In the same way that flexibility has come to the workplace — where, when and how we work — so, too, has arrived the age of the tailor-made retirement. Phased retirements, bridge jobs, “un-retirement” and second and third acts have caught on. Workers are demanding it, and firms have good cause to accommodate the idea that work does not one day simply stop.

Emergency Funds, Retirement
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Retirement

“One of the reasons is that our life-spans are expanding and people are healthier longer, and so there were a lot of wasted resources with people retiring on an old industrial age model,” says Stewart Friedman, a practice professor of management at Wharton and director of Wharton’s Work/Life Integration Project. “There is also, because of the economic pressures, the fact that workers have to extend their working lives to pay for their longer lives. It’s inevitable — because of the changes in medicine and lifestyle, it’s a lot less punishing for me to be doing what I am doing than it was for my grandfather.”

Friedman suggests that the transformation of labor markets is increasingly going to be helpful for people who want to slow down, but still want to be active. “It’s not all or none anymore,” he notes. “We are going to be seeing more and more people who reach retirement age doing the kinds of things that enable them to continue on a part-time basis, to still be active in ways that allow them to use their talents.”

Because people are delaying retirement both for economic reasons and by choice, “the reality is the 30-year career span doesn’t make sense anymore,” says Marci Alboher, vice president of marketing and communications for Encore.org, an organization that works with workers ages 50-plus on what to do beyond the crux of their careers. “It’s more like 50 years. So if that’s the case, what does the last 20 years of that look like?”

[drizzle]The Haves and Have Nots of Retirement

“There are all sorts of interesting formats for retirement – more interesting than the stereotypical thing. My mom worked every day until she didn’t. That now is actually the minority story,” says Joseph Quinn, an economics professor at Boston College. Quinn and Kevin E. Cahill, a research economist with the Sloan Center on Aging and Work at Boston College, have studied patterns in workforce withdrawal. They found that 60% of workers leaving their main careers end up doing something else — a bridge job, a part-time job or a full-time job that might not fit the definition of a career job. “We actually find a fair number of people, 15%, who are out of the labor force for about four years later come back into the labor market,” says Quinn. “We call these un-retirements. People come back either because of finances or because they are bored to death.”

Looking at the question of what workers did after the end of their main careers, Quinn and Cahill found that the biggest group of workers who chose to retire outright were generally middle class — the “union worker, someone who was a member of the UAW, who has pretty good Social Security and union pension benefits, whose work was not that inspiring and who may move to Florida and really just isn’t interested in working anymore.”

“Because of the changes in medicine and lifestyle, it’s a lot less punishing for me to be doing what I am doing than it was for my grandfather.”–Stewart Friedman

And who are those who returned to work after the end of their main careers? “It makes for a fascinating graph — it’s basically u-shaped,” says Quinn. “At the low end [of the economic scale], people are more likely to take a job on the way out, people in the middle say, ‘I’m out of here,’ and people at the upper end are more like the people at the lower end.” But the reasons people at the upper and lower ends of the income scale keep working is very different. “If you ask people at the low end, they say ‘I need the money,’ they are working because they have to. At the upper end, they say ‘I’d like to make a contribution.’ They are working because they want to.”

While there are benefits in physical and mental health to working longer, these benefits are not distributed evenly to workers across the board. People who took part-time work after retirement were physically healthier, according to University of Maryland and California State University at San Bernardino researchers analyzing data from 12,189 U.S. workers between the ages of 51 and 61 interviewed every two years between 1992 and 1998. Mental health benefits, however, were enjoyed only by workers who continued in new jobs related to their previous careers, according to the study, published in 2009 in the Journal of Occupational Health Psychology. This may be from the stress of adapting to new work, or because retirees with financial problems are more likely to seek work after retirement, according to co-author Mo Wang.

Other disparities are having an impact on how people retire — and who. Olivia S. Mitchell, Wharton business economics and public policy professor and executive director of Wharton’s Pension Research Council, has found that women are delaying retirement because they have no choice. Comparing data from 1992 and the present day, Mitchell and co-author Annamaria Lusardi, chair of economics and accountancy at the George Washington University School of Business, have determined that factors like education, more marital disruption and fewer children than prior cohorts are delaying retirement for women. “But household finances also play a key role, in that older women today have more debt than previously and are more financially fragile than in the past,” they write in a working paper for the National Bureau of Economic Research, “Older Women’s Labor Market Attachment, Retirement Planning, and Household Debt.” Those women who reported excessive debt and were financially fragile were the least financially literate, had more dependent children, and experienced income shocks, they found.

Says Mitchell: “We are revisiting what we mean by retirement, and it’s very clear that the definition of what people do even into their 70s is changing a lot, and people are continuing to work full time, continuing to work part time, and that has increased more for women than for men. There has been a big change in family structure, increases in divorce have left women more on their own, they may not be dependent on their husband’s pension or Social Security benefits, and of course women are living longer than men. So they have more need to think ahead to retirement.”

Phasing into Retirement

For those who can afford to ease out of fulltime work, the options are flourishing. Some companies are offering phased retirement plans — a way for workers to reduce the number of hours they work while phasing in retirement benefits. The U.S. government has been rolling out the idea in many of its agencies. Faced with the fact that nearly a third of its workforce will be eligible for retirement by September 2017 and the potential loss of institutional

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