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Full Retirement 'Fading' Amid Partial Retirement Trend

By    |   Friday, 29 November 2013 12:15 PM

Americans aren't retiring the way they used to. Instead of making an abrupt and complete exit from the workforce, many people are choosing to partially retire.

"Partial retirement" is a trend where people take jobs that provide less than half the maximum annual earnings they had over their working lifetimes, Business Insider reports.

About 15 percent of workers between the ages of 60 and 62 are fall into that category, according to a study from the University of Michigan.

Editor’s Note: Obama Donor Banned This Message (Shocking)

This phenomenon of partial retirement was “virtually non-existent” among people of this age in the 1960s, the researchers say. But the trend has remained relatively stable since 1990.

For workers between ages 65 and 67, the option is even more popular. A drastic increase was seen between 1970 and 1990, when the partial retirement rate topped 20 percent, the study says.

Researchers found that the state of the labor market and inflation are two factors that influence partial retirement rates.

If unemployment rises 1 percent nationally, it leads to a 1 percent drop in employment of 55 to 75-year-olds. Workers 63 to 67 witness a full 2 percent drop in employment in that environment, Business Insider says the research shows.

Since workers around retirement age are particularly sensitive to employment rates, partial retirement tends to accelerate during periods of high unemployment, the study says.

High inflation also tends to reduce the incentive to maintain full-time work and correlates with an increase in partial retirement, the researchers noted. They point to the fact that inflation was on an upward trajectory in the 1960s and early 1970s when the partial retirement trend was taking root.

As the option has grown in popularity in recent decades, the spells of partial retirement have also increased, the researchers added.

This study seems to confirm other research showing that “traditional one step retirement appears to be fading,” they concluded.

A study from HSBC also points to the popularity and increasing interest in semi-retirement.

A total of 19 percent of respondents between ages 55 and 64 consider themselves to be semi-retired, and another 32 percent hope to move into semi-retirement before retiring full time, US News & World Report says.

The appeal of partial retirement varies, with many people claiming they just like to work.

“Most people who have participated in the workplace over the last 30 years have found themselves in a position of importance or relevance, and it's very hard to walk away from being relevant,” Brian Schwartz, a vice president and financial adviser for HSBC Securities tells US News.

But some people need to continue working for financial reasons. Many workers say they cannot afford to retire full time, they need to overcome a lack of retirement income or they need additional income to pay off mortgages or other debts.

Editor’s Note: Obama Donor Banned This Message (Shocking)

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Americans aren't retiring the way they used to. Instead of making an abrupt and complete exit from the workforce, many people are choosing to partially retire.
Friday, 29 November 2013 12:15 PM
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