The number of Americans who continue to work after celebrating their 65th birthday is expected to increase to as high as 23.3% in 2028, according to an analysis from the Pew Charitable Trusts, which notes that the workforce participation rate for the same age group in 1998 was a mere 12%.
According to the article “One-Fifth of Retirement Age Americans Are Working, And Their Ranks are Growing” from Financial Advisor, some of the highest paying jobs for seniors are at colleges and universities, where their average salary is more than $93,000 a year.
That can be balanced by the more than 165,000 working seniors who are employed in grocery stores, where they earn a salary that averages $31,000 a year.
Does the increased number of older workers mean that there is less room for younger workers? In part, yes. However, people in the job market ages 16-24 are not seeking jobs as much as they did in the past. In part, that’s because they are in school. It’s clear to this generation that having a college degree is a necessity for future success. However, older workers are also taking some of the entry level jobs that younger people once held.
The rise of the senior employment may be in part because of the sticker shock that occurs when retirees realize that Social Security benefits don’t go as far as they expected.
The max for those taking Social Security at age 62 is $2,209 a month. The max for those who can wait until age 70 is $3,770 monthly. However, relying on Social Security alone for income during retirement is not enough to live on.
There are some geographic variations of seniors working after age 65. However, the number of people over 65 who are still working has increased in 36 states since 2014. Vermont has the highest rate of seniors working, with 26% of the population still working.
In the southeastern states, and especially in Mississippi and Kentucky, only 14% of seniors over age 65 report that they are working.
Taking a closer look, seniors in areas where the cost of living is high, for example, Loudoun County, VA, a suburb of Washington, D.C., are more likely to be working. More than 25% of people 65 years and older in that area are working.
Another contributor to more seniors working, is the increasing absence of defined benefit plans. In the past, employers could be counted on to provide pensions that would continue for worker’s entire lifetime. The emergence of individual retirement plans and 401(k)s put the onus on the employee to save and invest for their retirement, which some have been able to do more successfully than others.
States are scrambling to fund job-training for seniors, most notably in Colorado, Minnesota, and Hawaii, where the employment rate of older workers is increasing the fastest.
Remember: “An ounce of prevention is worth a pound of cure.” When making your estate plans or when probating an estate or administering a trust, do not go it alone. Be sure to engage a Cincinnati estate planning attorney.
For more information about estate planning, probate or trust administration in Cincinnati (and throughout the rest of Southwest Ohio) and to review free resources regarding estate planning, probate or trust administration, visit my website. If you have questions regarding this article or a particular legal matter, feel free to contact me at 513-399-PLAN (7526).
Reference: Financial Advisor (September 27, 2019) “One-Fifth of Retirement Age Americans Are Working, And Their Ranks are Growing”