Why It Matters:
  • Hoping to work way past the average retirement age isn’t a plan.
  • Even those in white-collar jobs are sometimes sidelined by the effects of aging.
  • An unexpectedly early retirement age not only adds years to retirement, but it also could reduce anticipated Social Security benefits.

For clients who say they’ll work all the way up to age 70 to claim the maximum Social Security benefit, here’s a stark reminder: How long they work may not be entirely up to them.

A study from the Center for Retirement Research at Boston College has found that in many cases, even for white-collar jobs, a decline in cognitive ability may cut short a career just as declines in strength or agility may end a labor-intensive job.

That makes preparing for retirement today more important than ever.

Early retirement, ready or not?

An unexpected early retirement might not just cut short the number of wage-earning years a client is counting on but also could torpedo the Social Security benefit a client may have anticipated when they plugged their expected retirement age into the calculator at the government’s my Social Security site. That’s because retiring before full retirement age (FRA) means monthly benefits are reduced, for life.

The study, “How Do Job Skills That Decline With Age Affect White-Collar Workers,” examined hundreds of careers and shed light on those most likely to be curbed by declining cognitive skills, diminishing eyesight, and dexterity.

“Researchers and policymakers frequently suggest that individuals should work longer to boost their retirement preparedness,” the study reported. “Often it is assumed that while this advice may be difficult for blue-collar workers to follow, white-collar workers can more easily extend their careers. While it is true that blue-collar workers are more likely to rely on abilities that decline early, workers in some white-collar occupations face similar challenges. Indeed, for white-collar workers that rely on fluid cognitive abilities, quick reaction times, and fine motor skills, retirement tends to occur relatively early.”

Workers can hope to work for as long as they want, but they can’t guarantee things won’t change. And the list of jobs that fall victim to unexpected early retirement is eye-opening.

Boston College researchers created a “Susceptibility Index” ranking more than 950 occupations by likelihood of early retirement due to health and other factors. Not surprisingly, “dancer” fell at the bottom with the highest age-related risk. There aren’t a lot of 70-year-old full-time professional dancers. That was followed by helpers working in construction, mining, and fishing. At the top — those least likely affected by age — were benefits managers, teachers, and sociologists.

But look in the middle, around number 475, and you find medical technicians, music directors, electrical engineers, surgeons, and retail sales workers. Not the types of occupations that might be thought of as at risk from the effects of aging.

The study and the index demonstrate that nothing is a given. Planning to work late into the 60s or even 70s isn’t a guarantee and doesn’t replace a lifetime of retirement saving and financial planning.

If you have clients who say they plan on working into their 70s, share this study. The goal is not to discourage them, it’s great they love their job, but to open their eyes to the unexpected. Remind clients hoping to work longer doesn’t replace responsible retirement saving. Encourage them to stay current in their industry, cognitive abilities are as important as physical abilities. And look at retirement savings with an eye toward “what if,” as in “what if I am laid off and can’t find something new?”

“The notion that all white-collar workers can work longer or that all blue-collar workers cannot is too simplistic,” the study concluded. “Instead, it is important to consider the particular abilities required by an occupation and whether these abilities decline significantly by the time workers reach typical retirement ages.”

Things To Consider:
  • Help clients understand when they retire might not be entirely up to them.
  • Consider talking with clients about investing even more now, just in case they can’t work as long as they hope.
  • Help clients understand the value of staying up-to-date with developments in their industry. Staying on top of technological advances is crucial.