When Larry Morin retired in February 2010 from UPS after 32 years as a driver and-later-an industrial engineer, he settled into retirement for about six months before deciding it was time to get back to work. Morin now works 25 to 30 hours a week for a local pharmacy delivering prescriptions to Manchester-area residents who can't get to the store-and he couldn't be happier.
I wake up happy to go to work every day, Morin says. It's different every day. I'm meeting different people every day, getting to see who they are and what they are about. For the most part, they are upbeat, and a lot of the time I am the only person they see all day. Morin, 58, plans to work until his wife retires, maybe even until age 64. His pension combined with income from his new job is equal to his take home pay from UPS.
Len Rishofski retired from Sears about 10 years ago with a healthy pension. At that time, I was [in my 50s], I had perfect health and I looked and I said, What am I going to do for the next 30 years?' Because actuarially I'm probably going to live until I'm 75, maybe 80. I thought, Can this amount of money allow me to live in the lifestyle to which I've become accustomed?' And the answer to that question was no, Rishofski says.
He bought employment-search company Snowden Associates, based in Portsmouth, and is now about to officially launch a second business, Executemp. I won't tell you my age, but I would never stop working, he says. I enjoy what I do and I want to be able to do it as long as I physically can.
It used to be the minute the clock struck midnight on 65, a good life meant building birdhouses, lolling on golf greens and ticking items off the bucket list. Not anymore. True to form, boomers like Morin and Rishofski-76 million of whom are heading toward retirement this year alone-are forgoing a traditional retirement and staying in the workforce, sometimes as much as 20 years longer than previous generations.
Whether the choice is out of financial need or just the need to remain relevant, boomers are entering new careers, sitting on boards, and negotiating for reduced-time or part-time work as consultants and advisors. This is having a profound effect on not only the semi-retiree, but also on the workplace from which he or she is transitioning. In 2010, about 69 percent of people in NH aged 55 to 64 and 21.5 percent of people 65 and older were employed, according to the U.S. Bureau of Labor Statistics. Further, only 13 percent of those 50 and older in NH plan to retire at 65, according to the 2011 AARP survey, Voices of 50+ New Hampshire: Dreams and Challenges.
A Shrunken Nest Egg
While some people seek a combination of personal satisfaction and additional income, many boomers are working past retirement age simply because they need money, says Michael Bacon, senior vice president of Management Recruiters Inc. in Bedford.
Some are upside down on homes that lost value in the housing crash, says Bacon, and need to work to stay in their homes. Others are trying to recover from the hit their retirement plans took at the start of the recession, says David Woolpert, financial planning principal with Altus Investment Group in Concord. We got hit four years ago with something that is equivalent to the tsunami on the coast of Japan, Woolpert says. Almost no one saw it coming and therefore it was something hardly anyone prepared for. It would have been unwise to prepare for a one-out-of-a-hundred year situation by putting all their money in CDs, which was about the only way that they could have protected against it.
According to the AARP's What's Next survey, 61 percent of boomers cite 401(k)s and other retirement savings as their retirement income source with 55 percent relying on other savings and investments.
Woolpert explains that while CDs are growing at the rate of inflation, if that, people looking to retire who might live another 20 or 30 years typically invest in the stock market. And that's what almost everyone did with their 401(k)s before the recession. So when that drop occurred, that was a 62 percent drop in eighteen months, he says. It hurt anyone who had investments primarily in stocks and delayed their ability to retire. Instead of growing at six or seven or eight percent a year as they had hoped, it dropped maybe fifty percent. Even if they had the minority of their money in stocks, they might have lost a third of their investments. By doing part-time consulting, advising or contract jobs, people are saving on the taxes that would be paid to take money out of retirement plans and Social Security in addition to bringing in new income.
A Value Proposition
Rishofski says boomers are also looking for more than a job, they want to contribute.
They are looking for things where they can truly contribute to a company. Where the years of their knowledge and expertise can be valuable and when they leave work to go home they feel like they contributed to the growth of the company, he says.
Employers, however, are being selective. Rishofski says he works with some employers that say he can't bring a resume to them if the person is not an exact match. And since there are so many applicants and so few jobs, he says, employers can be hyper selective.
Bacon sees employers using contract employees, who don't get benefits, to keep staffing costs low. There are companies now they're introducing a new product or they have something coming down the line, and might need some people for a few months, but not necessarily full time, Bacon says. For the semi-retiree, this is perfect. You're not committed long term and you pick up a pretty good buck while keeping active, he says.
The City of Keene has availed itself of several retired city employees, says Vicki Flanders, a human resources assistant for Keene. At the Keene Police Department, they help with fingerprinting, accreditation, and background checks for prospective officers. The city engineer, who retired almost four years ago, has continued working part-time for the city ever since. The city also has former full-timers working at the recycling center as well as in the parks and cemeteries during the summer.
We had someone retire in May and fill in during an emergency in September, Flanders says. I, myself, think working at the library would be an excellent part-time career for myself down the road. The city received enough inquiries about working part-time after retirement that the city's human resources department has developed employee brochures regarding planning for retirement and making the transition to part-time.
Managing Egos
While it can be valuable for an employer to keep a semi-retiree on staff to retain years of experience and institutional knowledge, it can also deter some up-and-comers in a company who may not see a way to rise up if seasoned executives are not leaving.
To handle this, many companies are doing succession planning, says James P. Reidy, a labor attorney with Sheehan, Phinney, Bass + Green. This planning allows an employee nearing retirement to stay on as long as he or she wants to work and as long as it makes sense for the company or organization, while at the same time moving others in the company up.
It's a delicate balance because you may have a situation where you don't want to offend either worker. You want to keep the younger worker motivated and engaged because you don't want to lose him or her to a competitor, Reidy says. Through compensation, through title, through responsibility is how you sort of keep the person moving along and engaged. And the older person who otherwise would have retired, you handle that by being creative about their compensation as well and about their engagement and their role. Reidy says it's important for employers to recognize that while they may want the person nearing retirement to recruit, train and transition his or her successor, that person is trying to come to grips with having a diminished role in the firm and may need to focus on his or her own transition.
People are not always comfortable with [training a successor], but as long as they are secure in what they're doing, they feel better about that mentoring, Reidy says.
The Retired Mind
Being semi-retired comes with not only financial and logistical challenges, but emotional ones as well. It takes a lot of self-awareness to navigate the process, says Ellen Yenawine of Yenawine Lifeworks, a career management firm in New London.
They want to retool instead of retire, says Yenawine. To help ensure a smoother transition, it's important to choose something that requires skills they enjoy in an environment they enjoy, she says.
Those who have been totally consumed by their careers have a lot more difficulty with semi- or complete-retirement because they haven't cultivated the interests that would make them pretty comfortable with spaces in time without complete engagement to work, Yenawine says. So of course the encouragement is to identify interests early, find a way to build them into life, and I think people are doing that more today than they are used to.
Current Issue - May 2024