Saving for retirement can be stressful, especially if you're running short on time and your nest egg isn't as large as you'd like. It's a common problem among Americans -- in fact, close to half of baby boomers have no retirement savings at all, according to a report from the Insured Retirement Institute.
However, there's good news for those who have fallen behind: There are some new retirement trends that could make it easier for you to get by with a smaller amount of savings during your golden years.
"Unretirement" is the new retirement
Traditionally, workers have spent most of their adult lives employed, and either building up pensions or, in more recent decades, stashing money away in retirement accounts. Then at some point in their 60s, they leave their jobs and spend the rest of their years retired.
Today's workers, though, have a different idea of what their retirements will look like. A whopping 92% of workers currently in their 40s say they plan to keep working part-time in retirement, according to a survey by TD Ameritrade and The Harris Poll. Even among those in their 70s, 52% say they plan to continue working an average of 10 hours a week.
Additionally, many workers say they don't plan to ever fully retire. Among those in their 40s, 61% of respondents said they'd prefer to take year-long "mini-retirement breaks" while they're younger, and then work until a later age, rather than work continuously for four decades or more and then retire completely.
These "unretirement" trends could be good news for those who are struggling to save for the future because it could mean you won't need to save as much to enjoy a comfortable retirement.
If you're still working 10 or 20 hours a week in retirement, you naturally won't need to draw as much cash from your investments to make ends meet because you're still getting a small paycheck. And you can still collect Social Security benefits even if you're working, although if you're below your full retirement age, the size of your checks may be reduced, depending on how much you're earning at your job. If a good chunk of your retirement income is coming from your part-time job and Social Security checks, your nest egg will last a lot longer.
Another benefit of continuing to work is that it can keep your skills sharp. If you're fully retired for 10 or 15 years, but then run low on savings and need to return to the workforce, it may be particularly challenging to find a job with an out-of-date skill set. But if you've been working part-time, even if you take a break for a year or two, you'll be far more in tune with the latest trends and technologies in your industry, which will make it easier to pick up right where you left off.
Is "unretirement" a good fit for you?
Working on a part-time basis throughout retirement may be a good option for many retirees, but it's not necessarily the right choice for everyone. Before you make it part of your long-term plan, it's important to ask yourself a few questions.
First, consider how likely it is that you'll be physically able to continue working in retirement. If you have health issues now that are liable to grow more acute as you age, it would be a risky gamble to plan your retirement around the idea of having income from a part-time job.
But assuming your health holds up, there's another set of questions: What type of job do you think you'll want in retirement -- and do you have reason to believe you'll be able to find that type of gig? For example, do you intend to stay in your current industry? If so, are there part-time positions available, and are there older workers taking them? Are employers likely to offer you the flexibility to take mini-retirement breaks every few years and then come back to work?
If you plan to explore a new field, look into the types of job opportunities that are out there and make sure you're qualified for them. Even if there are roles that don't necessarily need an advanced degree in a subject or years of hands-on experience, it might not be easy to land a job in an entirely new industry when you're in your 60s or 70s.
Finally, ask yourself if you're likely to be happy with this type of lifestyle. Retirement will be your opportunity to relax and live life however you choose, so you ought to spend your time doing things you enjoy. For some people, working part-time may be a pleasant opportunity to learn new things and make some extra cash at the same time. For others, though, continuing to work after retirement may sound like a dreadful idea. If you're one of them, you'd likely better off saving more intensively now so you can afford to fully retire when you're ready.
Working during your golden years may not be everyone's cup of tea, but it could be the ticket to a far more comfortable and enjoyable retirement. If your savings are slim and the idea of keeping busy with a part-time job sounds more appealing than ending your working days with a full stop, "unretirement" may be one of the best financial decisions you can make.