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The golden years ... at work?

More and more baby boomers anticipate that their retirement, at least in the early years, will include work in some form.
/ Source: Business Week

On my desk is a pile of recent surveys and studies that purport to be about retirement. Yet when I open them up and actually read them, the main issue they seem to address is working — "in retirement."

If you've been reading BusinessWeek or any other mainstream financial publication, you know that a substantial number of baby boomers anticipate that their retirement, at least in the early years, will include work in some form. One example of the numbers being put forth recently comes from a study commissioned by AARP, "Workers Age 50+". The study, done by Towers Perrin human resources consultants, based in Stamford, Conn., found that "68 percent of age 50-70 not-yet-retired workers plan to work in some capacity into their retirement years — or not retire at all."

Experts in fields as diverse as economics and psychology offer reasons why we should plan to continue working, even after starting to collect a pension or cutting the cord to our full-time career. In "Working for a Good Retirement," a paper published by Boston College's Center for Retirement Research (BCCR), the authors suggest a rather patriotic rationale: If you work longer, you'll probably put more money into Social Security and take out less than you would have otherwise. What's more, you'd be contributing to economic productivity and increasing the possibility that you'll have more to spend, thus helping to fuel the national economy when you do retire.

Brain drain
And while the articulated focus is often on how employers can retain their experienced workers, the subtext of publications such as the book "Lost Knowledge: Confronting the Threat of an Aging Workforce," by David DeLong, a research fellow of the Massachusetts Institute of Technology's AgeLab, is that by staying in the workforce, you could help stanch the brain drain that's predicted to occur in American industry as the boomers start to retire en masse.

Then there are the psychological and social reasons for working longer. With increasing longevity, people who retire in the coming decades may have as many healthy, post-work years to live as they had working years. That's a lot of time to fill up. Yet, the argument goes, total retirement — i.e., golfing seven days a week or watching TV all day — can get pretty boring. It can make you and anyone who lives with you cranky and frustrated. What's more, when you retire you may suddenly realize that most of your social contacts were at work, and those relationships are hard to maintain when you're not in the workplace loop.

Going cold turkey
And at least one overview of relevant research, "Does Working Longer Make People Healthier and Happier?" by Esteban Calvo, a research assistant at the BCCR, concludes that "working to an older age could have a number of positive physical and psychological effects." These include reducing the likelihood that you'll experience depression or that you'll need assistance with daily tasks, such as bathing and dressing, as you age.

If you're one of those people who plan on retiring and going cold turkey from work, should you abandon the idea and plan to work longer? Maybe — but not necessarily. Yes, there are good reasons for many people to keep working, even if they don't need to. And the benefits extend beyond the merely financial.

But remember that part of retirement planning is financial and part is lifestyle. Has your planning included serious thought about how you'll spend the extra hours in your day? Have you figured out how you'll replace the benefits — financial, psychological, and social — that you get now from your work?

New focus
Maybe the answer for you will be to develop a hobby, such as stamp collecting or visiting Civil War battle sites, into a major, time-consuming, non-paying pastime. But on the other hand, you could find that the best way to replace the rewards you receive from work is to keep working — especially if it's a different, less stressful job, with fewer hours, a new boss (maybe even yourself), and a new focus.

The best time to give serious thought to this issue is before you retire from your main job, before you burn any financial or social bridges. Planning ahead will also give you time to negotiate a new role with your current employer or, if you want a change — such as working for yourself or starting a small business — to get your financial ducks in order before your paychecks stop.

In our fast-paced world, it's all too easy too assume that the only retirement planning required is to figure out how much money to amass in a 401(k) or individual retirement account. But money is not the only valuable resource available to spend in retirement. Another is your time. As with the money, it would be a shame to waste it.