It may not be the age they thought they would be starting a new career, but more workers in their 60s are signing up for part-time or non-traditional gigs to earn a few extra bucks.
So how exactly did pre-retirees join their millennial colleagues in perfecting the art of the side hustle?
Like the saying goes, necessity is the mother of invention, and it all stems from sixty-somethings being pushed out of their jobs and into unemployment earlier than planned, often due to job cuts, COVID-related layoffs, health issues, or simply a desire for less stress.
As a quick review of the stats, fully half of all workers are not able to work as long as they would like, and on average stop working four years earlier than planned, according to Morningstar data.
The Center for Retirement Research at Boston College took a look at workers age 62 or over who take on what they call “non-traditional jobs” after leaving full-time employment. These are often part-time or independent contractor jobs that typically have little or no benefits. like health insurance or a retirement savings plan. It may involve working part-time in a store over the holidays, driving for a ride-sharing service, or tutoring students for college entrance exams.
The remuneration may be less than they earned in the corporate world, but these part-time jobs more than serve their purpose, says the Center for Retirement Research. Nontraditional jobs need not be ‘bad jobs’, they argue. Compared to traditional work, they say, these gigs may be a better fit for workers in their 60s looking to prolong their careers with less stress and more flexibility.
More importantly, these non-traditional jobs help less-prepared workers close the financial gap, by postponing the age workers need to start drawing on their savings, and in some cases even letting them sneak more money into their retirement nest egg.
In fact, conclude researchers, workers in their early 60s who are financially unprepared for retirement and take on a non-traditional gig to earn some extra income, can significantly catch-up money-wise by age 67 or 68.
In their surprisingly upbeat conclusion, researchers found that even jobs that do not offer health and retirement benefits can help close the retirement income gap and offer unprepared workers meaningful improvement in their financial security.
The Takeaway: Not quite ready to retire? Don’t be shy about taking on that part-time or informal gig. It will keep you active, give you more flexibility in your spending, and will help your retirement savings stretch farther.