Posts Tagged "retirement"

Blue-Collar Workers Often Retire Early

Construction workers

Construction and factory workers, truck drivers, and cleaning crews don’t always have the flexibility to work a few extra years to beef up their monthly Social Security checks.

Several blog readers stressed this point in their comments on a recent blog article, “Changing Social Security: Who’s Affected.”

Lorraine Porto retired from a desk job, but her family is filled with craftsmen, carpenters, electricians, farmers, and truckers who worked “until they were worn out.”

People in white-collar jobs don’t always appreciate “just how tough and demanding it is” to climb poles every day, descend into manholes, build skyscrapers, or bring in the hay in 90-degree heat and sub-zero temperatures, Porto said.

Her comment was in response to the article, which described a study about a hypothetical increase in Social Security’s retirement ages. It found that if Congress were to increase the earliest possible age for starting Social Security from 62 currently to 64, blue-collar workers would have much more of an adjustment to make.

Blue-collar workers, Kenneth Wegner wrote, “are less physically able to remain in their jobs.”

Policymakers are well aware of this concern, and a proposal to increase the early retirement age isn’t currently on the table. Yet many people are deciding to postpone retirement on their own. The general trend in recent decades is for all workers – even some people in physically demanding jobs – to delay when they collect Social Security.

That wasn’t possible for Mark Roberts. The former electrician, who worked on construction sites in Austin, Texas, said he had to go on disability due to an old foot injury that got worse over time. Now 67, he said he wasn’t able to work long enough or earn enough to save for retirement and ekes out an existence on his Social Security checks.

“I have to survive for a month on what I used to make every week,” he said.

White-collar workers who lose their jobs can also find themselves in a similar predicament. …Learn More

Does Retiring Cause Memory Loss?

After four or five decades of work, retirement is liberating! It’s gonna be great! Right?

Well, not necessarily. It depends on how you retire.

In this video, Ross Andel, director of the School of Aging Studies at the University of South Florida, warns that a risk to retiring is that it can “speed up the aging of our brain. It could make us slower and more forgetful.”

His research demonstrates how work and retirement influence brain functioning. He tested the memories of people in their early 60s living in Canberra, Australia. Every four years, they were asked to remember as many random and unrelated words in a list as they could.

Naturally, they couldn’t remember as many words at 74 as at 62. “This is quite normal,” he said.

More interesting was what Andel found when he separated the test results for the retirees from the results for the older individuals who were still working. The decline in memory was almost exclusively among the retirees.

“Something seems to happen around the time of retirement to make people more forgetful,” he said.

Andel isn’t recommending that you work until you drop. He does provide a roadmap for limiting memory loss so you can enjoy retirement.

To find out what he has in mind, you’ll have to watch the video. …Learn More

Man building a house

Changing Social Security: Who’s Affected

Due to the strength and agility required for physical labor, half of blue-collar workers sign up for Social Security as soon as they’re eligible – at age 62.

But a large majority of white-collar workers wait so they can lock in a larger monthly check for retirement.

White-collar vs Blue-collar age 62In a new study, Lindsay Jacobs at the University of Wisconsin found that blue- and white-collar workers would also respond very differently to potential increases in the program’s two benchmark ages: the earliest eligibility age and the full retirement age.

Raising the earliest eligibility age to 64 would not change retirees’ lifetime benefits. But a two-year hike in the full retirement age would amount to a significant benefit cut – and with the depletion of Social Security’s trust fund projected for 2035, some version of this change might one day be considered.

The first change – raising Social Security’s earliest claiming age – would require a much bigger adjustment by blue-collar workers. Jacobs predicted that this group would respond by working an extra year, on average, compared with a few more months for white-collar workers.

Requiring workers to wait longer for their benefits does have a financial advantage: a larger Social Security check every month. The problem for some blue-collar workers is that they couldn’t make it to 64. One result, then, is that increasing the early retirement age would push up applications to Social Security’s disability program, according to the study funded by the Retirement and Disability Research Consortium.

Jacobs gauged the impact of raising the early retirement age based on how quickly workers’ declining health would affect their ability to work as they age. To understand how they would react to raising the full retirement age, she examined how workers’ decisions about retiring, saving, and signing up for Social Security would change under various policies. She classified the workers as blue- or white-collar using data that describes job tasks to show that the physical demands at work influence these decisions.

The second possible change would increase the full retirement age by two years, which amounts to an across-the-board cut in benefits regardless of when workers claim them. In response, white-collar workers, who are already more inclined to hold out until the full retirement age, would be more likely to work even longer to reach the new, higher benchmark age.

But blue-collar workers would bear the brunt of the benefit cuts, because their physically demanding jobs would often prevent them from working longer to offset the cuts. …
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Senior man working

Men’s Health and Disability Applications

It’s often true that men in their 50s who’ve done physically demanding jobs for decades develop debilitating conditions. But they’re not old enough to retire and collect Social Security.

Particularly during economic downturns, many of these workers have turned to a fallback option: federal disability benefits.

