Working in retirement: Is it for you?

Encore careers

Key Points

  • For many, retirement is becoming a time to explore a new career on their own terms
  • Almost a quarter of new businesses are started by individuals between 55-64 years old1
  • Corporate and government employers are adopting phased retirement programs in response to marketplace trends

Working past traditional retirement age is so common nowadays that “encore career” has become part of our national vocabulary. Chris Farrell, Senior Economics Contributor for American Public Media’s Marketplace, explores this phenomenon in his book Unretirement — a guide to the oncoming societal shift brought about by the aging of America’s workforce.

We talked to Farrell to find out what’s behind this movement — and what it could mean for you.

Q: Aside from economics, what’s driving Americans back to work in what used to be the traditional retirement years?

A: For one thing, the baby boom generation is healthier and better educated than previous generations. They also value the social aspect of work. For many, the skills, knowledge, and experience they’ve gained over time are a big part of who they are. More people are learning they don’t want to walk away from that identity completely.

Q: You mention in your book that more seniors are starting businesses — why is that so?

A: In recent years, almost a quarter of all new businesses have been formed by people between the ages of 55 and 64. It’s so much easier to do today because of the internet and working out of a home office or using a work-sharing space. And you don’t necessarily have to spend a whole lot of money to set up a new business.

Q: You also point out that one-fifth of the U.S. population will be over 65 in 2030, what’s the significance of that?

A: You can’t attend a human resources conference without the aging workforce emerging as a discussion topic. Last year, the federal government finalized the rules on its own phased retirement program. Under this program, government employees commit to work 20 hours a week, and they can partially draw on their pension. This is going to be a closely watched program by corporate America because if it succeeds — and I think it will — it will provide a template.

Q: Are there employment options geared specifically toward older professionals?

A: Many companies recognize that retirees have a lot of knowledge and skills and insight into how the organization works. In the tech sector, companies are establishing some interesting phased retirement programs. Some companies, like YourEncore, have set up networks of experienced retirees to cater to employment options within a specific field.

Q: How can people become more engaged in preparing for a possible unretirement?

A: My advice is to start thinking about “What is it I want to do next?” and factor that into your retirement planning. The reality — particularly for higher-income workers — is that there’s not a whole lot of time for introspection while they are still in their job. In a sense, retirement is becoming a sabbatical, a period of time to decompress and think about who we are, what we are and what skills we want to tap into next.

Q: What does unretirement mean for Gen Xers and millennials?

A: By the time members of the younger generations are in their late 50s or early 60s, I think we’ll have a very different expectation about the last third of life. If you work longer, you may be able to have the same standard of living in retirement as someone who may have earned a higher income, but burned out and retired at age 60. I think the unretirement movement — and the whole encore career discussion — is incredibly optimistic at its core. 

The financial implications of working for yourself

Watch our short video to uncover key questions to ask if you’re considering starting your own business.

Chris Farrell is Senior Economics Contributor at Marketplace, a nationally syndicated personal finance show produced by American Public Media. In his book, Unretirement, he shows how the experience and wisdom of older workers can benefit our society as a whole.