What will your work in retirement look like?

Many people say they want to work in their retirement years, but they don't give much thought to what that work could look like. As a result, saying you plan to work in retirement might be no more than a hope.

If you're in that group, it's a good idea to spend some time thinking about exactly what you'll do in retirement so it doesn't feel like more of the same old grind.

The recent report, "Work in Retirement: Myths and Motivations," prepared by Merrill Lynch and Age Wave, offers valuable information that might help you decide how you can design a work-life in retirement that meshes with your goals and circumstances.

Before you jump into a post-retirement job, it's important to understand your motivations for working. You can gain insights by comparing the motivations and circumstances of retirees vs. pre-retirees in the Merrill Lynch/Age Wave report. For retirees, the top five reasons for working are:

  • Staying mentally active (62 percent)
  • Staying physically active (46 percent)
  • Maintaining social connections (42 percent)
  • Keeping a sense of self-worth (36 percent)
  • Needing the money (32 percent)

The answers are somewhat different for pre-retirees, who report these reasons:

  • Needing the money (51 percent)
  • Staying mentally active (51 percent)
  • Staying physically active (46 percent)
  • Obtaining health insurance (34 percent)
  • Maintaining social connections (32 percent)

It's interesting to note that pre-retirees are much more likely to cite the need to work compared to retirees, along with needing health insurance.

Flexibility and control are important attributes of retirement work. Retirees are far more likely than pre-retirees to report working part time (83 percent vs. 17 percent). Retirees are also much more likely to be self-employed (32 percent vs. 11 percent).

These findings are consistent with a 2013 report on demographic shifts in the workforce, prepared by the Stanford Center on Longevity, that shows workers age 50 and over have a lot of interest in flextime, phased retirement, compressed work schedules, telecommuting and job-sharing. This same report shows that rates of self-employment and entrepreneurship are significantly higher at older ages (age 55 and over) compared to younger ages.

How does working in retirement compare to working before retirement? The Merrill Lynch/Age Wave report shows striking differences in the answers reported by retirees and pre-retirees. Compared to work before retiring, work in retirement is more:

  • Flexible: 80 percent of retirees vs. 3 percent of pre-retirees
  • Fun: 53 percent of retirees vs. 5 percent of pre-retirees
  • Fulfilling: 36 percent of retirees vs. 11 percent of pre-retirees

But it's also less:

  • Boring: 6 percent of retirees vs. 58 percent of pre-retirees
  • Stressful: 3 percent of retirees vs. 76 percent of pre-retirees

In addition to the obvious financial reasons for working in retirement, what are the benefits? Retirees who work compared to retirees who don't work are more likely to feel:

  • Proud (67 percent vs. 57 percent)
  • Connected to others (62 percent vs. 45 percent)
  • Stimulated (55 percent vs. 38 percent)

As a result of these factors, 80 percent of working retirees reported that they're doing so because they want to, while only 20 percent reported working because they need to.

What do all these numbers mean to you? You might enjoy the work you'll do in retirement more if you look for work that's flexible, part time, fun and fulfilling. Also seek out work that keeps you mentally, physically and socially active. And do work that you enjoy and can be proud of.

In addition, be clear about how much money you really need to support the life you want and how you can meet these needs with your various sources of retirement income, including Social Security, drawing from savings and a pension if you have one. You're much more likely to enjoy your retirement work if you're working because you want to and not because you need the money.

If you're in your mid-50s, now's the time to start planning your retirement finances, including what work you'll do and how much money you'll need. If you wait until your mid-60s, your choices may be limited. You might just get the life that shows up, rather than the life you want.

  • Steve Vernon On Twitter»

    View all articles by Steve Vernon on CBS MoneyWatch»
    Steve Vernon helped large employers design and manage their retirement programs for more than 35 years as a consulting actuary. Now he's a research scholar for the Stanford Center on Longevity, where he helps collect, direct and disseminate research that will improve the financial security of seniors. He's also president of Rest-of-Life Communications, delivers retirement planning workshops and authored Money for Life: Turn Your IRA and 401(k) Into a Lifetime Retirement Paycheck and Recession-Proof Your Retirement Years.

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