What happened to the dream of sitting on a beach in your retirement years, sipping your favorite beverage and relaxing with a good book? That dream does not appear to fit most people’s goals — if it ever did.
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A working retirement used to be considered an oxymoron, but that is no longer the case. Almost three of every four workers nearing retirement age prefer to work in retirement, according to a new study conducted by Merrill Lynch in conjunction with AgeWave, a group specializing in issues regarding the aging population. The study Work in Retirement: Myths and Motivations collected survey results from 7,000 pre-retirees aged fifty and above with a separate survey of 1,800 working retirees. New and surprising conclusions were revealed about the structure of retirement.
The study finds that retirees may be roughly classified into four categories:
Driven Achievers – These are the classic Type A workaholics that make up 15% of the working retired. They are often successful and at the top of their fields, enjoy working, and see no reason to stop.
Caring Contributors – One-third of working retirees are focused on giving back to others. They want to put their talents to work where they can make a difference in people's lives. This work could be either volunteer or salaried work, but the money is less of a factor than the work itself.
Life Balancers – Almost one-quarter of those working beyond retirement age focus on balance. They may need the money and/or the social contact of the workplace, but have assumed a more flexible work structure that does not make work the primary focus.
Earnest Earners – Comprising 28% of working retirees, they would rather not be working as they currently are but they must, generally because they need the money. Of the four categories, this group has the most frustrations about their retirement.
Those approaching retirement are increasingly planning their retirement to avoid falling into the latter category. 37% of pre-retirees will have taken some retirement preparation steps five years before retiring, and 54% will have done so within two years.
Once retirement begins, most retirees will take a break of 2.5 years on average to relax and assess working retirement options. When they do re-enter the workplace, this “second career” lasts an average of nine years.
Second careers are based on flexibility and life balance to the extent possible. According to the study, retirement jobs are usually part-time (83%) and are also three times more likely to include self-employment. Second careers may provide an opportunity that perhaps pays less but is something that a retiree really wants to try.
After the second career phase, retirees will hit the leisure phase — the traditional concept of retirement. By this point most working retirees expect that their health will preclude them from continuing work (77%), or they will simply not find their new career enjoyable anymore (61%).
What about the myths in the study title? That refers to four myths about retirement that are shattered by these survey results: retirement equals the end of work, retirement equals decline, retirees work because they cannot afford to do otherwise, and new careers are only for the young.
For some retirees, these myths are at least partially true — but this survey shows retirement to be a much more engaging, exciting, and enjoyable period of life. We hope that you are able to follow your preference in your retirement — and if you put some planning into it beforehand, this survey suggests that you can.