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Retirement changes for many older workers

It’s not surprise that many workers who are nearing retirement are realizing they did not save enough money and they will have to continue working. But the fact is, only a small percentage of people who plan to work in retirement are actually able to find a job.

How hard is it for older workers to find work?

According to Sara Rix, strategic policy adviser at the AARP Public Policy Institute in Washington, "The portion of pre-retirees who say they expect to work in retirement is very high, between 60% and 80%.” But the reality is that the proportion of people who actually work in retirement is much lower. For instance in 2012, this number included an estimated 18.2% of people 65 and older.

So if older workers expect to continue to work and many of them have not saved sufficiently for retirement, why are we seeing so few older people continue to work? According to Rix, it’s tough for many older workers to find the right employment. One of the problems could be the tough job market, but Rix claims discrimination against older employees may also be to blame, although this number is difficult to calculate.

Although many older workers are very skilled, it’s not unusual for them to experience extended periods of unemployment, especially in this job market. Many of them just give up. If they do eventually find jobs many complain they are working for much less money than they were in previous jobs.

The rise in disability benefits for older workers

Many retirees also claim they would like to work but they find maintaining a full-time, eight hour per day job impossible given their health condition. A recent study of Boomers by MetLife Market Institute found that health issues were the reason 17% of older Boomers retired.

Many workers who have not reached their full retirement age and who are severely disabled may have the ability to apply for Social Security Disability Insurance benefits. These benefits are offered to workers who are less than their retirement age, who have a severe health condition which will last 12 continuous months and who are not working. Older workers who have reached their full retirement age, however, will not qualify for SSDI and must apply for SSA retirement benefits instead.

What should you do before retirement?

As mentioned above, older workers may face age discrimination or other factors such as debilitating health which makes it difficult for them to work. Despite these obstacles, however, there are several things you can do to make sure you have sufficient funds for retirement. Here are five steps you should take immediately:

1. Start planning long before you retire.
2. If possible, stay in your current job, even if it's in a reduced capacity.
3. Consider turning a hobby into a job or business.
4. Be prepared to make less money — a lot less.
5. Live as conservatively as possible.

If you have questions about your financial situation, talk to a financial adviser who can review your position and make sure you have taken all the proper steps before it’s too late.
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