How Job Hopping Can Hurt Your Retirement

The Employee Benefits Research Institute has some good news and bad news conclusions about Americans’ job tenure: overall, it’s not getting any shorter, but the typical worker doesn’t have much job security and has little chance of retiring with a “gold-watch” benefit like health insurance.

EBRI found that median job tenure was 5.1 years in 2008, compared to 5 years in 1983. While many people believe the typical worker in previous generations stayed with one employer for an entire career, that probably was never very common, EBRI found. Clearly, even the lifetime jobs that did exist at companies like Ford (Stock Quote: F) and General Motors (Stock Quote: MTLQQ) are a thing of the past.

For men, whether hourly or salaried, median years on the job dropped from 5.9 to 5.2 over the 25 years studied, while they rose for women, from 4.2 to 4.9.

Although the overall figures do not show dramatic changes, at least not as big as many people might have thought, breakdowns reveal some shifts, not all of them welcome.

“Fewer employers are offering health benefits to future retirees; when those benefits are offered, eligibility criteria are becoming harder to meet; and employer subsidies are disappearing,” the EBRI report states. “In 2008, 26 percent of 65-69-year-olds had retiree health benefits, down from 32 percent in 1994, and the numbers are lower for older retirees.”

Rising health care costs get much of the blame. Also, a change in accounting law in 1990 discouraged employers from offering health coverage to retirees by requiring that those obligations be booked as liabilities, EBRI said.

As time goes by, more people continue working past what was once considered retirement age. “In 1995, 59% of individuals ages 65-69 considered themselves retired, and that fell to 53.6% in 2008,” the report said, “while those saying they were working increased from 28% in 1995 to 35% in 2008.”