More Americans Are Working Past Age 65
Older U.S. residents were more likely to be working or looking for work in 2003 than they were in 2002.
When Sara Rix, a researcher at the AARP Public Policy Institute, Washington, analyzed new figures from the federal Bureau of Labor Statistics, she found that the participation rate for workers who were at least 55 increased to 35.7% in 2003, from 34.5% in 2002.
The growth rate was faster for workers ages 65 and over, Rix writes in a report on the analysis.
The participation rate increased to 27.4%, from 26.1%, for workers ages 65 to 69; to 14.6%, from 14%, for workers ages 70 to 74; and to 5.8%, from 5.1%, for workers ages 75 and over.
That compares with a decline to 78.2%, from 78.7%, for workers ages 55 and under.
For decades, Social Security, rich private pension benefits and skyrocketing retirement account asset totals pushed the average retirement downward, even as medical advances increased the average Americans years of healthy life.
Financial advisors once assumed that many clients would retire in their early 60s.
But many workers in their 40s and 50s already say they plan to work past age 65, and “financial interest in remaining active and engaged will likely foster further increases in the labor force participation rate of the 55-plus population,” Rix writes.
In some cases, financial planning problems could have a direct effect on older Americans decision to go to work or stay home.
A November 2003 AARP survey found that 20% of all retirees over age 54 and 5% of retirees over age 64 were thinking about returning to work because of the recent performance of their investments.
Some economists are predicting that the Social Security trust fund and private retirement plans will be stronger than expected because the average retirement age will increase. Simply postponing retirement 2 years past the originally scheduled date can lead to a big increase in a workers retirement income, according to a recent study by researchers at Hewitt Associates Inc., Lincolnshire, Ill.
But Rix warns that a big expansion in the percentage of older Americans who work will require a change in the attitudes of employers as well as a change in older Americans interest in working.
“Age continues to work against many older men and women in the labor force, as evidenced by the length of time it takes so many who have become unemployed to find work,” Rix writes.
The average duration of unemployment was 18.4 weeks for job seekers under age 55 and 25.5 weeks for workers over age 54, Rix writes.
Reproduced from National Underwriter Edition, July 16, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.