Of Retirement Age, but Remaining in the Work Force

Brad Swonetz for The New York Times
Now, adults 65 to 69 are more likely to be working than teenagers, except during summer.
Brad Swonetz for The New York Times
Brad Swonetz for The New York Times

By Paula Span.  Originally published in the New York Times.  August 1, 2016.

Students will soon return to Manse Elementary School in Pahrump, Nev., so Judith Lister has been getting her kindergarten classroom ready, filling the bookshelves and arranging floor pillows for read-aloud time. She’s about to tackle the bulletin boards.

“I’m looking forward to it, but you have to be physically active,” Ms. Lister said. “Getting up off the floor is sometimes a trick.” She has found that a rolling adjustable stool helps.

At 71, Ms. Lister isn’t ready to retire. It’s an increasingly popular decision: Older people are staying in the work force longer.

A recent Pew Research Center analysis of federal employment data lays out the numbers. In May 2000, 12.8 percent of those older than 65 held a job. By this May, the number had climbed substantially, to 18.8 percent.

“This is not a blip,” said Drew DeSilver, a senior writer and the author of the report. After a longtime trend toward early retirement reversed during the 1980s, seniors’ employment has been rising steadily. (The Pew numbers don’t include those seeking jobs, just people who have them.)

Though the Great Recession caused a dip, it took a greater toll on younger workers. Now, adults 65 to 69 are more likely to be working than teenagers, except during summer.

The trend holds across several higher-age brackets, too. “It’s not just people waiting until Social Security kicks in and then dropping out,” Mr. DeSilver said.

Over 16 years, employment rose not only among 65- to 69-year olds (close to a third now work), but also among those 70 to 74 (about a fifth). In the 75-plus population, the proportion still working increased to 8.4 percent from 5.4 percent.

Moreover, Mr. DeSilver found, older workers are increasingly less likely to be part-timers. Nearly two-thirds of workers older than 65 hold full-time jobs, defined by the Bureau of Labor Statistics as requiring at least 35 hours a week.

Economists point to a long list of reasons, a complex mix of pushes and pulls.

Retirement policies have shifted: Fewer employees have fixed pensions, which tend to move people into retirement because at some point, they’ve earned maximum benefits and more years of work don’t bring more income.

“In contrast, there’s no such age with 401(k)’s,” said Alicia Munnell, the director of the Center for Retirement Research at Boston College. “People are nervous about that. They want their pile to grow, so they stay in the work force longer.” An increase in the Social Security full retirement age has had some effect, too.

We’re also working longer because we can. True, health crises can strike at any point, but lengthening life spans and improved health, at least among higher-income seniors, have contributed to extended careers.

“People who have higher education levels work longer,” Dr. Munnell said. “They have nicer jobs that are more interesting and less physically demanding.”

Older workers are more apt than others to work in management and sales, the Pew report found, and less likely to work in construction or food preparation and service.

Economists applaud this graying work force. “Every additional year you work, and you don’t draw down your savings, is an asset,” said Debra Whitman, the chief public policy officer at AARP. Waiting until later ages to claim Social Security — as seniors increasingly do — might help keep the system solvent, and the higher monthly checks may keep households solvent, too.

(AARP calculates that a 66-year-old entitled to a $1,500 monthly benefit at her full retirement age would instead be receiving only $1,125 — for the rest of her life — if she opted for early retirement at 62. If she can delay claiming benefits until she’s 70, though few retirees wait that long, her lifelong monthly income would grow to $1,980.)

What’s less clear is how long this trend toward extended work lives will continue. The policy incentives and disincentives I’ve mentioned have already kicked in. Dr. Munnell (she’s 73, by the way) fears the rise in later-life employment will flatten out.

Then there’s the troubling fact that many older people have no choice; they hold onto their jobs not because they cherish them, but because they lack alternative income.

Social Security alone doesn’t provide economic stability for former workers. Yet only about half the private sector work force has an I.R.A. or 401(k), AARP reports. “It’s shocking how high a percentage of people at retirement have nothing saved,” Dr. Whitman said.

As with other aspects of aging, including longevity itself, stark socioeconomic differences emerge. They can make employment at older ages either optional or crucial.

AARP reported in 2014 that among employees without a high school diploma, three-quarters worked for companies that didn’t offer retirement plans, compared with only 35 percent of those with bachelor’s degrees. (Small businesses are particularly unlikely to provide this benefit.)

Most low-income earners, and most African-American and Hispanic workers, didn’t have employee retirement plans. Most higher earners did — though the Federal Reserve reported in 2013 that the median combined balance in a 401(k), an I.R.A. or both among working households ages 55 to 64 was just $111,000.

No federal law requires employers to offer such plans, but some states are scrambling to create public programs so employers can stash a percentage of workers’ wages in personal retirement accounts. Seven have passed legislation: California, Connecticut, Illinois, Maryland, New Jersey, Oregon and Washington.

“But it’s really wacko to have 50 retirement programs,” Dr. Munnell said. “I hope this will encourage the feds to take action.”

For many of us, retirement decisions combine feelings about work, health, finances and the future in ways that questionnaires can’t easily tease apart.

Ms. Lister, for instance, hopes to continue teaching for at least another three years. At that point, a school system pension, combined with the Social Security benefits she claimed at 67, should generate enough income to retire.

Divorced and a relative latecomer to teaching, Ms. Lister has worked all her life, as an apartment manager, tax collector and an Army captain, among other jobs. Still, “with traveling around and periods of unemployment, I was not able to accumulate enough to live on” without working into her 70s.

But she also values what economists call the “nonpecuniary rewards” of her job, and she’s not sure she wants to relinquish it.

“It keeps my brain engaged. It connects me to a younger generation,” she told me. In her semirural town, “it’s almost impossible for me to go outside and not see a child I know.”

Last winter, a broken arm kept her out of school for weeks and “I almost went crazy” from inactivity, Ms. Lister said. Whenever she does leave her classroom, pure leisure doesn’t sound so appealing.

“I was thinking of getting a real estate license,” she mused. “I think I’d like that.”