Post-Retirement Work May Not Save Your Golden Years

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By Chris Metinko

NEW YORK -- For the many who have fallen behind in their retirement savings, the prospect of part-time work in their golden years is a very real possibility. However, it may not be wise to count on those paychecks after leaving your regular 9-to-5.

Recent numbers show employers may not be too keen on hiring older, part-time employees. In fact, a new study by Bankers Life shows nearly three-quarters of retired baby boomers currently aren't working for pay. Another survey by the Transamerica Center for Retirement Studies found more than half of workers in their 50s and 60s said their employers don't offer -- or they are not sure they offer -- benefits such as part-time work or flexible schedules to help employees who are transitioning into retirement.

%VIRTUAL-pullquote-It is unreasonable to expect your retirement job to be in all ways equal to your pre-retirement job.%"It is unreasonable to expect your retirement job to be in all ways equal to your pre-retirement job," said Christopher Carosa, president of Carosa Stanton Asset Management. "Although a few succeed at this, most need to temper their expectations regarding post-retirement work."

That said, Carosa adds seeking a flexible schedule or part-time work isn't an unreasonable strategy -- and not just because one may need money. He said many are opting for "retirement careers," because people are retiring younger and healthier than ever before and many desire to maintain the social and intellectual stimulation offered by a working environment.

"The most successful people pick a post-retirement career in a field or activity they have had a lifelong passion for," Carosa said. "When retired, it's best to work at something you really love doing since the psychological benefit will be of greater value than any monetary benefit. For this reason, many will pick hobbies or some other formerly avocational activity."

Paul Lewis, a financial and wealth adviser at Research Financial Strategies, said he agrees post-retirement work can be financially beneficial, but advises it to be a desire -- not a need.

"The problem that I discuss is that if you cannot retire without counting on part-time employment, you may not be a good candidate for retirement," Lewis said. "I assume a person thinking about retiring is in his or her peak earning years, and I explore extending to full Social Security benefit, or working a bit longer and focusing on accumulating capital."

Lewis said this can sometimes mean telling clients they aren't ready for retirement. "I would rather my clients have a suitable amount of assets to be financially secure and work part time if it is something they enjoy, or possibly supplement their or replace retirement income as a choice rather than a need," he added.

The good news is that seems to be the case for many, with the Bankers Life survey reporting that of those currently working, 61 percent say they are working because they want to work, not because they have to work -- adding a little cushion to their retirement.

Robert Martorana, a portfolio manager at Right Blend Investing, said he often runs retirement simulations for clients, and working during retirement can be a tremendous help.

"I always encourage clients to keep their options open if they have the willingness and ability to work during retirement, either full time or part-time," Martorana said.

"The key issue is control," he added. "Will they be able to control their hours? If it is their own business, or if it's consulting work, they may be able to work part-time at their discretion. I would strongly encourage retirees to seek income opportunities during retirement that they directly control. They cannot rely on an employer to help support their retirement dreams."

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