While economic conditions and policy changes are primarily responsible for the year-to-year changes in applications for disability, there is growing evidence of worsening health and functioning among men in their 50s and 60s. A new study has found that these trends have also increased the number of older workers who may qualify for disability benefits.

The researchers first confirmed past studies showing that this population’s health has gotten worse since the 1990s. More of them are suffering from various debilitating conditions, including asthma, hypertension, diabetes, and cancer.

The older workers also increasingly reported having trouble carrying out some basic activities required to do their jobs, such as reaching overhead, kneeling, and standing for two hours. Evidence of the older workers’ deteriorating condition over time was confirmed in separate analyses of two different surveys: the Health and Retirement Study and the National Health Interview Survey.

The heart of the study was to measure the potential impact of declining health and work capacity on the Social Security disability program.

The analysis finds that the deterioration in men’s health is likely to have increased the share of these men who could qualify for disability benefits by more than 15 percent between the mid-1990s and mid-2010s. The rise in potential demand for benefits was unrelated to the aging of the baby boom population, which the researchers accounted for.

Economic downturns like the Great Recession increase disability applications and awards. But those increases are usually temporary. …Learn More

Two older workers

Older and Self-Employed – a Diverse Lot

Self-employed workers who are 50 and older fall into a hierarchy of sorts, a new study finds.

The largest group is the 75 percent who work independently in jobs like freelancer and gig worker. Their average earnings are low – $18,000 a year – and they are more likely to be women or Hispanics.

The other 25 percent of the self-employed older workers are primarily white men and are evenly divided between business owners and managers who work on a contract basis. These individuals tend to be doctors, lawyers, or executives in industries ranging from finance and construction to retail.

To get a better handle on who is choosing self-employment and why, University of Michigan researcher Joelle Abramowitz analyzed 2016 survey data from the Health and Retirement Study. These data included not only older workers’ employment status but also specific information about their employers, industries, and occupations.

The self-employed account for roughly one out of five older workers, but the arrangement is especially popular among boomers over 65 – a third of the workers in this age group are self-employed.

Abramowitz’s research, funded by the U.S. Social Security Administration, finds a lot of diversity in the jobs the self-employed do and in their perceptions of work.

The low-paid independent workers dominate jobs like caregiver, cleaner, farmer, artist, and beauty industry worker. Many view themselves as “retired” and say they would rather not work but apparently need to supplement their retirement income.

In contrast, the owners and managers are far less likely to see themselves as officially retired. Compared with the independent workers, they earn considerably more and are wealthier. The net value of their financial, housing and other wealth exceeds $1 million on average.

Their attitudes are different too. …Learn More

Video: Boomers in RVs Seek Job, Security

Sales and rentals of recreational vehicles have skyrocketed during the pandemic as people working remotely use their newfound freedom to move their workplaces to the great outdoors.

Outdoorsy – the Airbnb of recreational vehicles (RVs) – reports that 40 percent of its new rental customers are under age 40. But long before younger adults hit the road, thousands of baby boomers were buying RVs to roam the country in search of work.

Rather than seeking psychological relief from COVID, as younger workers are doing, the boomers – some retired and some unemployed – are looking for financial security.

In this excellent PBS NewsHour segment, Paul Solman talked to boomers who park their RVs at campsites near whatever seasonal jobs they can find at places like Amazon and JCPenney warehouses, sugar beet farms, and theme parks and national parks.

During the summer tourist season, Judy Arnold has been working at Yellowstone National Park in Wyoming. But with so many businesses shut down by the pandemic, she worries about where her next job will come from. “I definitely need an income,” she told the NewHour.

George Stoutenburgh gave two reasons for his wanderlust. …Learn More

Boomers Move into Post-Career Jobs

Post career jobs chartMany baby boomers retire the conventional way – by leaving their career jobs. For the others, the first step in retiring involves stopping over in a different job than they’ve held for years.

A sketch of the older workers who transition to post-career jobs – and their reasons for doing so – emerges from a survey of a fairly elite group of mostly college-educated professionals: clients of the Vanguard investment company.

They made the job transitions for a variety of reasons.  More than half of them either had initially retired but decided to go back to work or were forced out of a long-term job by a layoff, firing, or business closure. However, Vanguard’s clients are apparently in good health, because they rarely made changes due to a medical condition.

The boomers usually changed jobs during their 50s. The post-career jobs were often in entirely different occupations or industries, which required the workers to make big trade-offs, according to the 2015 survey, which was designed by Vanguard and several academic researchers.

The old positions were usually full-time, and, as a result, had rigid schedules. Half of the people who found a new job said they now have flexible schedules. But everyone who moved into a post-career job took a 20 percent pay cut, on average, either because they’re working fewer hours or are in a different industry or occupation where the skills honed over the years are not as valued.

There’s also telling evidence that many of the boomers in post-career employment were eager to make this tradeoff. They typically moved from the career job to the new one in about a month, an indication that many had landed the new job prior to leaving the old one. …Learn More