How to Retire: Understand the Role of Working Longer

Christine Benz: Hi, I’m Christine Benz from Morningstar and welcome to the How to Retire podcast. It’s a companion to my book, which is also called How to Retire. Each episode will provide a bite-sized lesson about how to do some aspect of retirement well.

One topic that came up in several of the conversations in How to Retire was the role of work and how the border between work and retirement has become increasingly porous. Yahoo Finance columnist and author Kerry Hannon has focused on careers in personal finance for most of her career, and she was the perfect person to sit down to discuss the role of work later in life. Kerry is a self-described workplace futurist, and she is the author of several books about careers.

Kerry, thank you so much for being here.

Kerry Hannon: Well, Christine, it’s a delight. I am just thrilled to be here having this conversation with you.

Benefits of Working Past Traditional Retirement Age

Benz: Me too. I want to talk about something that you write a lot about. You’ve written several books about the topic of work and especially work with respect to older adults. People have heard about the benefits, the financial benefits certainly, of working longer, but maybe you can discuss what we know about the financial and nonfinancial benefits of continuing to work maybe past the traditional 65.

Hannon: It’s absolutely true. Even people who have retired, there’s that big trend to unretire now. Again, we’re talking a lot about workers who are white-collar workers. So, people who have had physical jobs, sometimes they can’t really segue into this in-between land where you’re continuing to work, but maybe a little bit more on your own terms. But what I love about work, I always say it’s not a four-letter word. I mean, there are so many wonderful things about work and the joy that we find in our work, and that’s the key, to find that.

But first, let’s tick off. There are a couple of great financial reasons. So, if you have, consider longevity. If you step out of the workplace at 65, my goodness, you could have three decades to finance in retirement. And if you’re not feeling that you’ve saved appropriately for retirement, it’s really important to continue in the workplace earning some kind of salary for as long as you can. And that helps you stave off dipping into those retirement accounts and letting them continue to grow. Potentially, you can keep adding to them. You can push back one of my favorite topics, and I think you talk quite a bit about this, too, is you don’t need to feel that urgency to tap into Social Security benefits at age 62, the earliest, or your full retirement age. But what the heck, you wait till age 70 when you really get the biggest bang for your check at those 8% roughly annual increases after your full retirement age.

Those are really some hard-core physical reasons to keep at it. But you can’t ignore the purely psychological benefits of being needed, of feeling relevant, of having a network of people, a community, of feeling like you are adding to the world in a way that you maybe in earlier parts of your career, you didn’t have that opportunity. So, Christine, I think we’ve got this whole smorgasbord of good reasons to stay on the job as long as you can.

What Does the Data Tell Us About People Who Work Longer?

Benz: What does the data say about people who work longer? Do they tend to be healthier? Do they tend to be happier? What do we know when we look at the data? Because it seems kind of hard to disentangle if I’m able to continue working, I’m probably healthier. Can you talk about what the data say?

Hannon: Yeah, there’s some great statistics out there. But one that you’ve probably come across is Becca Levy from Yale did that study that showed people who have purpose—and you can find your purpose in your work—tend to live like seven years longer than those who don’t have that reason to get up in the morning for a purpose. And we can tie that to work in a way that adds to that. But I do think that there’s a sense of staying—use it or lose it, in terms of your mental acuity. And the idea of having a network and something to keep you accountable really does keep people healthier, eating with an eye to nutrition, and having more physical opportunities to get out and do things. So, we have lots of good reasons to keep going. And just the sheer, I think, the financial security of continuing to earn longer really takes away some of the angst that we may feel or the anxiety.

How to Make Working Longer a Part of Your Retirement Plan

Benz: For people who want to continue working, older adults who are hurtling toward retirement age but do think that they want work to be part of their life for longer, what steps should they take to ensure that they can do that? Because we do see that there’s a disconnect when people are asked, “Well, how long do you think that you’ll work?” They tend to say they’ll work longer than when they actually do. People often hang it up earlier. Are there any steps that someone can take to kind of get ahead of that to make sure that they can continue working as long as they want to?

