Shortages in some sectors make partial retirement an inviting opportunity for both parties.
Not every person who reaches retirement age wants full retirement. Some labor markets make it easy to ease into retirement while helping out employers, according to The New York Times in “In a Tight Labor Market, Retirees Fill Gaps Their Previous Employers Can't.” Some retirees are not ready to quit working and some employers aren't ready to let them go. In a tight labor market, firms find recent retirees increasingly attractive.
Montefiore, a large hospital located in the Bronx, N.Y., is one of many organizations developing informal programs to rehire some retired employees. Administrators noticed that half of its nurses were nearing 50. It didn't have a nursing shortage and wanted to prevent one. It now routinely brings back retired nurses on a freelance basis. It's good for the hospital and the retirees, who can supplement their pensions.
This has become more common than at any other time since the Great Recession, says Kathleen Christensen, who funds research on aging and the American labor market at the Alfred P. Sloan Foundation.
There's a shortage in many sectors, including construction and transportation, so the attitude toward older workers is changing.
One large northeastern power company is also bringing back retirees, using their years of experience to train younger employees. This company's management deliberately stays in touch with retirees, allowing some to work part time and taking others on, as needed, for short term projects. Since they are brought back on as contractors, not employees, they continue to receive their pensions.
The boom in online shopping has had an impact on delivery services. UPS has organized a program to recruit retirees. Management sought to bring back retired workers and has also tapped the older workers in construction to help with new facilities that are being built.
In other words, when you retire, don't be surprised if you're asked to come back.
One thing to keep in mind if your retirement includes going back to work: how will your income impact your Social Security benefits and your overall retirement plan? Sit down with an experienced estate planning attorney to find out how your new life as a freelancer or independent contractor will impact your tax liability, your government benefits and your estate plan.
Resource: The New York Times (July 15, 2018) “In a Tight Labor Market, Retirees Fill Gaps Their Previous Employers Can't”