September 20, 2022

Older and Self-Employed – a Satisfied Group

The transition to retirement can take many paths.

A couple years ago, Joelle Abramowitz at the University of Michigan described three groups of self-employed workers over 50. The bulk of them work independently, either as independent contractors or doing odd jobs, and are more often minorities, with very low pay and few employee benefits. Think Uber driver. The other two groups are business managers and business owners, who are predominantly white, male and in good financial shape.

In a follow-up to her earlier research, Abramowitz dug into 24 years of data to understand the self-employed older workers’ attitudes toward work and the transition to retirement. She found a heterogeneous group with a range of views about whether they are transitioning at all.

The independent contractors and workers stand out for being more likely to describe themselves as “partially retired.” Although they are self-employed, they apparently have their eyes on retiring. In addition to gig workers, they might be a caregiver, a stylist in someone else’s salon, or someone who drives people to the airport for a chauffeur company.

These workers have started their current jobs more recently than the owners and managers and say the work itself is not particularly stressful, which could indicate one of two things – that the job is less challenging than their past work or that its main purpose is just to generate extra income to bridge the financial gap to full retirement.

The owners and managers are much less likely to consider themselves in any stage of being retired, even though their roles may be changing. Their level of engagement reflects that. They usually work 30 to 40 hours and feel more stressed than the independent self-employed workers or older employees who are still on a company payroll. …Learn More