Is 'Never' Your Planned Retirement Date?

NEW YORK (MainStreet) — One in eight Americans never plan to retire, while another one in four plan to work as long as possible, according to a recent study from the Federal Reserve. All told, 38% of non-retired people either don’t plan to retire or will work as long as they can, and 45% expect to work in some fashion after retirement. These findings indicate a blunt truth that's hard to swallow: nearly half of non-retired don’t see retirement as a traditional end to working life.

The Fed’s 2014 Survey of Household Economics and Decisionmaking, which surveyed 5,800 people in the fall of 2014, also showed that 39% of pre-retirement people have given little or no thought to financial planning for retirement, while 31% have no retirement savings or pension. While those findings suggest people’s ideas for funding retirement may be unrealistic, so do the results about people’s plans to work essentially forever.

But it’s really not unfeasible or even unusual to work post-retirement, according to Leon LaBrecque, a certified financial planner in Troy, Mich. who sees many of his retiree clients continue to work. Some of these post-retirement workers labor because they love their jobs, he says. Others just want to stay busy.

“To them and me, retirement is state of mind, and not a state of employment,” LaBrecque says.

Census Bureau figures support his view. In 2005, the Census found about 15% of people past retirement age were still in the labor force in some capacity. A 2008 Census report suggested people worked beyond retirement-age for several reasons, including the high cost of health insurance, declining employer-sponsored retiree health benefits, longer life spans, fewer defined-benefit pension plans and a desire to stay active and boost their emotional well-being and physical health. Work also promotes social integration and social support, the Census report noted.


Curt Weil, a certified financial planner in Palo Alto, Calif., says lack of money isn’t usually the reason his clients work past retirement. “That’s almost never the deciding factor in my experience,” Weil says. “ For most people, the factor is that their work is their identity. They can’t conceive of not doing what they’re doing.”

“Another reason that I’ve found is a number of people who didn’t prepare psychologically for retirement,” Weil adds. Some of the psychologically unprepared find themselves without sufficient hobbies or interests to fill the time once occupied by work, he said. Others experience discomfort and even conflict when they find themselves suddenly home all day with spouses. Post-career depression -- and the daunting prospect of filling empty days -- can drive retirees to work more. 

LaBrecque predicts we’ll see more post-retirement workers. One reason is that life spans continue to increase, so we have more years of relative good health after traditional retirement age. Another factor, he says, will be an increasing number of post-retirement age people who must work because they haven’t been able to save for retirement due to growing income inequality.

“The lower end is having a harder time catching up while the upper end is getting the lion’s share of the gain,” said LaBrecque, who works with many working-class clients in addition to the well-heeled types who generally patronize fee-only planners.

While it may not seem like good news to find out that many of us will work past the traditional retirement age, there is a silver lining in this. That is, while work may seem like a burden that interferes with enjoying life, it can also be a pleasure and a way to increase enjoyment.

This is especially true for people who have planned successfully for the financial side of retirement, according to Weil. “At some point, they look at the numbers and say, 'I don’t have to go to work tomorrow,'” he says. “That transforms work into a form of joy.”

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