The August 2008 issue of Insight Magazine included an article entitled, “Still Working?,” which featured an interview with Mark J. Gilbert, CPA/PFS and principal with Reason Financial Advisors, Inc. Insight Magazine is the official publication of the Illinois CPA Society. The article focuses on older Americans’ gradual trend to forego traditional full retirement and opt instead for “phased retirement.” Phased retirement could mean working shorter hours, taking leaves of absence, choosing to work for a different company, or becoming self-employed.
This trend could partially be attributed to Americans’ growing concern about their financial preparedness for retirement. A 2008 survey by the Employee Benefit Research Institute showed that only 18 percent of workers are confident about having enough money saved to retire. “Longer life expectancy means more financial resources are needed to support an employee’s life,” Gilbert said, “so the idea of working for pay in retirement is probably very appealing to a significant number of employees.”
However, many retirees may also choose to continue working simply because they are still healthy and enjoy working. “The oldest Baby Boomers have begun to retire, and most of them probably look at work as a way to demonstrate that they really haven’t aged,” Gilbert said.
Phased retirement can also benefit employers. “It allows the employer to transition the position to a younger employee who can still learn from the experienced employee,” Gilbert said. “Depending on the salary structure, the employer may even save money.” Gilbert, a Downers Grove resident, provides portfolio management and financial planning services to middle market and high net worth clients in Cook County and DuPage County.
Reason Financial Advisors, Inc. is an independent, fee-only financial planning and investment advisory firm working with individuals and families throughout the Chicago metropolitan area.