What To Do If You Can't Retire

Last Updated Apr 27, 2011 10:54 AM EDT

Are you one of the many baby boomers who doesn't think they'll have enough money to retire? The reality is that some people just won't have enough money saved to completely stop working. So what do you do?

To get some perspective, let's take a quick look back at how we came to the idea of retirement:

  • Retirement is a pretty modern idea. Before we created Social Security in the 1930s, the vast majority of people never retired or thought about retiring. They simply worked until they couldn't anymore and then often went to live with family.
  • Social Security, however, introduced the idea that everyone should have some basic level of income as they age. Then after World War II, American companies started to adopt retirement plans as a part of their wage packages for employees.
  • But the dream of universal retirement proved hard to achieve. Once employers figured out how expensive retirement was, companies backed away from their pension plans. That leaves many people with just Social Security, which provides a basic income, but generally not enough to cover most people's costs of living. That means you've got to fill your retirement income gap with your savings.
If you don't have enough saved to fully retire, then your main option is to partially retire. You basically enter a phase of your life where you work less and have more leisure time, but you don't completely stop working. If you want to partially retire, the key is to figure out how to work part-time as you age. It sounds simplistic, but it's really the only solution. Working after age 65, however, presents a number of physical and mental challenges that you'll have to tackle.

As you may know, when Social Security was created in the 1930s, life expectancy was only about 62. So most people never had to face working as they got older. They never made it that long. But today, if you reach age 65, your life expectancy will take you into your mid 80s. Given the longer life expectancy, if you work past 65, you've got to work at a pace you can handle and in a job that fits the skills you've developed.

As people get older, it's harder to work as many hours and to concentrate at the same level they did when they were younger. Moreover, people develop injuries or illnesses that restrict (but don't prevent) their ability to work. The fact is that many people will find that they just can't work full time after 65, so it's not a good idea to pursue a job you can't handle. This is where part-time employment of 20 to 25 hours per week can fit. Part time employment can provide you with the extra funds needed to be comfortable and a work environment that's sustainable.

I fully recognize the economy is tough and there aren't tons of jobs out there. But that doesn't change the fact that you may need to work past 65. So you have to begin thinking about how to market yourself to employers on a part-time basis.

As people age and have more working years under their belts, they tend to developed many "soft" skills that employers value. Remember that the US is essentially a service based economy, and providing excellent service is a valuable skill. Older workers tend to be very responsible, have learned how to communicate with customers and co-workers and can be trusted. There are many part time office and administrative jobs that require just these types of skills. So when looking for work, stress those skills.

  • And make sure you continue to develop and maintain all of your office based communication skills, like knowing (and mastering) how to use Outlook, Word, PowerPoint, Excel, a smart phone, Facebook and Twitter. If you combine your soft skills with your electronic skills, you may be a pretty attractive candidate.
  • Employers are also coming to realize that they need to accommodate older workers because the demographics dictate that there will simply be more older Americans working than ever before. Some employers are trying to create more flexible schedules and find opportunities to tap into the experience and knowledge older workers have, but not put them in a position to have to work at a pace that isn't realistic. Now this isn't happening overnight, but it's happening. And looking for employers that are trying to accommodate older workers should be on your radar screen.
If you have any ability to function as an independent contractor after age 65 (maybe you were a lawyer, accountant or consultant), you may find more opportunities. Why? Because independent contractors provide employers with more flexibility.
The US employment laws make some employers reluctant to hire older workers because of the fear of age discrimination claims. Every employer knows that if someone they hire isn't working out, they need the flexibility to let them go. But with age discrimination laws, employers don't feel they have that flexibility, so that causes some to just avoid hiring older workers. It's a case of the law basically protecting people right out of their jobs. But if you're a legitimate independent contractor, the employer doesn't need to worry about being sued if things don't work out. That means you're a more attractive candidate for the work they need done.

Bottom line. Part-time work may be they key to a more secure retirement.

Learn More: Want to learn about a simple way to manage your personal finances and prepare for retirement, investigate my new book Your Money Ratios: 8 Simple Tools For Financial Security, available in bookstores and at amazon.com The Wall Street Journal called the book "one of the best finance books to cross our desks this year." WSJ 12/19/09.