Americans Are Retiring Later Than Ever — Here's Why

Health & Lifestyle
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Alexandra Lozovschi

Senior citizens are putting off retirement and choosing to remain in the workforce for a variety of reasons. According to a 2017 statistic from the U.S. Bureau of Labor Statistics (BLS), people ages 65 to 74, as well as 75 and older were anticipated to have the "fastest" labor force participation rate during the 2014-2024 decade.

"By 2024, BLS projects that the labor force will grow to about 164 million people. That number includes about 41 million people who will be ages 55 and older — of whom about 13 million are expected to be ages 65 and older," showed the report, delving into some of the later-in-life career options for Americans who are reluctant to retire.

Turning Their Backs On Retirement

The trend was also discussed in a 2019 report from the NPR stating 1 in 4 adults age 65 and older was working or actively looking for work at the time.

"That number is expected to increase, making it the fastest-growing group of workers in the country."

But while the BLS indicated that Americans are retiring later than ever because "they are healthier and have a longer life expectancy than previous generations" and "are better educated, which increases their likelihood of staying in the labor force," the NPR painted a different picture of the situation.

They Need The Money

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According to the NPR, the oldest segments of the population were postponing retirement because they simply needed the money.

"Few private sector workers now have traditional, defined benefit pensions, where you're paid a fixed stipend for life depending on your salary and years of service," stated the report, highlighting that most retirement funds now are 401(k) types.

A 401(k) is a retirement savings plan sponsored by the employer, which allows workers to save and invest a piece of their paycheck before taxes are taken out, notes The Wall Street Journal.

Such systems have their advantages as well as serious drawbacks, the NPR explained.

"During the worst of the last recession, 401(k) accounts lost almost one-third of their value."

They Haven't Saved Enough

Another reason why Americans turn their backs on retirement in order to continue making money is insufficient savings. According to the BLS projections, the increase in labor force participation rate for senior citizens was "being fueled by the aging baby-boom generation."

"By 2024, baby boomers will have reached ages 60 to 78. And some of them are expected to continue working even after they qualify for Social Security retirement benefits," stated the BLS.

This is the precise generation with "median savings of a little over $150,000 to get through what could be a 30-year retirement," per the 2019 NPR report.

They Have No Retirement Plan & Rely On Social Security

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Both the BLS and the NPR agreed on one issue: a great number of older Americans don't benefit from a retirement plan and are forced to rely on Social Security for income, creating a need to continue working at least part-time.

"Roughly half of private sector employers offer no retirement plans at all. That's one of the reasons about a quarter of retirees get 90 percent or more of their income from Social Security," said NPR.

They're Still Supporting Their Adult Children

Lastly, many senior citizens aren't retiring because they're still financially supporting their adult children. A 2019 survey showed that 50 percent of older Americans were in this situation, with respondents saying they were "sacrificing their own retirement savings" in order to pay their adult children's bills, such as car payments, insurance, housing costs, health insurance, and so on.