Retirement & Financial Planning Report

While “nontraditional” jobs commonly lack key fringe benefits such as health insurance and retirement plan coverage, they can be attractive for older workers, especially those who already have built up such security, a study has said.

“Many older workers in nontraditional jobs may have held traditional jobs earlier in their careers, during which they may have been able to accumulate enough savings to make a job without fringe benefits more feasible once they reached older ages,” says a white paper from the Center for Retirement Research.

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It noted that there are varying definitions of what constitutes a nontraditional job but that commonly they involve an independent contractor type arrangement that does not confer benefits as opposed to employee status that does.

“While traditional jobs provide more security, nontraditional jobs may help older workers extend their careers, giving them an opportunity to improve their retirement prospects,” it added. “These jobs may even be a better fit for workers interested in moving gradually into retirement because of declining physical abilities or preferences for work-life balance.”

Such jobs “may be one of the best ways to prolong one’s career,” it said, since many workers want to gradually cut back later in their careers but employers may not be willing or able to accommodate that. The report did not specifically mention the federal government, but that is consistent with the “phased retirement” program, which remains little used even though it now has been in place for years.

In addition to those who already have achieved retirement financial security, nontraditional jobs can be valuable to those who need the income but who may not be able to continue working in their traditional jobs due to reasons such as the physical demands, health reasons or family obligations. “Nontraditional work may help underprepared workers in good health lengthen their careers and improve their retirement security,” it said.

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