Bridging the Gap in Retirement

Nowadays, many retirees (or soon to be retirees) want to work to some degree in their retirement years. These so-called “bridge jobs” can serve many purposes, such as the need for income, the social aspects of a workplace, or perhaps even just a sense of satisfaction in the value of the work itself. All well and good, but there’s a risk here as well for retiree’s: employment risk.

For instance, retirees assume their health will be good and they will be physically able to work at a job. That may be true for some years, especially at the start of retirement. But for many, the aging process will eventually slow down or limit the types of work retirees can do. Given our economic trend toward more service-oriented jobs, retirees will likely need to stay current on technology, such as computers and the internet. That assumes retirees will be mentally able to work at a job.

Going to work for a new company after reaching a traditional retirement age is also becoming more common. Some employers allow for older employees to “slow down” by working part-time, but many do not. So keeping the job interview skills sharp is another challenge faced by today’s retirees.

There’s also the obvious impact of the economy on local jobs. While a retiree may plan to work for “just a few more years” with a particular company, if that employer experiences financial difficulties in an economic downturn, jobs may be cut back or the company may even go out of business. So even assuming a “bridge job” will be available for a retiree is a bit of a gamble.

Family demands may also limit the retiree’s choice of bridge jobs. Retirees may want a fair amount of flexibility in their schedules, perhaps to take short vacations to visit adult children, to take time off during the day to watch a grandchild’s school play, or maybe to care for a retired sibling who is ill. Employers with deadlines to meet may not be able to provide the scheduling flexibility a retiree wants.

So if you (or a loved one you know) are at or approaching retirement and plan to work a “bridge job,” be careful about how much you let the bridge job influence your plans. The risks of assumed/expected employment are real for retirees. To maximize your retirement readiness, plan ahead, hope for the best, but remember to be realistic as well.

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About Mike Wilson

Michael L. Wilson, MBA, CFP®, CRC®, is the owner of Integrity Financial Planning. Prior to founding Integrity in 1998, he worked for two years as a faculty member at the College for Financial Planning in Denver, training other financial advisors. Mike has 10 years of experience in the mutual fund industry, having worked with Fidelity Investments and Invesco Mutual Funds. He holds an MBA in Finance from Baylor University. Learn more about his work at www.integrityplanner.com.
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