Near Retirement Workers May Gain From Jobs Without Benefits Says Study

Near retirement workers ages 62 to 68 could benefit from taking jobs with no health or retirement benefits says a new study by economists in the Center for Retirement Research at Boston College.

Those jobs provide little opportunity to save, and leave workers financially vulnerable to health shocks but they can give near retirees greater retirement security by letting them reap higher annual Social Security benefits by delaying payouts and putting off draining nest-eggs from 401(k)s and other sources, argues the report.

This kind of employment may help workers in good health unprepared financially for their later years lengthen their careers and improve their retirement security, claim the authors, Boston College economists Mathew Rutledge and Cal Wettstein.

“These jobs may even be a better fit for workers interested in moving gradually into retirement because

of declining physical abilities or preferences for work-life balance,” they assert.

Counteracting this wisdom, Rutledge and Wettstein say workers reach age 62 with impending retirement difficulties take advantage of jobs without health and retirement benefits less frequently those with more retirement wealth, especially in the form of business income.

They have a theory that workers 62 to 68 expecting to have low incomes in retirement may prefer to keep their current jobs with benefits or take jobs without, only to find out poor health prevents them from working at all.

“While working longer (in their existing jobs with health and retirement benefits) may be helpful to older individuals with remaining work capacity, it may not be an option that helps all individuals who reach early retirement age insufficiently prepared,” the Boston College Center for Retirement Research economists caution.

The full 32-page report:

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