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Surprising Reasons Boomers Are Working Longer

Delaying retirement is about much more than earning extra money

By Martha Deevy | From Stanford Center on Longevity | March 14, 2013
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Martha Deevy is a Senior Research Scholar and Director of the Financial Security Division of the Stanford Center on Longevity.

The trend is clear: Many older Americans are starting to delay retirement and work longer than in the past. According to the U.S. Bureau of Labor Statistics, 17.4 percent of people 65 and older were in the labor force in 2010, up from 12.9 percent in 2000. By 2020, the agency predicts, 22.6 percent of Americans over 65 will be working.

Why Americans Are Working Longer

The reasons behind this trend, however, are less obvious. Who is working longer — and why?

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At first glance, the answer might appear simple: Everyone is staying on the job out of financial need. After all, a recent study by Pentegra Retirement Services found that nearly one-third of adults who would like to retire doubt their ability to ever do so.

And the troubling reality is that many people have not saved enough for retirement. Fewer than 1 in 5 older Americans over 50 say they have “engaged in successful retirement planning,” according to a study from retirement analysts Annamaria Lusardi and Olivia S. Mitchell. The 2012 Retirement Conference Survey from the Employee Benefit Research Institute says more than half of U.S. workers have savings of less than $25,000 (excluding their primary residence and pensions).

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It's Not Just About The Money

But research suggests the decision to keep working may not be exclusively about financial need.

Well-educated workers are more likely to delay retirement than less-educated workers and labor force participation rates have risen primarily for older Americans who are college-educated and in the highest income groups.

While some of these people are undoubtedly working for financial reasons, for others the decision to continue seems to be voluntary.

Why might older Americans want to work longer?

There are many social, emotional and psychological benefits that come from work. Although these benefits have always existed, they are more relevant to today’s senior workers. As people live longer and stay healthier at older ages, many are now able to choose when to retire. In addition, as the number of boomers living in the suburbs increases, many are turning to work to find the social connection that small, tight-knit communities previously provided.  

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5 Motivations for Working Longer

The following five factors appear to be especially attractive to older Americans considering working longer rather than retiring:

1. Working helps avoid social isolation and keeps them connected to their communities. This is particularly beneficial for people who live far from their friends and families and would otherwise spend a lot of time alone.

2. Working gives meaning to their lives. Staying employed gives seniors the opportunity to make and achieve goals, receive recognition for their efforts and work as part of a team.

3. Working allows them to use their knowledge and experience. Many older people have spent years developing their talents and honing their skills, making them well-positioned to meet the needs of employers.

4. Working helps older people stay physically and mentally healthy. Although it’s true that healthy people are more likely to work longer, working longer also can lead to better health. A study from the Center for Retirement Research at Boston College found that working longer actually reduces a person’s chances of reporting fair or poor health. This may be because working gives older people a reason to take care of themselves.

5. Working is a source of pleasure. One recent study noted that 89 percent of older workers said they enjoyed their jobs. Understandably, they do not want to give up this source of contentment.

Older adults who are thinking about retirement might do well to consider these non-financial benefits before signing off the job.

Of course, not all positions lend themselves to working longer. Employees with physically demanding jobs, for example, might find it difficult to continue doing them into their 60s, 70s or 80s.

What Employers Can Do

Given the numerous benefits of working longer, it’s time for employers and policymakers to look at ways of providing opportunities for people to stay on the job. 

Some employers have already begun to implement such changes through flexible hours; “snowbird” arrangements, which let employees work in warm climates in the winter and other locations in the summer; mentoring programs; job rotation to minimize fatigue in physically demanding jobs; and horizontal (rather than vertical) career paths.

Offerings like these will help growing numbers of Americans reap the financial and social benefits of working longer.
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