Why Your Prime Earning Years Could Begin at 50
Life + Money

Why Your Prime Earning Years Could Begin at 50

iStockphoto/The Fiscal Times

It’s hardly a secret that older Americans are postponing their retirements well into their late 60s and beyond. 

A combination of longer life expectancy, depleted savings after the Great Recession, rising out-of-pocket Medicare costs, and a seismic change in the retirement landscape with the disappearance of defined-benefit plans has kept millions of seniors on the job. 

Related: Aging Americans Push for More Flextime 

Until recently, it was common for many seniors to take low-paying, part-time jobs to ease the transition to retirement (think Wal-Mart greeter or telemarketer). But a new study by the non-partisan American Institute for Economic Research found that many older Americans are no longer willing to settle for less; they’re shifting into more permanent -- and rewarding -- careers. 

“This need for a longer-lasting income, combined with a weak labor market, has led many older workers to come up with creative strategies to earn,” the AIER report stated. “One such strategy is a later-in-life career change.” 

Occupational mobility among older Americans ranged from 1.5 percent to 3.5 percent of all year-to-year career changes in the labor market during the period of 2003 and 2012, but then it began to rise. Now, between one million and two million Americans aged 45 to 65 change their careers every year, according to Census data. 

Broadly speaking, a career change is a move from one type of job to another, but many researchers agree that a career change is qualitatively different from simply performing the same job for another company or getting a promotion within one company. 

Related: 10 Best Jobs for Americans Over 65 

Older workers interviewed for the study say the key to making a successful career change is to be flexible in dealing with perspective employers and honing or learning new skills. That could mean, among other things, increasing computer and social media skills, broadening their understanding of social and health problems or taking courses at a community college or school. 

Many of those interviewed said that they were seeking new forms of employment that have “deeper personal meaning” for them. 

These older workers making dramatic changes in their extended careers typically entered “helping professions” and moved to careers such as health aides, teachers, nurses, computer programmers, social workers and managers, according to the report.   

When asked what was most helpful to them in making this transition, 44 percent cited grants and scholarships for training and education, 40 percent said volunteer programs, while others cited experience gained through national community service or classes at community colleges or other schools.

Related: Why Youth Unemployment Is Still a Huge Problem 

The study, based on analysis of  U.S. Census data and a 2014 AIER survey of older workers, had these main finding: 

  • Of the older adults who attempted to change careers rather than just changing jobs, most were successful.
  • The majority of successful career changers said their move has made them happier – a real plus. Indeed, 72 percent interviewed said that emotionally they felt like a new person, while 65 percent said they were less stressed out than before.
  • Many of these successful career changers said that the change actually increased their income. Fifty percent of those interviewed saw an increase in their incomes, 31 percent saw a decrease and 18 percent said their income stayed the same.
  • Transferable skills were deemed among the most important factors in successfully changing careers. Those included computer skills, knowledge of a foreign language, strong abilities at math and quantitative analysis, and the ability to get along with other workers and customers. 

Related: Keep Health Care Costs from Ruining Your Retirement 

As the workforce population continues to age, demographers and public policy makers are focusing more attention to the phenomenon of the older worker and the impact it may have on the economy in coming years. The share of people aged 55 and older increased to 26 percent in 2013, up from 21 percent in 1980. By 2030, the share of the population 65 and older will jump to 19 percent, compared to just 13 percent in 2010, according to the U.S. Census Bureau. 

An AARP study of 1,705 older workers found that market forces and personal motivation often are prime factors in determining how older Americans decide to extend their careers. For example, many who lost their jobs through corporate downsizing or the recession tended to find new jobs in a similar field. But people motivated by non-market forces tended to make “more drastic career changes” that often put them in an entirely different field. 

Top Reads from The Fiscal Times: