It's Becoming the Norm for Older Employees to Keep Working, But Why?

It's Becoming the Norm for Older Employees to Keep Working, But Why?

With the standard age of retirement going up each year, along with standard life expectancy, many assume that people are simply working longer because they're living longer. This may be true for some people. However, the truth is that most workers at or past retirement age are working because of a rapidly changing system making it more difficult than ever to make ends meet.

A Growing Economy

You may have heard the commonly cited statistic that two million jobs were created over the past twelve months and taken. What you might not know is that more than a third of these jobs were taken by someone at least 65 years old. While many pictured this statistic as something allowing people just entering a field to rise up, many of these jobs went to older people.

There may be an argument that the job market is booming enough that older people can find jobs more easily. However, over the past few years, a clear trend has emerged: the ratio of jobs claimed by people under 65 to jobs claimed by people over 65 has been flattening out.

How Many Seniors Are Still Working?

A record-high number of people over the age of 65 are still on the workforce. As of last month, the tally was just over one quarter of Seniors still remaining on the job.

A More Educated Workforce

A possible explanation for the influx of Seniors into the job market (and this influx steadily increasing by the year since 2010) is that people are getting higher levels of education now than they ever have before. This education may allow some people to stay on the job longer, since white collar jobs are generally more Senior-friendly than other jobs. This explanation could explain this phenomenon in part, since those who are better-educated generally have higher life expectancy. However, there's also a darker side.

A Poorer Workforce

As we mentioned earlier, it's likely that many Seniors stay in the workforce out of pure necessity. While companies used to offer pensions that effectively guaranteed a solid retirement if someone put in the right amount of work, this is no longer the case.

Supportive Services, an organization that's designed to assist people with finding jobs, has reported a sharp uptick in the volume of requests they've received from Seniors. Anita Wolniewicz, a program director there, commented on the reasons older people are coming back into the labor market. She says that it's rare to have Seniors simply get bored and ask for a new job. It's mostly due to lay-offs and financial necessity that many Seniors continue to work.

Those at the largest disadvantage are Seniors who were trained in a traditionally "blue collar" trade and now have physical limitations that prevent them from executing it. Many of these people have faced lay-offs after decades of doing the same thing, needing to urgently retrain in order to be able to find suitable employment.

What Are the Future Implications of This New Norm?

The normalization of people working full-time into their late-60s, 70s, and even 80s is likely to have some fallout. For example, the health outcomes for people of retirement age who cannot retire are significantly worse than outcomes for people who can. There's a strong suggestion that these people are not working into their last years because they feel like it.

One devastating economic effect this is likely to have is that it leaves Seniors reliant on a very turbulent market. While the economy is decent enough right now to have these positions, these jobs are many Seniors' lifelines. Since the workers are older and the trades tend to be easily learned, employers have little incentive to keep them on-board. Additionally, some employers will inevitably fold, leaving Seniors who may rely on this as their main source of income in the dust.

Is There Any Good Solution?

Unfortunately, for Seniors currently stuck working, there aren't too many readily available solutions. For those of "prime working age", or those between 16 and 64, it's more important than ever to save as much money as possible. If your workplace offers retirement plans, it's time to stop ignoring them. If not, you should seek out your own IRA or similar plan to ensure you can retire when the time is right.

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