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Jobs Without Benefits Help Retirees Bridge the Gap

Category: Financial and taxes in retirement

January 16, 2022 — A significant number of workers underestimate their financial needs in retirement, and that includes calculating how much they will receive from Social Security. As a result they often retire too early and start taking their Social Security before they maximize their benefit. The end result is that they face an income shortfall in their retirement years. A new study from the Boston College Center for Retirement Research has concluded that taking a non-traditional job late in one’s career can help retirees avoid a serious shortfall in replacement income, and thus have a more comfortable retirement. Replacement income is defined as the ratio of a worker’s retirement income to pre-retirement income.

The study, “Does Late-Career Nontraditional Work Improve Retirement Security?” by Matthew S. Rutledge and Gal Wettstein followed 3 groups of 61 and 62 year olds were working in traditional careers. One group continued to work, one retired, and the other took some type of nontraditional job without benefits. The nontraditional jobs lacked health and retirement benefits, but did allow older workers to prolong their employment, and increase lifetime earnings for Social Security and retirement. The authors questions wondered if workers in traditional jobs at 62 who are underprepared for retirement are more likely to switch to nontraditional work, and whether it helps. The results could come up with any evidence that they are more likely to switch, but those who did switch closed much of the gap in their retirement security by age 68.

The researchers define nontraditional as jobs in the gig-economy, on-call work, temporary, part-time, and/or self employment. These jobs did not include health insurance or retirement benefits.

The major conclusion from the study is that underprepared workers who shift to nontraditional jobs can significantly improve their retirement security by age 67 or 68.

Traditional and nontraditional work boost financial preparedness by about the same amount. The researchers found that both surprising and encouraging. They weren’t quite sure why the nontraditional jobs helped about the same as those staying with their traditional careers, but one thought was that both groups realized they faced a retirement shortfall and thus took steps to improve their situation.

One discouraging lesson from the research was that it was unclear that underprepared workers will take on nontraditional jobs. But those that do improve their replacement income ratio.

Bottom line

No one has a good excuse for not knowing what their Social Security benefit will be. True, your working days might end a few years before you intended, but by your late 50s the die is pretty well set – your benefit will be calculated on the basis of your 35 highest earning years. Various Social Security Calculators can estimate your benefit in a few minutes.

This study highlights that if it looks like your replacement income is going to run short of where it needs to be for a comfortable retirement, continuing to work or taking a nontraditional job for a few years can make up that shortfall. That assumes of course, that you are healthy enough to continue working.

Comments? Have you taken on or considered looking for a part time job in your 60s or 70s? If so, did it help you towards a more comfortable retirement? Please share your thoughts in the Comments section below.

Posted by Admin on January 15th, 2022


  1. We purchased a beach condo in my late 50s that I operated as a vacation rental for the next 10 years. I could do it mostly from home except for the trips down there to perform maintenance 4 or 5 times a year. But after several hurricanes and trouble keeping good cleaning services, it became too much of a burden to justify the declining income.

    by LS — January 16, 2022

  2. DH & I continue to work in our small business as consultants and wholesale providers to a few long-term customers, bringing in supplementary income until DH claims his SS benefits when he turns 70 next year.

    The Affordable Care Act was a game changer for DH and me from the period of our semi-retirement at 63 until we qualified for Medicare.

    For now we have my SS (claimed at 65) and his 50% SS spousal claim against my earnings, the money our business brings in, and occasional dips into our retirement savings when necessary.

    Will we work after age 70? Perhaps. It’s enjoyable and can mostly be done remotely. With this crazy economy we’ll wait to see how the year spins out.

    by JCarol — January 16, 2022

  3. My neighbor in Florida who is in her 70’s and lives there full time fell into a job that she didn’t expect but loves. She is fit and healthy and would walk the elderly neighbor’s dog. That grew into walking a few of the neighborhood dogs each day, then she started tending their flower gardens and landscaping just so she could be outside. She didn’t do it to get paid but they did pay her weekly. When the snowbirds all left which was 50% of the neighborhood, she continued the garden work and also checked the inside their homes each week. I think it’s great .she doesn’t have to drive anywhere and she loves doing it plus she makes a decent amount of money. She didn’t realize the need was there and they pay her well to keep her, she says she’s as busy as she wants to be and can’t take on anymore clients. Wish I would have thought of this.

    by Barbara — January 20, 2022

  4. Another study from Boston College – the biggest thing you can do to maintain your standard of living if you are near retirement and haven’t saved enough money. It isn’t saving more money – it is too late for that. Working longer and postponing retirement is the most effective thing you can do.

    by John Brady — January 21, 2022

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