The New Retirement

I’ve been saying for some time that retirement is changing. See my book, The New Rules of Retirement. One change I’ve expected is for people to work longer. Earlier and earlier retirements were a trend until the early 2000s. It makes sense for people to work longer because they’re living longer and staying healthier and active longer. They also need to earn more money to fund those extra years. If the trend to early retirement continued, it wouldn’t be long before many people lived longer in retirement than their working careers.

Whether it’s those reasons or the economic downturn, more people over age 55 are working than ever, according to the Bureau of Labor Statistics. According to the story in The Washington Post, many of those who continue to work are doing so because they need the money. The lack of defined benefit pension plans and low savings means they need to keep working to sustain their lifestyles. A downside to this is that fewer younger people are working. They aren’t acquiring valuable job skills, work history, and the start of their retirement savings.

An August survey by the AARP Public Policy Institute of people older than 50 showed that 57 percent reported that they were less confident than before the recession that they will have enough money to live comfortably throughout their retirement years. Similarly, 61 percent of the respondents said that their savings had fallen since the recession.

To the surprise of some experts, the incentives for older people to work have been strong enough to overwhelm the effects of the recession, which has slashed the ranks of the employed among other generations.

The number of people older than 55 who are working has actually risen by 3.1 million, or 12 percent, since the beginning of the recession, according to the latest figures from the Bureau of Labor Statistics. The phenomenon extends even to people 75 years and older; there are more of them working today than before the recession, too.

By contrast, the number of people between the ages of 25 and 54 who are working has shrunk by 6.5 million, for a drop of 6.5 percent.