A Cost in Retirement of No-Benefit Jobs

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Only about one in four older Americans consistently work in a traditional employment arrangement throughout their 50s and early 60s. For the rest, their late careers are punctuated by jobs – freelancer, independent contractor, and even waitress – that do not have any health or retirement benefits.

Some older people are forced into these nontraditional jobs, while others choose them for the flexibility to set their own hours or telecommute. Whatever their reasons, they will eventually pay a price.

The Center for Retirement Research estimates their future retirement income will be as much as 26 percent lower, depending on how much time they have spent in a nontraditional job. During these stints, the issues are that they were not saving for retirement or accruing a pension and may have had to pay for health care out of their own pockets.

The researchers estimated the losses in retirement income to these workers by comparing them with people who have continuously been in traditional jobs with benefits. The workers in their analysis were between the ages of 50 and 62 and were grouped based on how their careers had progressed. The groups included people whose careers were primarily traditional but were interrupted by periods of nontraditional, no-benefit work, and people who spent most of their time in nontraditional jobs.

This last group lost the most: they had accrued 26 percent less retirement income by age 62 than the people who consistently held a traditional job. Who are these workers? They are a diverse mix that includes people who dropped out of high school and are marginally employed and people who are married to someone who is also employed and has benefits.

The workers who had mostly-traditional careers, with some stints in nontraditional jobs, had about 6 percent less retirement income.

This study “illustrates the importance of ensuring that all workers have access to affordable health benefits and convenient retirement savings vehicles,” the researchers concluded.

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I’m 57 and aware that jobs without the benefit of “accruing a pension” and other benefits have existed for a very long time. Research is always beneficial, but so is perspective and action. We can research and write about it, but who has the political will or ability to change the working landscape?

Michael Waggoner

Social Security is a great program, but it is not enough by itself.
We have major tax subsidies for retirement preparation, but those subsidies work best for those in higher tax brackets and closer to retirement and with steady employment.
There is a lot of hostility in some quarters to more regulations, but we should consider requiring provision beyond Social Security for retirement.
Because it can be so hard to set up and operate a defined-benefit pension, particularly for people with irregular employment history, it might be best to have defined-contribution programs. DC’s only work if programs are established, the employees are enrolled, they make substantial and regular contributions, and they neither performance-chase nor get early withdrawals.

Dave G.

I still run into folks who under-reported their earnings and sadly ended up with very low Social Security retirement benefits. Some are self-employed and inflicted the damage on themselves; others worked odd jobs for cash or otherwise off the books. It’s a high price to pay for avoiding a relatively small tax.


I am 58 and 3x’s in my career, a corporation downsized, a mid-size sold or simply closed leaving me back in the freelance gig environment.

What I am saying is some of us due to circumstance did not have a choice.

Yet, having been raised in a independent farm family – there is a lot to learn about being independent and wisely saving throughout that ‘career’ as an independent. Can’t go back in time…but perhaps I would have been better off just being independent throughout my entire working career.


Those who have expressed their acknowledgement of the article’s dire conclusions generally feel as if they cannot change anything acting on their own. Of course they cannot. That is why it is important to be involved in your own firms (while you are in traditional employment with benefits) to maintain benefits, counter discrimination against disabled or formerly disabled and older workers, and insist upon training that is at least on par with younger workers. Just as important, get involved in social and political debate to protect those who are, or will be, working in the non benefited work environment, often through no fault or choice of their own. If there is one lesson in what an individual can do to improve his social situation, it is to work with others to support progress in national and local political policy. Acting alone does not get anyone very far. Acting in concert with others is the only way forward.


An impressive share! I have just forwarded this onto a friend who had been conducting a little
homework on this. And he in fact ordered me lunch due to the fact that I discovered it
for him… lol. So let me reword this…. Thanks for the meal!!
But yeah, thanks for spending the time to talk about this matter here
on your blog.

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