Not quite ready to retire: ‘Bridging’ the gap

Eighty-five percent of baby boomers say they never want to retire. Instead, many of them (63 percent, according to one study) say they would like to work part-time before full retirement.

“Retirement at age 65 is giving way to this process called ‘bridging,’ ” says economist Jeff Thredgold.

“People will want to work three days a week, or even two weeks and two weeks off” to give them more time for interests outside of work.

The changing nature of the labor force – which is expected to grow by an annual rate of less than 1 percent per year over the next 30 years, the slowest it has ever grown – will make employers more accommodating of such requests, Thredgold says.

If you’re interested in “bridging,” or phased retirement, there are several options, according to the employment web site Monster.com:

• Ask your current employer about working a reduced schedule or the possibility of working from home, called telecommuting. You could also put your qualifications to use by seeking another job within the same industry.
• Make a fresh start. Many older workers have found success – and gained a sense of making a difference – at a nonprofit. The pay might be less, but the environment allows for more flexibility.
• Become an independent contractor and work on your own terms: part-time, part-time while also working for another employer, or something planned for when you begin collecting Social Security benefits.

Of course, it pays to calculate how working will affect your retirement benefits. According to AARP, current pension rules prevent employers from giving partial retirement payments to workers who want to cut their hours before retirement age.

Social Security benefits are another story. If you retired early and are still below your full retirement age (that is, between age 62 and full retirement), your benefits will be reduced slightly if you earn more than a certain amount per year, according to the Social Security Administration web site.

However, after you reach your full retirement age, you can collect retirement benefits and continue working without reducing your benefits. What’s more, if you do return to work after you start collecting benefits, you may receive higher benefits based on those earnings. Please see www.ssa.gov/r&m5.htm, call 1-800-772-1213 or visit your local Social Security office for more information.

AARP offers many online resources on careers for those 50 or better, including advice for job hunters; job accommodations can help you overcome health limitations; employment rights and more. Visit www.aarp.org/money/careers.

Copyright 2008 BadgerBoomers.com

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