I MAY BE THE POSTER child for the new retirement, switching back and forth between standard employment and side gigs, as I seek work that I find fulfilling. I’m not alone: It seems many people are retiring earlier than they planned and then working part-time, moving in and out of the workforce based on need and opportunity.
The annual Retirement Confidence Survey from the Employee Benefit Research Institute (EBRI) shows that—while workers expect to retire at age 65—the median retirement age is actually 62. Indeed, in the latest survey, a quarter of today’s workers said they expect never to retire or to work until they’re at least age 70, and yet only 6% of current retirees waited that long.
For some early retirees, a health crisis or disability forces them to quit work sooner than anticipated. Meanwhile, corporate restructurings force others out of the workforce. In the past 18 months, some lost their jobs as businesses closed or scaled back because of COVID-19. For others, a decade of rising financial markets has provided enough savings for them to contemplate retirement. On top of all that, workplace disruptions during the pandemic showed that technology can make consulting and remote work much easier to manage. A recent New York Times article showcased stories of people retiring earlier than expected due to economic changes.
It isn’t just people in their early 60s who are retiring early. EBRI reports that 15% of the retirees surveyed said they retired before turning 55. Another 28% retired between ages 55 and 61, and 39% retired between ages 62 and 65.
I view the increasing number of early retirees as a great thing. But I also believe many folks won’t be happy with a life of pure leisure and instead they’ll want to remain engaged in the world. That might come in the form of more consulting activity, part-time work or perhaps volunteering. Early retirement from the traditional nine-to-five world provides the flexibility for this sort of life. In the years ahead, I suspect even more people will seek some kind of fulfilling work after their main career draws to a close.
My contention: The traditional work-retirement distinction may be breaking down and a new retirement construct could be emerging. It will be fascinating to dive into the EBRI survey results in the coming years to see if the pandemic has indeed altered the retirement landscape.
My work landscape has certainly shifted. I’m in my early 30s, with a portfolio large enough to cover my (admittedly modest) living costs, making me financially independent. Still, I continue to seek traditional fulltime employment, while enjoying side hustles such as consulting in investments and financial planning, and also teaching finance here in Jacksonville, Florida.
There can be drawbacks to depending on these side gigs. For one, I might miss out on the typical compensation increases for people climbing the corporate ladder. Also, side hustles don’t provide valuable benefits like paid leave, employer retirement contributions and health insurance. Working independently also affects social connections. In my lonely office, there’s no shooting the breeze with coworkers at the coffee machine.
Here’s another thing about side hustles: You have to hustle. You’re your own salesperson. Assignments rarely are presented on a silver platter. In my ideal world, I’d have a meaningful traditional job, while also dabbling in a few consulting projects, including teaching.
Still, working only side gigs for most of 2021 has been interesting. I’ve probably learned more this year than in the prior six years of traditional fulltime work. It’s paid the bills and kept me sharp for my next career endeavor—be it traditional employment or continuing down the independent road. And along the way, I’ve had a glimpse of what the new retirement—or perhaps the new work world—will look like.
Mike Zaccardi is a freelance writer for financial advisors and investment firms. He’s a CFA® charterholder and Chartered Market Technician®, and has passed the coursework for the Certified Financial Planner program. Mike is also a finance instructor at the University of North Florida. Follow him on Twitter @MikeZaccardi, connect with him via LinkedIn, email him at MikeCZaccardi@gmail.com and check out his earlier articles.