Working consistently through one’s fifties and early sixties is key to attaining retirement security. However, workers also need access to retirement plans – so they can continue to accumulate resources – and health insurance – so they can avoid withdrawing assets in the event of a health shock. Workers without access to these benefits will likely struggle as they approach retirement, both financially and perhaps emotionally, as they deal with the stress of being unprepared. Yet, despite the fact that a large literature focuses on nontraditional jobs that often lack these benefits, it is unclear how older workers use these jobs and what the consequences are. If some older workers use nontraditional work for much of their late careers, then they likely will end up worse off. If, instead, older workers use nontraditional jobs only temporarily, then it is unlikely that their situation will substantially change.

This paper uses the Health and Retirement Study to identify nontraditional jobs and relies on sequence analysis to explore how workers ages 50-62 use them. The results suggest that the majority of nontraditional jobs are used by workers consistently, and that fewer workers use these jobs briefly or as a bridge to retirement. In the end, workers consistently in nontraditional jobs end up with less retirement income than other workers and are more likely to be depressed, even controlling for their financial situation and depression prior to age 50. Given this situation, policymakers may want to consider ways to expand benefits to workers in these jobs to improve their well-being in retirement.

Center for Retirement Research at Boston College