The concept, and likelihood, of "retirement" is continuing to change according to a number of recent studies and statistics. The wealthy are continuing to work well past 65 for both financial reasons and personal fulfillment, while involuntary unemployment is at a record high for those over 55. What exactly is going on here, and has the traditional definition of retirement disappeared forever?
A Barclay's Wealth study found that 54 percent of millionaires want to keep working in retirement. "Previous generations looked to create their wealth early on in life with a view to enjoying it when they retired," says Matt Brady, a Barclays wealth advisor. Now, people want to "continue to challenge themselves well beyond the traditional retirement age." But it's not always a choice. Other indicators suggest that the non-wealthy will have to keep working because they're seriously behind on retirement preparedness. Increasingly, of course, not everyone has that option. According to the Labor Department, more than 2.2 million of America's nearly 15 million unemployed are 55 or older, a record high for the demographic. "A growing number of people in their 50s and 60s who desperately want or need to work to pay for retirement... are starting to worry that they may be discarded from the work force — forever," writes Motoko Rich in The New York Times.
Why is this happening?
For entrepreneurs, "who account for the bulk of the wealthy... work is their recreation," writes Robert Frank in The Wall Street Journal, and not even the rich are free from financial worries these days. At the same time, unemployment is growing among those 55 and older because this group takes longer than any other to find work — on average, slightly over 39 weeks.
Why do over-55s take longer to find work?
In a tough job market, employers may favor younger, cheaper applicants in the hiring process. Older people, especially those who worked at a single company for many years, may have rusty interview skills or lack technical know-how. "Their skills have atrophied," says Sarah Rix, a strategic policy adviser at AARP. Technology evolves so quickly that an individual's skill set can "become increasingly less relevant to the [available] jobs...."
Is this a cause for concern?
Yes, if over-55s are no longer able to support themselves, they'll pose a policy problem. "That's what we should be worrying about," says Carl E. Van Horn, a professor of public policy at Rutgers University, these "people who have been cast adrift at a very vulnerable part of their career and their life." According to figures released earlier this month by the Census Bureau, the poverty rate for those aged 55 to 64 rose from 8.6 percent in 2007 to 9.4 percent in 2009.
What are the effects of the wealthy continuing to work voluntarily?
"The shift toward a working retirement could have several ramifications," says Christina Cheddar Berk at CNBC. Some say that successful "Nevertirees" may take opportunities away from younger workers, while others believe their entrepreneurship will help increase labor opportunities and expand the GDP.