Look at Labor: Will You Work Until You Drop?
Maybe that's a good thing, experts say.
Jeff Parmet, Potomac resident, president of his HOA and guitarist, never thought that his retirement would look more like a second career. But like so many other retirees across the United States, Parmet has felt the pressure to return to work.
“Work harder, work longer—that appears to be the new motto for older Americans,” a 2009 PEW studied predicted. “Those who turned 55 in the current decade display a much greater inclination than their predecessors to remain active in the labor market.”
The numbers paint the picture: Bureau of Labor statistics show that the year 2016 will see an increase of more than 11 million adults aged 55 or older in the work force—an increase of about 5 percent from 2006.
There are many reasons for this increase—first among them being a lack of confidence in retirement savings and benefits.
In 2010, PEW reported that nearly a third of all Americans lacked confidence in their ability to retire on savings and investments made throughout their lifetime.
At 66, Parmet is eligible to receive full Social Security benefits, but even coupled with a generous pension plan from over 20 years in technology litigation, it isn’t enough to pay the bills.
“I had three kids in school, a big house in Potomac, and soon came to realize—like so many people every day—that I couldn't afford to retire," Parmet said, "not unless I wanted to really drastically change my lifestyle, which we didn't want to do."
Parmet retired in 2003 at the age of 56 and a few months later started working again as a tech litigation consultant. At first his workload looked more like a hobby. His former company, PricewaterhouseCoopers, sent him some overflow cases, which helped him get started. From there, referrals started coming in.
When Parmet built his website, DisputeSoft, business really started to grow and he began to hire contractors, himself. Parmet says he now works about 14 hours a day, almost seven days a week.
"They may not need to or want to work 40 hours a week, but many [retirees], more than they thought, are going to need to work at least a little because they have no retirement savings,” said economist Stephen Fuller, director of the Center for Regional Analysis at George Mason University.
"The Baby Boom generation isn't as rich as they thought they'd be. They had a really good life. They had four color televisions, they had all the neat cars, good clothes, they had nice vacations, they spent their money and they haven't really confronted the cost of retirement. Well, there's an easy solution here: Keep working."
With America’s life expectancy on the rise, many others like Parmet find themselves working past traditional retirement ages. When America’s retirees first started receiving monthly Social Security payments 70 years ago, the average life expectancy was just over 66, according to a Senate report on aging. At that time, benefits didn’t kick in until a retiree reached 65. Benefit payments weren’t expected to last longer than a few years after a worker retired.
Today the average 65-year-old is expected to live another 18 to 20 years, and the Baby Boom generation boasts a population of nearly 78 million.
According to Fuller, increased life expectancy and the parallel increase of older adults in the work place will bring about some cultural changes, as well as financial ones.
An Encore Generation
The term “encore generation” has been coined to describe the emerging period between traditional middle age and the age that someone becomes unable to remain self sufficient. There is now a larger gap between the active, working years of middle age, and the relative dependency of old age.
"My interest in this encore generation is that I see them as valuable human resources that know how to do a lot,” Fuller said, an encore generation member, himself, at 72. “They're smart, they've been educated, they have skills and the most important, irreplaceable asset—they have experience."
The Washington Metro area may be one of the first areas to experience these changes in the work force on a large scale.
"The jobs that benefit from experience enable people to hold those jobs longer. That’s Washington’s job market,” Fuller said. "People come here because they like their kind of work."
In areas where the fast-paced Washington attitude isn’t as prevalent, you’ll still find retirees starting to work again. From volunteer work to social work, substitute teaching or working as greeters at Walmart, seniors and employers have found ways to keep working.
"McDonald's knows how to use [retirees],” Fuller said. “If you've ever sat in a McDonald's for an amount of time, you see the different kinds of workforces they use over the course of a day. They tend to have older people in the morning—they get up early. People are jolly; they're having a good time. It's like a breakfast club."
Experts say the added benefits of working longer at rewarding jobs are better mental and physical health going into old age. Anywhere from between 10 to 20 percent of America’s seniors are living with depression, according to reports. Thousands more may be experiencing depressive symptoms just below a full diagnoses. Life changes, from chronic pain to loneliness as children move and spouses or friends die, can increase the risk for depression, or make existing depression worse, according to the National Institutes of Health.
“It's waking up in the morning and not having a purpose, not feeling important in some way,” Fuller said. “They need the socialization. It's been shown that people who work longer, live longer, and they're healthier."
Business and government would do well to start actively looking into ways to keep retirees working in some capacity to capture their knowledge, energy and productivity, Fuller said.
The AARP recently reported on a study showing that the trend was already growing, but has a way to go.
“We're living longer; culturally we're going to have to get used to a society where people are working longer," Parmet said.
"I never imagined in my life that I would have my own business. The encore for me was starting my own business at the age of 56 and seeing it flourish. It keeps me fully occupied and engaged, mentally and physically. It's a whole new career, and I don't see an end to it."