The new retirement: Scale back, work on

By Kiplinger's Personal Finance Magazine

Although the oldest of the baby-boomers are on the verge of traditional retirement age, there is nothing traditional about the way many of them plan to spend the next few decades.

The old model of a leisure-filled retirement is giving way to a new prototype: Many older workers will downshift from full-time to part-time jobs before quitting completely. More than three-fourths of boomers say they expect to work in retirement, either part-time or intermittently, according to a 2004 AARP study.

Why? Most say they want to stay busy, and about one-third of them will need the money to bolster meager retirement savings or replace lost pensions.

The Bureau of Labor Statistics projects that the number of employed Americans ages 55 to 64 will increase by more than 50% between 2002 and 2012. But despite an impending shortage of younger workers, many corporations are still reluctant to hire gray-haired employees, whom they view as too expensive in terms of salary and benefits, and too old to learn new skills.

Until more companies overcome those fears, consider the following strategies if you are 50 or older and looking for work, or just planning ahead:

• Stick with your current employer, but reduce your workload;
• Join the ranks of a new class of workers called cyber agents, who use their home computers to earn a living;
• Become a "seniorpreneur" and launch your own business.

The trend: Easing into retirement

Marlyn Schepers, 72, is at the forefront of the phased-retirement revolution. After 43 years as a structural engineer with Stanley Consultants, Schepers negotiated a deal seven years ago that let him work reduced hours on a flexible schedule, providing him with plenty of time to travel and plenty of income to pay for it. He describes his work arrangement, which averages ten to 15 hours a week, as "almost ideal."

Bob Berg, vice-president of human resources for Stanley, an engineering, environmental and construction-services company, calls the firm's decades-old phased-retirement program a "win-win situation" for the company and its workers. "These people have an extraordinary amount of knowledge, and we don't want to see it walk out the door," he says. "Plus, they're still using their gray matter, and the extra money is always nice, too."

Berg estimates that three out of four retirees take advantage of the firm's offer to stay on the job on a schedule that meets their needs. Some stay just a few months, and others, like Schepers, continue for years. The company is always on the lookout for experienced hands to hire as new employees, too. During the past year, for example, more than one-fourth of its new hires were 50 or older.

Because of Stanley's enlightened workplace policies and the value it places on experience, last year the AARP named it one of the best employers in America for older workers. This is the third time in five years that the Muscatine, Iowa, firm has won top honors. It was one of 50 diverse companies around the country that the AARP selected as top employers, based on their employee-development opportunities, health benefits, workforce age, alternative work arrangements and retirement plans. Health-care companies dominated the 2005 rankings, followed by financial-services and educational institutions. Experienced workers in fields that are short on experts will be able to find plenty of work on their own terms.

Back in 1998, when Schepers was 65, he agreed to continue working on a part-time basis. Some weeks, he works 35 hours; others, none at all. The flexibility has allowed him and his wife, Mary Ann, to travel to 20 countries over the past seven years. During his work week, Schepers passes on what he has learned over the past half-century with the company to a younger crop of electrical engineers.

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