Can changing jobs help you prepare for retirement?

Senior woman at work in her office

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There’s evidence that a change of job in late career—in your 50s—may extend your career. However, there are risks involved.

Research from the Center for Retirement Research, Boston College, US, has found that there has been an increase in employees making a career change toward the end of their working life. This could be by choice—searching for a better job; or involuntary—job loss.

The goal of the study was to test who would be most likely to stay in the workforce until the age of 65. Would it be those who voluntarily changed jobs in their 50s or those who chose to remain with their current employer?

The researchers discovered that those who lose their jobs generally have difficulty finding further employment; earn significantly less in a new job; and are twice as likely to retire at any age, and before 65.

On the other hand, those who change jobs voluntarily, ‘generally report greater job satisfaction, albeit with a decrease in compensation. Since workers presumably change employers to improve their well-being, moving to a job that they consider better could extend their careers,’ says the report.

Wait a moment . . .

There’s a problem with taking these statistics at face value because there are other factors involved. It could be that those who switch jobs can work longer simply because they have better health, not because they changed jobs.

Or it could be that they worked longer because they had mortgages they wanted to pay off, or felt the need to save more for retirement, or some other reason.

However, even after taking these factors into account, the job changers still worked longer. In academic-speak, those who voluntarily change jobs have a ‘statistically significant 9.1-percentage-point increase in the likelihood of remaining in the labour force until age 65’.

Some warnings

Before considering a change of job to increase your working life, you need to consider the risks. Job-changing could reduce job security because long-term workers tend to have better protection if the company needs to shed jobs. Changing jobs could increase your risk of layoff.

You’re also risking the possibility of discovering that your new job doesn’t fit you. And, as an older employee, it may be difficult to move to a better job.

You may believe it worth the risk, but remember that ‘statistically significant’ doesn’t mean it works for everyone. Think carefully through any change like this.

Bruce Manners: the author of Retirement Ready?, Refusing to Retire, and founder of

Category: Working

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