As Americans age, demographic change is also affecting the workforce, with a new Pew Research Center analysis showing that 1 in 5 people over 65 are still working, a double jump from the 1980s.
That translates into 11 million senior citizens remaining in the workforce, which by a large number is four times the number in the mid-1980s, Pew said. And it’s a trend expected to continue, with Americans over 65 expected to be one of the few demographic groups with increasing labor force participation over the next decade, according to to the Bureau of Labor Statistics.
Aside from providing a boost to the economy, older Americans who continue to work are also likely to help their own financial situations. That’s because they’re able to save more money and delay retirement, which requires people to draw down their savings, noted Pew senior researcher Richard Fry. But there may also be a flip side to the trend, as it may reflect the end of traditional pensions and the inadequacy of some workers’ retirement savings.
“It’s not necessarily a good thing” that more seniors are working, Fry told CBS MoneyWatch. “Part of this is that they choose to continue working, but some of them may have to work even if they don’t want to because of the precarious state of our pension system.”
The bottom line, economically speaking, is that seniors earn a greater share of wages paid by American employers, tripling from 2% in 1987 to 7% now, Pew noted.
Older – but happier?
That said, older workers tend to be more satisfied with their jobs than Americans under 65, Pew found. The level of work stress is also lower among senior citizens who remain in the workforce.
Of course, it could be that older Americans who worked in jobs they disliked or found stressful chose to retire at age 65, leaving a subset of older workers who are generally happier in their workplaces and reluctant with retiring, which is something Pew did. do not analyze.
But there were some commonalities among 65+ workers that provide a glimpse into their motivations. First, older workers are more than twice as likely as workers 64 and under to be self-employed, at 23% versus 10%, which could signal that they are small business owners, freelancers, or the like.
They are also more educated than in past decades, Fry said. It jibes withIt has been found that older Americans who continue to work are more likely to be professionals in fields such as education or management or in the arts.
There are a few other reasons why the share of older workers is increasing, Fry noted. Firstly, there have been more jobs age friendly, to provide seniors with work that is not as physically demanding as in previous decades. Seniors are also healthier today than they were in previous generations, he added. And finally, the pension system is not what it was in the 80s, Fry said.
“Another thing that has changed is how we do pensions,” Fry said. “We’ve moved over time from the old pension system to now that most Americans don’t have a traditional old-fashioned pension — they have a 401(k) or 403(b) — and many old pensions forced the employee to retire at 62 .”
He added: “There are no incentives to retire early, so it has removed the incentive” to leave the workforce.