Only about a third of the older people who are working full-time will go straight into retirement. Most take zigzag paths.
These paths include gradually reducing their hours, occasional consulting, or finding a new job or an Uber stint that is only part-time. Other people “unretire,” meaning that they retire temporarily from a full-time job only to decide to return to work for a while.
A new study finds that the paths older workers choose are influenced by their personality and by how well they’re able to hold the line against the natural cognitive decline that accompanies aging.
Researchers at RAND in the United States and a think tank in The Netherlands uncovered interesting connections between retirement and cognitive acuity and, separately, and a variety of personality traits. To do this, they followed older Americans’ work and retirement decisions over 14 years through a survey, which also administered a personality and a cognition test.
Here’s what they found:
Cognitive ability. The people in the study who had higher levels of what’s known as fluid cognitive function – the ability to recall things, learn fast, and think on one’s feet – are much more likely to follow the paths of either working full-time or part-time past age 70.
The probable reason is simply that more job options are available to people with higher cognitive ability – whether fluidity or sheer intelligence – so they have an easier time remaining in the labor force even though they’re getting older. …
J.D. Vance’s rural Kentucky roots, described in his book, “Hillbilly Elegy,” differ from my father’s family in southern Indiana in one important way. Vance’s violent, angry mother was a substance abuser with a trail of failed relationships in her wake. Vance carries the childhood scars. My dad’s family was a bunch of kind, reticent, teetotaling farmers.
Alvin and Lena Belle Blanton and sons Gerald and Leland, 1966.
But the similarities between our families struck me too – Vance called his grandfather Blanton “Papaw,” which I’d always thought was unique to my own Papaw Blanton but, I now know, is an endearment. And believe me, the corn fields and hills of southern Indiana and contiguous Kentucky are more southern than Midwestern. My grandma’s fried chicken was heaven.
The backdrop for Vance’s hillbilly stories emerges front and center in my own take on family: I look at rural poverty through a socioeconomic lens.
Vance, an acclaimed writer and Silicon Valley investment banker, “got out” via the Marine Corps, Ohio State University and Yale Law School. “To move up,” he writes, “was to move on.” With sheer determination – supported by his tough, caring Mamaw – he overcame long odds, childhood stress-eating, and psychological retreat from a conflict-filled home. His Yale scholarship wasn’t earned on grades but because “I was one of the poorest kids in the school.”
To be clear, I do not see “getting out” as pejorative. Nor does “getting out” mean getting away from family. Rural people relocate in search of better job opportunities than what is available in depressed areas with eerily quiet “downtowns” of struggling or abandoned establishments pushed out of town by big-box retailers like WalMart and fast-food joints. Getting out is code for earning a decent living, buying a modest house, having health insurance, and being able to retire. In short, capturing the American Dream.
In my family, the strategy of getting out worked for some but not for others. Please bear with me through my generational story.
My late father, Leland Blanton, left home – Jasonville, Indiana, population 2,147 – so that my two brothers and I didn’t have to. His father – Papaw – owned a small-town gas station and, due to childhood polio, walked with a cane. A midwife helped my father’s true-grit mother deliver him into a three-room farmhouse with an outhouse. Twenty years later, his ticket out was a high test score that paved the way to becoming a hotshot pilot in the U.S. Air Force in the 1950s and 1960s. Greenland, Saudi Arabia, Morocco, Greece, Germany, Bangkok, Saigon, Turkey – he flew to every corner of the globe. We all lived nearly three years outside Tokyo. …Learn More
The first thing that came to mind while listening to a recent webcast about part-time students was, Wow, people like me who attended four-year colleges are clueless about how hard it is to be a part-time student!
My second thought was better summed up by one of the webcast’s panelists. Solving part-time students’ immense financial and logistical challenges “is really about economic and social mobility for a large group of citizens in our communities,” said Karen Stout, president of Achieving the Dream, a non-profit network of community colleges that promotes students’ success.
Four in 10 U.S. college students are part-time and about four in 10 part-time students drop out very early in their education, according to the Center for American Progress, which hosted the discussion and produced the video above.
The panelists – and two former part-time students who shared their experiences – described the high obstacles part-time students overcome to receive a two-year degree, or to move on to further educational programs. To succeed, these students need financial support and an understanding of their particular needs: …Learn More
The superlatives come fast and furious in the spate of reports coming out on the dwindling participation in the labor force by Americans still in their prime working years.