Hannon: That’s a terrific question. You’re absolutely correct. People will say they’re going to work till 65 or older and they’re out by 62. And it is often a health issue, a physical health issue, or they’ve had to step away for caregiving of a family member or they’ve had a layoff, and ageism made it hard to get back into work again. These things are things they can’t necessarily control, but that one piece that I mentioned, the health crisis, if you can really pay attention as early as you can in making sure that you’re taking care of yourself. It’s not just about your work skills and so forth, but it’s really being physically healthy. I think it’s a huge part of being able to continue to work longer. But there are more things, and none of this happens overnight.

I always tell people when they’re like 60, start thinking about what you want to be doing at 62, 63, 65. It’s a three-year process often to make shifts over doing the kind of work that maybe you really want to do at this stage in your life. So, whether it’s a career change—and I call it redeploying your skills, you’re not reinventing. You’re just shifting to a different arena that matters to you or whether job opportunities or whether you want to start a business. I mean, entrepreneurship at this age is huge, but you need to start laying these pieces down well before you hit that retirement point. So, I think the best step is no rash moves in terms of making a quick shift or expecting you can do it overnight. Start early to plan. Do your research. What sorts of things might you want to do that really would turn you on? That would bring joy to your life, as I mentioned earlier, that maybe you haven’t been able to do.

So, do that research. Talk to people. Get out and network. What are people doing at these ages or even at younger ages of things that you would like to do? What’s that job like? Try to identify—and of course, the usual one, add some skills to make sure that you do fit into the workplace and whatever it is you want to do so that you can actually be qualified to do the kind of work you do. And I can’t sort of emphasize more the opportunities to work with younger people, too. So, within your current workplace, if you can find ways to find teamwork where you’re working with younger people. It keeps you sharper about what’s going on in your industry and also your talents. And if you want to stay right where you are and phase into retirement, this is a time to start that conversation, and it’s tricky, right? But see what’s happening in your company because more employers are open to this idea, particularly with fewer younger workers coming up, sheer demographics, they’re thinking about older workers in a different way, the experienced worker. So, see what’s going on in your current job, and what programs they might have because while many aren’t doing formal phase retirement, they are starting to offer this to their employees and also workplace training programs that used to only go to younger workers. It’s worth doing some sleuthing.

Dealing With Age Discrimination in the Workplace

Benz: Kerry, you referenced a lot of different topics in that response. It was terrific. But I wanted to home in on age discrimination because we know that it’s a thing in our culture, and it may be one of the reasons why there is that disconnect where people want to keep working but they cannot. Can you talk about steps that people can take to ensure that they aren’t victims of age discrimination or at least to try to ward against age discrimination?

Hannon: It is so pervasive, and it’s alive and well in our workplace. I do think we are seeing changes, especially as more people stay on the job longer. There are five generations in the workplace now or something like that. We are seeing these intergenerational teams. Employers are recognizing that these teams are more productive. Performance is often better when you pair younger and older workers. So, it’s getting yourself in the eye where you’re recognized for that, and it may mean aligning with somebody younger, which keeps you both sort of highlighted in a management’s eye point. But ageism is something that we often bring on ourselves. So, we have to be pretty careful of the language we use to describe ourselves. Or it’s not just saying, “Back in the day we did this.” But sometimes we identify as old, especially when we’re working with somebody younger. So, watch your own language.

