You may dream of early retirement, but remote work can make extending your career a tempting option. It turns out that working later in life can have significant benefits for both your health and finances. If your employer is pressuring you to return to the office, or if you want to negotiate your way to a work-from-home (WFH) position, there's new data to show the advantages to you and your employer.
These benefits are not trifling. The Journal of Epidemiology and Community Health found that those who worked just a year beyond retirement age had a 9% to 11% lower risk of dying during the 18 years the research covered, regardless of health. And the National Bureau of Economic Research revealed that delaying retirement from 66 to 67 could increase retirement income by 7.75%.
For employers hoping to retain talent, older workers who can work remotely, at least part-time, are less likely to retire. That can save employers on hiring and training costs for new employees.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Remote work opens the door to late retirement
Before the COVID-19 pandemic, only around 6% to 8% of employees worked remotely. The number of remote workers more than tripled in 2020, and although it has declined since, twice as many people now work from home compared to before the pandemic.
Remote work changed many aspects of life, but a new study from the Center for Retirement Research also revealed that it's making later retirement not just possible, but much more likely.
CRR used data from the Current Population Survey to determine the impact of working remotely on retirement. Researchers focused on people aged 55 and up who were employed and had no major health issues. The study controlled for the fact that remote employees often have higher salaries, do less physical work, and have more education. Still, CRR found that working remotely had a meaningful impact on retirement choices.
In fact, someone who works remotely was 1.4 percentage points less likely to retire compared with an employee in a similar position who commuted to the office. Based on the retirement rates of those included in the research, this reduction in the likelihood of retirement represents a 14.4% decrease.
Remote work had the third-largest marginal effect of any characteristic on the likelihood of retiring within the upcoming year. Astoundingly, working from home made an employee less likely to retire than a doubling of weekly earnings, working in a physical industry or having dependent children. Only working part-time or a spouse retiring played a bigger role in the likelihood of someone leaving their job.
Why does remote work allow for later retirement?
The Center for Retirement Research doesn't delve deeply into why working remotely makes someone more likely to stay on the job. However, researchers suggest "the flexibility and ease of commute offered by remote work could encourage late-career individuals to work longer and delay retirement. "
A considerable amount of other research shows that a shift to remote work has allowed more people with disabilities to find and maintain gainful employment. This could suggest that older workers are more likely to stay on the job if they develop health issues, when medical problems may have otherwise prompted retirement.
Remote work also opens the door to relocating without having to retire. Harvard Researchers assessing the impact of a 2012 work-from-home experiment found that workers who were older and closer to retirement age were more likely to relocate to retirement-friendly destinations in Florida and Texas once working from anywhere became possible.
If workers have more flexibility in when, where, and how they work; can save commuting time; and can live where they'd like, it's not a surprise that they'd be more amenable to staying at their jobs.
Regardless of the reasons, though, it's clear that remote work has an impact on retirement and that later retirement can have positive effects. Those nearing retirement age may want to explore the possibility of going remote if they're hesitant to give up their careers entirely, but want an easier workday as they approach their final day of work.
Read More
-
Vacationing With the Grandkids: What Could Go Wrong?Traveling with your grandkids may be on your bucket list, but before you book the trip, consider the downsides of gramping.
-
Our Annual Grandparents’ Guide to Today’s Pop ArtistsIf you grew up loving Dylan, Coltrane or other great artists, here are some modern musicians that tap into similar styles and spirits. Check out our playlist.
-
Our Annual Grandparents’ Guide to Today’s Pop Artists
If you grew up loving Dylan, Coltrane or other great artists, here are some modern musicians that tap into similar styles and spirits. Check out our playlist.
-
What You Expect in Retirement vs What You Get: Where Reality Can Surprise YouA financial planner explores how your expectations for retirement can greatly differ from reality — and how you can plan for that.
-
Seven Habits Rich People Swear By to Build and Maintain WealthUnlock the secret to lasting financial success by adopting the wealth-building habits of a high-net-worth individual.
-
Retirement Spending Got You Stressed? Six Signs You Need HelpSaving for retirement is the easy part. Spending those retirement dollars may cause too much stress and require help.
-
What's Up With the 10-Year Treasury Bond: Four Financial Experts Weigh InA financial professional and three colleagues explain the fluctuations in the 10-year Treasury bond and what investors should do.
-
Thinking About Buying a Boat? 10 Things to Know FirstPlanning on buying a boat in retirement? Think of it as a hole in the water you dump money into, says one expert. But it's not all bad.
-
A Smart Way to Combat Economic Rollercoasters: CD LaddersSavings With rates on CDs remaining high for now, a CD ladder allows you to maximize your returns with flexibility to your cash when you need it.
-
Time to Spring-Clean Your Finances: A Financial Professional's Four Steps to Tidy Them UpA midyear review of everything from spending to saving, with adjustments as needed, can set you on track to financial security. Plus, don't forget to check in on your workplace benefits.
