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The Power of Working Longer

The dream of FIRE - financial independence and retire early - may be fading as older professionals find reasons to stay in or rejoin the workforce. For some workers, returning to the workforce can reduce the financial burden if they find their retirement savings are lacking. For others, taking on a second career offers a renewed sense of purpose or fulfillment, which in turn can increase longevity. There are numerous reasons why individuals may choose to work past retirement, including the larger societal forces at work.

For instance, with the unemployment rate at a low 3.5%, companies are incentivized to lure workers out of retirement. When the unemployment rate is low, employers have trouble finding and hiring skilled workers. A retiree who has well-development skills from their past career is an exciting commodity for employers, especially if they do not have to spend time and money training them as they would an entry-level worker. Aside from small businesses, many industry giants, such as Goldman Sachs, General Motors, and IBM, started programs for older workers looking for a re-entry internship, sometimes referred to as “returnships”.

There has been some concern reported in the media that older workers may be taking job opportunities from younger workers. However, since 2018, job vacancies have outnumbered applicants as baby boomers retire faster than millennials can replace them. A Harvard Business Review analysis states that by 2025, they expect a quarter of workers in the U.S. to be 55 or older.

There is good news on the retirement planning front--Fidelity Investments surveyed Americans in 2018 and found that they are on target to cover 80% of their income in retirement, up from 62% in 2005. Unfortunately, about half of those surveyed are at risk of not having enough to fully cover retirement expenses. The most powerful tool for Boomers whose retirement savings fall short? Fidelity recommends, “Consider working longer.”

The data shows that working longer is relatively more powerful than saving more. Delaying retirement by only three to six months equals 1% of savings on earnings for 30 years. By that metric, career length is a powerful variable in the standard of living in retirement.

Working longer or starting a second career, believe it or not, can also increase overall satisfaction and happiness. Some people find after retirement that something is missing from their life. People who find work they are passionate about and where their contribution is valued can feel rejuvenated. It gives them a reason to get out of bed in the morning and keeps them engaged.

Staying fulfilled is important now more than ever due to increasing longevity. The Harvard Business Review analysis found that life expectancy is increasing by three months every year. Average life expectancy in the U.S. is nearly 79 with estimates it may reach 100 by the end of the century. Compared to 47 at the start of the last century, there are a lot of additional people in their 60s, 70s, 80s and beyond, which means working past retirement is becoming more and more common.

In addition, working past retirement is not a phenomenon reserved for low to middle-level employees. A surprising number of top executives at the largest companies in the U.S. are in their late 60s and 70s. Among the CEOs of the S&P 500, several are in their 70s and even 80s. Warren Buffett is the oldest CEO at age 89 and is still wildly successful at what he does.

If you need help planning for the later chapters of your life, please consider contacting us to inquire about our financial planning and investment management services. We are a fee only fiduciary advisor located in Des Moines, IA serving clients across the U.S. You can email us at or call us at 515-557-1860.

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