The Benefits of Late-career Job Changes
Finding a new job in one’s 50s is not that easy to pull off, and it’s risky if the new employer doesn’t work out. But there’s a silver lining for people who can make the change to a job they feel is better: they work longer than those who don’t make a move.
A new study by the Center for Retirement Research, which supports this blog, finds the probability that older workers remain in the labor force until they’re 65 increases considerably – by 9 percentage points – if they voluntarily made a job change sometime during their 50s.
This lends credence to other research showing that when older workers voluntarily find a new employer, they often experience more job satisfaction and less on-the-job stress, which makes it easier to resist retiring.
The benefits from changing jobs are both psychic and practical.
More than half of U.S. workers haven’t saved enough. A few more years of work increases your monthly Social Security, reduces the number of years an under-saver has to finance in retirement, and gives retirement savings accounts a little more time to accumulate investment earnings.
The researchers started following the workers when they were between the ages of 51 and 56 and tracked them until they turned 65 to see if they had kept working or retired. Their analysis compared people who voluntarily changed jobs – about 13 percent of everyone studied – to those who remained with their early-50s employers.
The study identified a job change’s influence on prolonging work after controlling for other reasons that older workers might work longer. For example, people who are healthier, have a white-collar job, or still have a mortgage also tend to remain in the labor force longer.
Workers who changed jobs delayed their retirement dates regardless of their socioeconomic status – defined by whether they have spent some time in college. However, the effect was somewhat larger for better-educated workers.
Job-changing in one’s fifties is more common today than it was in the 1980s and early 1990s. Luckily, this has come at a time Americans need to work longer to improve their retirement prospects.
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There is also the added twist of having to change careers, not just employers, in one's 50s. I'd be curious to know how starting over that late in your working years would affect income, retirement age, satisfaction, etc. It's becoming an increasingly likely scenario for workers of all ages, given how rapidly technology obsolesces any number of professions. I'd also be curious to know whether workers in their 50s are affected by the "gig economy" — also a growing phenomenon with companies wanting to avoid having to subsidize health insurance and preferring the on-demand flexibility of contractors.