Why Too Many Americans Are Working During Retirement These Days
Retirement used to be a time for relaxation, for spending time with your grandchildren, or for pursuing a hobby or pet project — but that’s not necessarily the case anymore. America’s elderly population is as active as ever, doing more things but also working longer. In fact, as The Atlantic reports, older Americans are heading back to work in droves.
A quick look at some data from the Bureau of Labor Statistics shows a rapid increase in the number of workers older than 65 over the past several decades. While the share of older workers has increased, the overall number of people making up the U.S. labor force has actually dwindled. The current labor force participation rate is hovering at right around 63%, where it has been for quite some time. But what’s interesting is that while the amount of growth in the labor force for all age groups under 55 is expected to top no more than 0.5%, the labor pool for workers over 55 should increase by as much as 2.6% by 2022.
Not only that, but nearly a quarter of all residents over 65 could be working by that time as well. It’s a trend that really flies in the face of how we traditionally think of the aging process.
So, what gives?
One big reason, and probably the most obvious as The Atlantic article points out, is the fact that the government ended mandatory retirement at the age of 65 back in 1986. Now, people who want to continue working after they hit the magic retirement age can do so and continue to earn more well into their golden years. One reason that this is particularly important is that as we’ve learned recently, many older Americans are frighteningly unprepared for retirement.
With the recent economic issues facing the country, a lot of older workers don’t have the choice to retire. They have to keep working.
With the advent of the Great Recession — along with the aging and retirement of the Baby Boomer generation — America’s social safety net is in a bit of trouble. We’ve heard for years that Social Security and Medicaid were bound to run into trouble, and now that a significant portion of the American population is getting older, there’s reason to be concerned — especially since many of them had their savings and estates hit hard by the economy.
That’s also why so many people have decided to remain in, or return to, the workforce. Aside from the increased strain on public resources, is that necessarily a bad thing?
In some ways, it can be a net negative. For one, the fact that so many people are willing to keep working well after their prime earning years does say something about the state of the economy. It clues us in to the fact that there are a lot of aging Americans who clearly don’t feel confident that they can afford retirement, and as work opportunities shrink due to automation or tough economic conditions, it’s possible those individuals will end up straining public safety nets even more.
Of course, what could really be causing this bulge in older workers is the simple fact that there is a spike in the population that is finally hitting retirement age. People are living longer, healthier lives than ever before, and a lot of them simply might want to keep working. Couple that with the fact that turbulent economic situations over the past several years, and the fact that an awful lot of baby boomers haven’t saved enough, and you might expect to see a surge in numbers.
But to see the ranks of older workers triple? That seems like a lot, and means that there could be more to it than population numbers. If the economy improves, maybe we’ll get a clearer picture.
Follow Sam on Twitter @Sliceofginger