Look for those workplace opportunities for training and raise your hand to say you want to be it. It’s important to do that. But I’m pursuing one of my favorite things, I have Kerry’s Fitness Program. And one of the things about fighting ageism—and this is physical fitness, financial fitness, and spiritual fitness—but the key here for ageism is physical fitness. And I’m not body-shaming anyone. All I’m saying is if you eat with an eye on nutrition, you do some sort of workout, whether it’s swimming, walking, or running; it’s not heavy weightlifting or running fast miles. This is just when you are physically fit, you give off this positivity and this energy. And trust me, people don’t know what it is, but they want to be on your team. They want to work with you, whether it’s your own business or whether you’re an employee of a company. There’s something really magical about the energy and enthusiasm that comes from physical fitness. When I give speeches or whatever, I’ll have women come up to me and ask if they should get Botox or dye their hair. And I’m like, what the heck? If it makes you feel more confident, by all means. But the most important thing is to get yourself a really good fitness program so that you feel better about yourself.

How You Can Address Your Needs in Retirement

Benz: Definitely. I wanted to ask and address people who might be listening and are thinking, “You know, I get the financial aspect of this, but I really do not love my job.” Or maybe I have a miserable commute or whatever the case might be. Can you address sort of the disillusioned worker who really is looking toward the finish line? Should they hang it up entirely or should they consider some alternative work to replace some of those social connections and other benefits that they were getting from work?

Hannon: I get so excited about work just because I guess I happen to love what I do. So, I feel like everyone loves their job, but they actually don’t. And so, the point is I think in terms of looking at a life, you need to stand up and kind of take a helicopter look at what you do. I call it an inner MRI. What are you really good at? What do you love to do? And often we have to ask people around us because we take all these things for granted. A career coach can often help you kind of take an unbiased look at what you have, and there are ways that you might be able to tweak the work you do where you currently are, so it is more palatable to you. Maybe it is finding ways to accommodate a schedule so that you can have more personal time to do things. And that kind of fits into the phased-retirement bit. But there’s more to it.

If there are other fields that you could segue or transition your skill set to, this is a time to start thinking about that. And I have to say, coming out of the pandemic, the absolute explosion of virtual work opportunities has changed the workplace for workers over 50 and over 60 in a way that we couldn’t have imagined. I mean, it used to be wonderful that you could work remotely, but you had to beg your boss to let you do that. And in today’s world, that genie, you know, it is out of its bottle, and employers know that they can hire remote workers. So, you don’t have to deal with that. And I think it’s great for fighting ageism, too, because you don’t have that long commute. It’s subliminal, but when you’re standing side by side with a much younger coworker, that ageism thing comes up a little bit more frequently than when you’re being judged on your performance and your productivity and not your book cover. So, I think that is something really important, the growth and the surge in remote work opportunities, as well as a second big trend coming out of the pandemic: contract jobs. I mean, you can find work. It doesn’t have to be in your hometown. You can find work as a bookkeeper, as a graphic designer, as a social-media expert, and you helicopter in for project-based work that if you’re set up OK and you don’t need the benefits of healthcare; if you’re under 65, that may matter quite a bit to you, but if not, this gives you an opportunity to keep on working, stay involved, and have a network, but not have to sweat it out doing work that is drudgery for you.

Benz: Well, Kerry, you have given so much great advice today. Thank you so much for being here.

Hannon: Thank you. Enjoyed it.

Key Takeaways

Benz: Here are some of the key takeaways for me from this conversation.

First, Kerry hit on the importance of having a sense of purpose throughout our lives. That sense of purpose might come from paid work extending your career, or it might come from volunteer activities that give you a sense that you’re making a difference.

Next, working longer can bring financial and nonfinancial benefits but staying put in a job you don’t like probably isn’t worth it. I liked Kerry’s idea about sitting down with a career coach to brainstorm leveraging your skills into a position that’s more palatable.

Finally, Kerry also made the very reassuring point that working longer doesn’t have to mean full-time in-office with a long commute. Depending on the type of work you do, you may be able to pursue work that allows you to be remote and/or work on a contract basis. That can give you a lot of flexibility to balance the other aspects of your life.

My book, How to Retire, goes even deeper into the role of work later in life with experts such as Michael Finke and Fritz Gilbert.

Thanks so much for being here. I’m Christine Benz for Morningstar.

Watch more from How to Retire with Christine Benz.