Almost 20 percent of Americans aged 65 or older are now working, according to data released by the U.S. Bureau of Labor Statistics.
This record-breaking figure is the largest number of older people still employed since before the U.S. enacted Medicare. The large number of older workers is influenced by the sizable “baby boomer” generation, which is just now hitting retirement age. 10,000 of them turn 65 each day, and the number is expected to continue until 2029. When asked about their plans for retirement, a 2015 federal study found that 27 percent of Americans say they plan to “work as long as possible,” while another 12 percent said they do not plan to retire.
To put this in perspective, a decade ago 5 million senior citizens were still working; that number has now increased to 9 million, or almost one in five Americans aged 65 and older. What could be behind these surprising figures? Why are the largest amount of Americans in decades putting off retirement? One likely explanation may be the most straightforward, according to Bloomberg: they need the money.
“Three in five retirees surveyed by the Transamerica Center for Retirement Studies said making money or earning benefits was at least one reason they had retired later than they planned to. Almost half said financial problems were their main reason for working past 65. The financial crisis, and the tech bust before it, devastated many baby boomers’ retirement savings. That’s if they had any to begin with. Today, 60 percent of U.S. households have no money in a 401(k) or similar retirement account, and the benefits of 401(k)s are skewed toward the wealthiest Americans, a recent report by the Government Accountability Office found.”
— Christopher (@christopherk122) May 15, 2016
Slashing of traditional, steady pensions benefits could also be a reason many Americans are hesitant to retire. Even wealthier Americans may not get a stable monthly pension but 401(k) assets, and are more subject to the tender mercies of the free market. Many retirees also have anxiety about the state of the economy, which may encourage them to delay retirement and stay in the labor market.
Of course, other reasons may be more positive. For example: they may like their jobs and find fulfillment in them. Education is also a factor: people with college and graduate degrees also tend to stay in the working world than those with less education. About a third of 60- to 74-year-olds hold a college degree, and the number of Americans with a degree has tripled since 1985. With unemployment at its lowest since the beginning of the economic recession in 2008, employers may also want older, more experienced workers to stick around instead of replacing them. More educated and skilled workers are more valuable to employers, and there is still money to be made by retirement age, according to Bloomberg.
“In 1985, workers tended to earn the highest salaries of their careers in their 40s, the Center for Retirement Research study found. By 2010, those peak earning years had shifted from the 40s to the 50s. All age groups older than 50 earned more than they did 25 years earlier, with those in their late 60s making 30 percent more. Workers under 50 earned less than they used to.”
— MTC Federal CU (@MTCFCU) May 3, 2016
Another possible factor in Americans retiring later may be that, in general, the human race is living longer than ever. While the increase in average life expectancy affects the educated most of all, even the least-educated Americans have seen an increase in their average lifespans since 1979, and as a consequence have more viable working years than their parents did thirty or more years ago. The number of seniors in the workforce is unlikely to change, according to CBS News, who project “share of seniors in the workforce will most certainly continue to rise, with the Bureau of Labor Statistics projecting that almost 22 percent of the 65-and-older set will be working in 2024.”
Finally, it may just be that “the golden years” aren’t as a golden as we’re led to believe. A study published last month by the Employee Benefit Research Institute found that retirees that characterized their retirements as “very satisfying” dropped from 60.5 percent in 1998 to a mere 48.6 percent in 2012, while those who rated them “moderately satisfying” and “not at all satisfying” increased from 31.7 percent to 40.9 percent and from 7.9 percent to 10.5 percent, respectively.
Income inequality is a large factor in determining how likely senior workers are to retire, CBS reported, quoting a study by the AP-NORC Center.
“While there is evidence that older workers have some autonomy in the choices they make about late career work, we also see evidence that many feel compelled to work longer due to financial concerns and anxiety about retirement.”
The study found that lower-income workers were more likely to work until they died, with one-third of those earning less than $50,000 saying they would never retire. Only 20 percent of those earning $100,000 a year or more said the same.
[Photo by Christopher Furlong/Getty Images]