others tap into their 401(k) accounts incurring early-withdrawal penalties if they are not 59.5 years old. In February 2010 nearly half (49.1%) of the 55+ workers were unemployed over 27 weeks. Now, it takes over a year for workers age 55+ to find a new job (approximately 56 weeks).
So you are younger than 55 reading this and thinking, this does not apply to me. Think Again! Are you 45-54? 6.3% of your age group was unemployed in June 2012. The BIGGEST LOSER of my readers? The 35-44 year old suffered 7% unemployment. It may be partly due to the Age Discrimination in Employment Act (ADEA) defining workers 40+ as a protected class---so in job actions (i.e. downsizing, lay-offs, reorganizations, and reductions in force) an adverse impact analysis is performed by the company or their third party consultant to minimize legal action. The 35-39 year olds are not protected and it may skew the 7% number.
Take a look at these newly released numbers from the Federal Reserve: From 2007 to 2010, the wealth of the average American family plunged by 40 percent, taking it down to the levels of the early 1990s. That's not just for 40+ people-that impacts everyone!
Here’s my point: The employment situation is similar to a game of musical chairs right now. If the music stops, you want to have a chair (job) and if you are left standing and you are older---your time on the sidelines becomes a lot longer. AND, when you do get back into the game; it may be in a part-time job; 1099-contractor employment situation or as a temporary worker. Most experienced workers at 40+ find their salary drastically reduced after a period of unemployment. BLS economists call it underemployment.
I have a friend that just started a fabulous new job at age 60-great salary, company car and all the perks. That is the exception, not the rule. She networked and found an organization that valued experienced workers. Even then, it was an ongoing process. My friend met the guy who recommended her for the job several years ago and when this position became available recently; he thought of her first.
What is an experienced worker to do? Let me know your thoughts in the comment section below. You may comment anonymously, if you prefer. And remember to "follow" the blog and receive automatic notification when there's a new post. Follow me on Twitter: @workingover40. I'll follow you too.
This really is a superb article. Thank you for bothering to detail all of this out for us. It is a great guide!
ReplyDeleteWhile your bleak assessment of the job prospects may be true for larger companies that layoffs. I work for a public utility in the midwest. Working forever is not a dream or desire for me. I look forward to retiring and if it means a more simple life, so be it. Maybe we go from 2 cars to 1 and less cable & spending more time eating at home. I'm counting down in months-30 more to go until I'm 62. My wife is retiring 5 years after me.
ReplyDeleteHey Joe,
DeleteI'm in a similar situation, work-wise and temperment-wise, and will be retiring when I reach 62 in 27 months. Best wishes for a long, healthy, happy retirement to you and your wife.
Many people in their 50s don't quit their jobs, the jobs quit them. I am not sure how companies get around the ADEA you talk about. I was laid off and I was 53 years old. I was doing a good job and I did notice my performance reviews were declining, my boss told me to worry about it because my raise was still 3%, then in February totally out of the blue me and 8 others were laid off just like that. I'm still in shock. After 16 years. I did get 3 months in severance pay,and I've gone on many interviews. One of my co-workers just started a job at Target yesterday. He's married at least and his wife has a good job with beenfits. I'm single and paying $500 a month for COBRA. I'm scared about my future.
ReplyDeleteI was going to "like" this, but like didn't seem like the right term. I agree with what was said, but I don't like it. It's depressing but, as I know from experience, very true.
ReplyDeleteThanks for your feedback on this one. I have also heard from our friends on Twitter and Facebook. People seem to be in agreement that 65 is not a "golden number" for retirement. It reminded meof a great article I read in Kiplinger last summer: Too Young to Be Old.
ReplyDeletehttp://www.kiplinger.com/magazine/archives/too-young-to-be-old.html
I loved the title, so many of us are feeling that way. I've got some great interviews about people reinventing themselves coming up in the next few weeks. Thanks again for reading and commenting.
Here's the problem. By not retiring or leaving your job when you no longer can keep up, older workers ruin job prospects for their younger co-workers. A person who can retire at 62 or 65 at the latest should, so more younger people can be employed. Your best retirement advice is my worse nightmare.
ReplyDeleteGood advice in a very informative article. I'm self employed and get along well with my boss.
ReplyDeleteWell said. I've enjoyed reading through this blog after being forwarded it by a friend. Your posts are insightful and relevant to employees in their 60s like myself. I am turning 65 next year and plan to retire and probably work part-time or on a consulting basis. One point this post fails to point out is that the US social security system is only full-funded through 2033. At that point, the surplus money and trust fund runs dry.
ReplyDelete