Is nontraditional work at older ages associated with better retirement security?

Holding nontraditional jobs – those that provide neither health insurance nor retirement
benefits – at younger ages likely hurts retirement security relative to traditional jobs. But
nontraditional work might be helpful to those looking to extend their careers for financial
reasons. This study uses the Health and Retirement Study to determine the extent to which
workers in traditional jobs with less retirement security when they reach the cusp of retirement
are more likely to move to nontraditional jobs in their mid- to late-60s than those who are more
secure, all else equal. It then examines whether working in nontraditional jobs at older ages
helps to improve their retirement security by ages 67-68. The results indicate that workers in
traditional jobs who reach age 62 with less projected retirement income, relative to their preretirement standard of living, are no more likely to engage in nontraditional work after age 62
than those who are better prepared. In fact, some evidence suggests that those who transition to
nontraditional work have greater retirement wealth, especially business income, than those who
stay in traditional work or who opt not to keep working. Among those workers who are at risk of
not maintaining their pre-retirement income level in retirement, however, nontraditional work
appears to move them closer to retirement security. These results suggest that nontraditional
work may help underprepared workers in good health lengthen their careers and improve their
retirement security.