The Changing Landscape
The Pew report reveals that the share of older Americans who are working has doubled over the past 35 years. Richard Fry, senior researcher at Pew Research Center and lead author of the study, noted that this trend is not surprising given the aging nature of our society. He emphasized that it’s not only the increase in older adults in the workforce that is notable, but also the larger share of them who are working.
Individual Stories Reflecting the Trend
Fred Lilikes, a 65-year-old retiree who lives outside Phoenix, exemplifies the changing perception of retirement. Lilikes retired in June 2020 but quickly found another full-time position in information technology. He admitted, “I’m the kind of person who has to always be doing something.”
According to the Pew analysis, 19 percent of Americans aged 65 and over were employed this year, compared to only 11 percent in 1987. This increase can be attributed to several factors, including improved overall health and a decrease in disability rates among older Americans. Changes in retirement benefits and social security eligibility have also influenced the decision to continue working.
Complex Factors Shaping Retirement Decisions
The elevation of the full Social Security benefits access age from 65 to 67 has had a direct impact on Americans’ retirement plans. As a result, individuals retiring now must consider additional factors such as the health of the economy and the stock market when deciding on the timing of their labor force exit. Joanne Song McLaughlin, a labor economist at the University of Buffalo, explains that the economic cycle now plays a pivotal role in determining one’s retirement savings.
To facilitate the transition from work to retirement, many individuals are taking on “bridge jobs” or part-time work, sometimes even in completely different fields. Joseph Quinn, an economics professor at Boston College, emphasized that the traditional retirement model of working in one place for 40 years and then never working again is no longer the norm for most people.
Fulfilling Lives Post-Retirement
This new reality offers individuals the opportunity to pursue fulfilling activities after retirement. Ruby Jones, a retired teacher, found joy in being a substitute teacher at a private school where she teaches eighth-grade English. She appreciates the positive aspects of teaching without the downsides. In her spare time, Jones engages in activities such as playing mah-jongg and pickleball and volunteers with Meals on Wheels.
Economists note that higher employment rates, increased stock portfolios, and rising home values have significantly contributed to the wealth of older Americans. The average net worth of seniors aged 65 to 74 increased by 27 percent between 2019 and 2022, while those aged 75 and above experienced a staggering 43 percent increase. This compares to a 23 percent rise in average wealth for all families, according to the Federal Reserve’s Survey of Consumer Finances.
Consequently, adults in their 60s, 70s, and 80s are increasingly purchasing homes and indulging in travel, dining out, and cruises, showcasing their enhanced spending power.
A Positive Impact on the Economy
Joseph Quinn emphasizes that the presence of older individuals in the labor force is beneficial for the U.S. economy as a whole. Their continued contribution results in the production of more goods and services, ultimately fueling the country’s growth.
However, workers’ motivations for continued employment in their later years can vary widely. While those on the lower end of the income scale often have to continue working due to financial constraints, wealthier individuals often choose to do so to maintain an active and engaging lifestyle. It’s important to acknowledge that there is also a subset of individuals in the labor force during their later years who would prefer not to be.
In conclusion, the expanding labor force participation of Americans aged 65 and over reflects a shifting paradigm of retirement. This trend is driven by a combination of economic factors, improved health, and a desire for ongoing engagement and fulfillment.