The fall in men’s participation in the United States has been going on for decades but has been steeper here than in all but two advanced economies (Israel and Italy) in recent years. “We have won the race to the bottom,” says Nicholas Eberstadt, an American Enterprise Institute scholar and author of “Men Without Work: America’s Invisible Crisis.”
A more recent drop in labor force participation for American women is “unique” – in the rest of the developed world, women’s participation continues to rise, according to a Brookings Institution report.
Men with no more than a high school degree make up 40 percent of workers but 60 percent of those who have dropped out of the U.S. labor force.
The decline in participation has been steepest among men without a high school education, particularly black men.
Economists count not only working people as being in the labor force but also people who are trying to find a job. Something is amiss when millions of Americans in their prime – between ages 25 and 54 – are doing neither, especially in a strong economy like the United States is experiencing now.
This issue is not new, but the election has brought it front and center. Also, the prolonged decline in men’s labor force participation had been partly masked by increasing women’s participation, which pulled up the aggregate figures. Now that women have begun withdrawing, the trend has become increasingly obvious – and ominous.
The Brookings and AEI scholars offer myriad, often overlapping, explanations for why this is happening: …Learn More
No one really needs confirmation of how tough the Great Recession was. But the Center for Retirement Research at Boston College has quantified the decline – and it’s brutal.
Investment losses and falling home prices placed 53 percent of U.S. households in danger of a decline in their standard of living after they quit working and retire, reports the Center, which funds this blog. That’s up sharply from 45 percent in 2004, prior to the financial boom, which created a strong – albeit fleeting – increase in Americans’ wealth.
The longer-term erosion in Americans’ retirement prospects is even more troubling and reflects deeper issues. The Great Recession just hammered the point home.
In 1989, just under one-third of Americans faced such dicey retirement prospects. The steady erosion since then coincides with the near-extinction of traditional employer pensions that guaranteed retirees a fixed level of income. It turns out that the DIY system that replaced them, a system reliant on Americans’ ability to save in their 401(k)s, is not working.
Older baby boomer households with 401(k)s have just $120,000 saved for retirement, according to the Center. That’s not even enough to pay estimated medical costs not covered by Medicare. Retirement savings for all older boomer households is a paltry $42,000 – that means a lot of people have no savings…Learn More
The promise of America is progress, but that progress stalled for the youngest generation: U.S. workers under age 45 earned dramatically less than workers who were that same age a decade ago, the Federal Reserve Board’s latest survey shows.
For Americans 35 through 44, the median household income – the income that falls in the middle of all earners – was $53,900 in 2010. That’s 14 percent less income than in 2001 when households in the 35-44 age bracket were earning $63,000, according to the Fed’s Survey of Consumer Finances released Monday. For young adults in the under-35 age bracket, median income fell to $35,100 in 2010, from $40,900 for that group in 2001.
The median income also declined, by nearly 9 percent, for Americans in their peak earning years, 45 through 54, to $61,000 in 2010 from $66,800 in 2001. [Incomes for all years are in current dollars.]
The sharp decline in real incomes, especially for young adults, occurred in a decade bracketed by the high-tech bubble of early 2000 and the jobless recovery of 2010 from the financial crisis. Without further analysis, it’s difficult to pinpoint precise explanations for the patterns. But the reasons vary depending on the age bracket being analyzed.
For the youngest workers, incomes may be lower if many are extending their college educations – high school and college graduates face the lowest level of employment ever recorded. Learn More
Baby boomers who’ve left the labor force in their pre-retirement years are in better financial shape than they once were.
The wealth of non-working Americans between ages 55 and 61 increased from $83,000 in 1992 to $98,000 in 2008, according to new research from the Urban Institute in Washington. (Comparisons are in constant dollars.)
Potential explanations for this trend range from greater U.S. inequality that launched more boomers into the top wealth tier to a rise in the numbers of married men who don’t work – but have wives who do.
Barbara Butrica, a senior research associate at the Urban Institute, said her study did not look into the “why” for the emerging group of voluntary non-workers who are approaching traditional retirement ages, married and single men in particular. One possibility, she said, is that “they are leaving the labor force because they can afford to.” …Learn More