A warning for retired baby boomers looking for work

For many baby boomers, working in their retirement years is a key part of their "retirement plan." Whether that's as feasible as many think is open to debate, and a recently published study is providing more evidence that it may not be so easy.

Researchers at the Boston College Center for Retirement Research (CRR) focused on so-called middle-skill employment. That category, which accounts for 41.1 percent of all jobs, includes professional sales, production and repair, operators and fabricators, and skilled administration, protective and personal services. The study found employment in such jobs for both boomers and younger workers has declined in recent years.

This presents challenges for many boomers who plan to continue working in their retirement years because middle-skill jobs are still the largest group, even considering their current decline.

The CRR study classified various jobs by the complexity of required skills, including the time needed to train for the job. During the past three recessions, nearly all the weakness in employment occurred in middle-skill jobs, primarily due to technology and automation replacing many routine tasks these jobs entail.

Conversely, more specialized, high-skill jobs such as engineering and low-skill jobs such as custodial services still need to be done by people, so employment in these jobs grew steadily throughout the business cycles.

According to the CRR study, low-skill jobs account for 23.5 percent of all jobs and include jobs such as sales, administration, and protective services with minimal requirements; personal care and services; food prep; agriculture; and laborers.

High-skill positions make up 35.4 percent of all jobs and include managers and executives; professionals such as doctors, accountants, and engineers; and technicians such as those in health care.

The CRR study found that from 1990 to 2013, employment in middle-skill jobs decreased by 11.6 percent, with both older workers (age 50 to 61) and prime-age workers (age 35 to 49) experiencing about the same magnitude of decline. During this period, employment in low-skill jobs increased by 5.2 percent and in high-skill jobs by 6.4 percent. Older workers experienced more growth in high-skill jobs but less growth in low-skill jobs.

Middle-skill workers who lose their jobs face some equally problematic options: competing for the fewer remaining middle-skill jobs, raising their skill level appreciably or moving down the skill ladder. Prime-age workers who lose their job really have no choice but to try to find work at any skill level, whereas some older workers can opt to retire if they don't find new work.

The rate of transition from middle-skill jobs into both high-skill and low-skill jobs had been increasing until the Great Recession, but afterwards such transitions became more difficult. The CRR study concluded, however, that most older workers seem to have eventually landed on their feet after the Great Recession, even with the decline in middle-skill jobs. They retained their current job, gained skills to move up to a new position or took a lower-skill job.

The study found something interesting about of job transitions: For older workers who moved from middle-skill to low-skill jobs, only half occurred after an involuntary job loss; many were the result of moving from full-time to part-time work. This implies that these transitions may be a preference among older workers for jobs with lower demands on their time and skills.

Many of these transitions also occurred at the same employer, indicating that employers may be willing to accommodate their aging workers' needs and preferences.

The study highlights the importance of "safety net" programs to help displaced workers of all ages, such as unemployment insurance, Social Security Disability Insurance, Supplemental Security Income, Medicaid, cash and in-kind assistance, and job-training programs.

The takeaways for older workers are clear: If working is part of your retirement plan, be keenly aware of your job prospects. If you're in a middle-skill job, look for training and experience that might help you upgrade your skills and hang on to your job. Alternatively, develop sufficient financial resources so you can take a lower-paying, low-skill job. Or be prepared to significantly reduce your living expenses.

That means: Be wise and plan ahead.