Retirement used to be viewed as a ‘light at the end of the tunnel’ but today, it is increasingly being postponed – and not just for financial reasons. According to Bloomberg, U.S. seniors are employed at the highest rate in 55 years. On the one hand, this choice is often a matter of necessity. On the other, remaining in the workforce can have important health benefits as a result of an improved financial situation and greater opportunities for social interaction.
The Effect of the Great Recession
The recession that swept across the world in the late 2000s blew a big hole in the savings of many seniors, which means that many decide to make up for lost funds by working a few extra years. A report from the Center for Retirement Research at Boston College found that around 50% of American households may not have enough money for retirement if they stop working at 66. Staying employed for longer can be beneficial, because it delays and therefore increases social security benefits. For instance, those who would be entitled to $1,000 per month if they retired at age 62 would receive over $1,700 if they stayed in the workforce for 10 more years. Studies show that older Americans have seen significant increases in financial inequality over the past three decades. Those who are not members of the economic and educational elite can therefore buffer their financial situation by working for a few more years.
Working Longer Can Lead to a Longer Life
A recent study carried out at Oregon State University found that working past 65 can lead to a longer life, while retiring early can be a risk factor for an earlier death. The researchers found that healthy adults who retired one year after they turned 65 had an 11% lower risk of death from all causes, even when taking into account lifestyle and health differences. The authors of the study believe that the economic and social benefits of work impact seniors’ lives significantly.
Use It or Lose It
Gabriel Heller-Sahlgren, director of research at the Center for the Study of Market Reform of Education, notes that although in the beginning, retirement can seem like a holiday for many, after the initial joyful phase has passed, seniors can feel the need to “use it or lose it.” Heller-Sahlgren notes that the sense of engagement and purpose, coupled with the connections one makes while active in the workforce, can be positive. Although policy makers should not force people to work when they are older, it should be easier for older adults to find paid employment.
Part-time work, flexible hours, and training in technology and other pertinent subjects can help seniors stay at the top of their game. This is key considering sinking savings rate, rising personal debt, and a shift away from employer-provided pensions. From a financial and health perspective, working longer seems to make sense; of course, doing so should always be a matter of individual choice.