Should We All Just Work Longer?

Working longer is an effective way to boost prospects for a secure retirement, but is it realistic for workers across the socioeconomic spectrum?

The Center for Retirement Research at Boston College released a new brief by Geoffrey Sanzenbacher and Steven Sass titled “Is Working Longer a Good Prescription for All?”

“Working longer is one of the most effective ways to improve prospects for a secure retirement. It increases monthly Social Security benefits, allows more time for saving in 401(k)s, and shortens the period of retirement that assets need to cover,” the report states. “Working longer is also widely seen as a reasonable response, because people are living longer and healthier lives.”

The question is whether this prescription is realistic for individuals across the socioeconomic spectrum.

The Center examined this question by looking at the findings of a series of studies and using education as the measure of socioeconomic status.

This series of studies indicates that while it is fair to expect workers of lower socioeconomic status to work longer given rising life expectancies, it is also more challenging for them to do so than for higher-status workers.

The biggest argument for working longer is that people are living longer.

“It seems reasonable for them to work a bit longer, ultimately maintaining the same share of life spent in retirement as previous generations,” the report states.

However, as the brief notes, people are not living longer equally. Less educated workers have seen the smallest gains.

The brief looks at how longevity gains differ by education, and finds that life expectancy at age 65 increased by 4 years for men in the lowest education quartile compared to 6.1 years for those in the highest quartile, a gap of 2.1 years. The gap between the highest and lowest quartiles for women was 1.8 years.

The analysis then calculates a reasonable target for how long people could work.