No matter who is doing the research, the conclusions always seem to be the same. Americans want to keep working. And many are—past the normal retirement age and often past the age at which they could retire in comfort.

Financial advisors are bearing witness to this trend, and it’s affecting their practices in mostly positive ways. First consider the research:

  • Three in 10 retirees have worked for pay in retirement, according to the Employee Benefit Research Institute’s 2017 “Retirement Confidence Survey.” Nearly eight in 10 workers plan to work for pay in retirement, and nearly four in 10 (38%) workers expect to retire at 70 or beyond, according to the institute.
  • Women age 65 to 74 spend on average 7.28 hours per week at work and men age 65 to 74 spend 12.25 hours per week at work, according to a 2017 analysis by the Bureau of Labor Statistics. However, half of women age 65 to 69 in the labor force are working full time, according to the Census Bureau’s 2016 Current Population Survey data.
  • Income from working represents, on average, about one-third of all income received by Social Security beneficiaries (those age 65 and older). But it represents an even bigger share for Social Security beneficiaries in the upper income quintile. According to the Social Security Administration, income from working represents nearly 84% of all income for those Social Security beneficiaries age 65 and older with incomes of $72,130 to $1,540,449.

“It appears to me that the notion of a fixed retirement date or age is starting to unravel,” says Dan Galli, a principal of Daniel J. Galli & Associates. The normal triggers that say people should retire at age 591/2, 62, 65, for example, “seem to be less of a factor,” he says.

Others are witnessing that trend play out with their clients as well. “After nearly 25 years, I am seeing a growing trend towards working later in life,” says Ed Gjertsen II, a vice president at Mack Investment Securities. “I am seeing far fewer clients ‘hang it up’ and hit the couch.”

To be fair, advisors are not keeping exact track of the number of older clients who continue to work for pay, but they can give ballpark estimates. For instance, Karin Maloney Stifler, co-founder of Walden Wealth Partners, and Richard Salmen, the CEO of Northern Financial Advisors, both estimate that 20% of their older clients continue to work for compensation. And Dana Anspach, founder and CEO of Sensible Money, estimates that fewer than 5% of her clients who could retire comfortably continue to work either full or part time.

Why Work Longer?
Older clients are working for pay past normal retirement age for a variety of reasons. In some cases, it’s out of need—they need the income to support their lifestyle. In other cases, it’s out of want—they want to keep busy.

And in still other cases, the reasons are all jumbled together. Many Americans derive their sense of identity and purpose from their work. For some, doing nothing can be terrifying, no matter how much money they have.

In his practice, for instance, Salmen says some of his older clients who keep working do so because it adds “meaning” to their lives. “They enjoy the work,” he says.

Anspach has clients who are working longer for similar reasons. “We find that once clients know they don’t have to work, it frees up energy that causes them to feel better about the work they do,” she says. “When they do choose to keep working, it is for reasons that match their values, not because they feel like they have to. This makes a huge difference in their life.”

Besides satisfaction and meaning, some clients who work longer want to sleep through the night. “I believe the echoes of the financial crisis still linger and working later in life adds a little more stability and peace of mind,” says Gjertsen.

“Many of my clients are middle/upper middle class,” says Salmen. “They do not have so much money accumulated that they feel completely comfortable. The extra income allows them to feel better about spending money on themselves and enjoying life versus living more frugally during their early retirement years. When they keep working, they have more flexibility in the choices they make.”

Preserving financial capital is yet another reason clients choose to keep working. “The money helps the portfolio and it gives us time to get them to finally start tracking their expenses, plan an income strategy and also build out their personal life so that they truly enjoy retirement,” says Lisa A.K. Kirchenbauer, president of Omega Wealth Management.

Some clients, meanwhile, continue to work because they need something to do. “I just had a client who can retire but is working part time with her previous employer and part time at a clothing store,” says Gjertsen. “This keeps her busy, which is suited for her personality.”

And that’s not an uncommon reason. “Some have an inbred work ethic,” says Maloney Stifler. “They have a ‘die-with-their-boots-on’ mind set. They view leisure negatively.”

Clients also continue to work for practical reasons; they need employer-sponsored health care, for instance. “For the few who keep working, the primary reason they keep working is the need to feel productive,” Anspach says. “A secondary reason is to subsidize the cost of health care up until age 65. If an employer covers the majority of health-care costs, the total return on investment from working is far greater than the salary or hourly compensation received.”

And some clients work because they need income to support their lifestyles. “Some do not feel they have saved enough money to be able to retire and live their lifestyle,” says Frank St. Onge, an advisor with Total Financial Planning.

To be fair, St. Onge says, it’s not always the case that clients don’t have enough income to retire without working for pay. Rather, they haven’t crunched the numbers to learn whether they could afford to retire or they have ungrounded fears about not having enough money. “From my discussions, it would be clear they have not seriously looked at their retirement benefits such as pensions and Social Security,” he says. “In other cases, they have not or do not want to answer the question ‘How much is enough to have saved to retire?’ From my review of their investments and their sources of income for retirement, they have much more than they will ever need or could spend.”

Other clients have to keep working because they don’t have a retirement plan in place. “They haven’t defined the vision for the next chapter of their life—retirement,” says Maloney Stifler. “They are not ready to let go because they don’t know what’s on the other side of the decision.”

In other cases, clients choose to work for reasons that are hard to pin down. For instance, St. Onge says some of his clients received early buyout packages from their employer; they received what would have been their age 62 defined benefit pension at age 55.

Then, a few months after taking an early buyout package, they got an opportunity to work for another company at almost the same salary as what they were making before the package. “Now they are awash in money and are still working 10 years later,” he says. Are they working because they don’t have enough saved, or to stay busy, or some other reason? Yes, to all three variations.”

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