By Elizabeth Guttenberg, LCSW- Senior Care Advisor at Care.com
A family friend of mine recently retired at age 65 after a long career in software engineering. Like many others, he long planned for his retirement, and had great expectations about the direction it would take. Daily mall walks, a move to a swanky retirement community in Florida, and a bucket-list trip to Antarctica were all in the works.
But as the old Yiddish adage goes, “Man plans, God laughs.” Only one year into retirement, my friend sustained a hip injury, which incurred exorbitant medical bills and put a serious dent in his retirement savings. So he did what a lot of seniors are now opting to do: he applied skills from his former field to succeed in a new one. Today, he is passing along his valuable expertise to a younger generation, through tutoring high school students in math and computer science.
And as my friend’s situation proves—when it comes to retirement savings, nothing is set in stone. The latest estimates show that the average 65-year-old retiree will need about $100k to cover the costs of medical premiums and healthcare expenses alone. In addition, rental costs have been going through the roof, and long-term care costs aren’t much better, averaging $45k per year for an assisted living community and $80k annually for a semi-private room in a nursing home.
All this makes it hard to plan effectively for the future—given that the average retiree brings in less than $3k in monthly income and an unexpected injury, illness, or spike in the housing market can quickly deplete savings. And unfortunately, many aging individuals don’t have much in savings to begin with. According to a recent AARP article, about 75% of Americans have less than $30,000 saved at traditional retirement age; in the aggregate, this falls about $6.6 trillion short of the savings required to cover basic expenses for this age group.
The New Normal
Finances, then, are a big reason why many seniors—like my friend—are deciding to continue working past retirement. In addition to supplemental income, continuing to work can provide priceless emotional and psychological benefits, including social stimulation, sense of purpose and intellectual growth. Although my friend initially pursued tutoring opportunities as a means to an end, he has discovered that helping students prepare for college provides him with a newfound zest and excitement that he previously lacked.
So, it is no mystery why more than 60% of workers continue to hold full-time jobs past the traditional retirement age of 65 (up from around 45% in 1995). Working after retirement is quickly becoming the new normal. But what about those people—again, like my friend—who decide they want to continue working…but not necessarily in the same position they were in pre-retirement? After all, retirement in theory provides a unique opportunity to try new things, like a new career. But is that really realistic?
The short answer is yes! Despite the conventional wisdom that all jobs for seniors are on the lower end of the totem-poll, in terms of pay and skill. A recent Wall Street Journal article dispels this myth and even suggests that seniors are in a better position than some younger people to pursue new career options due to their vast experience and expertise.
So, where should you begin? For starters, make sure you are up to date on the latest developments in the working world. Many successful encore careers involve capitalizing on our constantly evolving gig economy—which refers freelance-style earning opportunities that allow people to take advantage of flexible work hours. Although we may associate many of these opportunities with millennials, web-based platforms such as AirBnb and TaskRabbit, for example, are making it quicker and easier for seniors to earn extra income.
Seniors are also primed for gigs that require a higher level of expertise or experience. In addition to the friend I mentioned earlier—my handyman was also able to capitalize on his 30+ years of experience as a facilities manager for a large warehouse. He now puts his know-how about maintaining a physical plant to use by helping people repair their toilets, clean their range hoods, hang pictures, and re-caulk their bathrooms. Demand for his “no job too small” service is so great that he schedules out weeks in advance.
I also urge seniors to consider caregiving—whether for a child, a fellow senior or a pet—as both a great way to give back and a wonderful career option. Older adults can be great candidates for professional caregiving. They may have raised children, cared for aging parents and gained wisdom and compassion from their own life experience. And many seniors are using Care.com to find part-time, flexible and meaningful caregiving work right in their own neighborhoods.
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