For many, "retirement" means getting a job

The "I'm outta here" retirement, where you triumphantly wave goodbye to your full-time career and never again work for money, is more the exception than the rule these days. That's one conclusion from a report on retirement patterns that offers evidence American workers are redefining the concept. For many people, retirement is more of a process that unfolds over many years rather than a one-time event.

Researchers from Boston College and the U.S. Bureau of Labor Statistics studied the patterns of how older workers left the workplace from 1992 to 2010. They examined data on about 20,000 Americans age 50 and over from the respected Health and Retirement Survey (HRS) conducted by the University of Michigan. They found four distinct paths that older workers use to exit from a full-time career job:

  • Traditional retirement, which is a one-time, permanent exit from the workforce
  • Bridge job, where an older worker leaves their full-time job and immediately starts either a part- or full-time job with a different employer
  • Phased retirement, where the worker reduces their workload at their current employer
  • "Unretirement," where a worker leaves employment for a period of two or more years but then returns to work

Here are a few key findings from the study:

  • 57 percent of career men and 54 percent of career women left their full-time career job for a bridge job.
  • 13 percent of both men and women "unretired" during the period studied.
  • Only 11 to 14 percent of men and 6 to 9 percent of women were able to phase their retirement at their current employer, depending on whether they were early boomers or from previous generations. Most workers needed to leave their current employer in order to find a bridge to retirement.
  • All told, more than three-fourths of older workers left their full-time career and had some form of subsequent employment. Fewer than one-fourth of workers experienced traditional retirement.

There are differences in retirement patterns between generations -- the early boomers studied were more likely than their predecessors to utilize bridge employment, and their bridge jobs are more likely to be full-time instead of part-time. Early boomers were also more likely to leave their full-time careers involuntarily due to a layoff, health reasons or issues involving family care.

A number of factors influence the retirement decision:

  • Younger workers leaving full-time careers were more likely to seek bridge employment than older workers.
  • Workers reporting good health were more likely to find employment than those reporting poor health.
  • Men who didn't have portable health insurance were more likely to seek bridge employment, but the opposite was true for women.
  • Retirees who received a monthly income from the increasingly rare pension plan were less likely to seek employment.
  • Higher-income workers were more likely to seek bridge employment for lifestyle reasons, while lower income workers needed the money and benefits.

All of these trends make sense when you consider recent trends, such as the decline of traditional pension and retiree health plans, the volatility of the stock market, low interest rates on investment vehicles and the uncertainties in the economy. Recent retirees are faced with "do-it-yourself" retirement planning, and earning income and benefits from employment provides some security in an uncertain world.

What does this mean to you? Simply put, retirement means different things to different people. Some people hate their job, others tolerate their work and the lucky few love their careers. Some people value leisure, travel and hobbies more than others. Some people are laid off or need to leave employment for health reasons, while others have more freedom to decide when to exit their careers.

One smart takeaway: Don't plan your retirement based on what your family and friends do. You'll want to determine the life you want and the amount of income you need to support that life. Find out how much retirement income you'll receive from Social Security and your retirement savings. If working is part of your retirement plan, you'll need some planning to make it work -- so maintain your health and keep your skills and contacts current.

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    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.