Older adults are remaining in the workforce well into the supposed retirement age, new data has revealed.
After more than three decades, the workforce has witnessed double the number of employed Americans age 65 and older, the Pew Research Center revealed. In 2023, 19% of older Americans represented the workforce, earning $22 per hour (in 2022).
A little over 18 percent of African Americans age 65 and older wereworking or actively seeking work in the labor force in 2020 compared to 20.7% of men and 16.4% of women.
Between 2019 and 2040, the African American population aged 65 and older is projected to increase by 80%.The Pew Research report highlighted key factors that have motivated the increasing rate of the older population in the workforce. Among them:
- Today’s older Americans tend to have higher education levels than older workers did in the past. Roughly 44% of older workers today have a bachelor’s degree or more education, compared with 18% in 1987. This narrows the pay gap between workers ages 25 to 64. According to census data, from 2011 to 2021, the percentage of adults age 25 and older with a bachelor’s degree or higher increased from 19.9% to 28.1% for the Black population.
- Policy changes have discouraged early retirement. Older people are working longer in part due to new changes to the Social Security system concerning retirement age. The policy now requires workers to receive their full retirement benefits at 67, raising the age two years. Experts suggest that the policy has likely forced older adults to continue working. For older Black adults, many of them have lower levels of education, income, and wealth than whites.
- Retirement plans have evolved. High inflation is continuing to burden household budgets, with increasing numbers of households shifting their retirement plans to make ends meet. The research found that among workers ages 65 and older, 36% now have the option to participate in an employer- or union-sponsored retirement plan—up from 33% in 1987. However, employers have pivoted away from traditional pension plans and toward defined contribution plans such as 401(k)s, which do not encourage early retirement. The old-style benefit plans incentivized workers to retire at a specific age.
- The nature of jobs has changed. Typically, older working adults are in different careers than they were when they were younger, especially if it is less strenuous on the physical body. They prefer work schedule flexibility and independence. Since 1990, research found that occupations have adapted to more age-friendly accommodations for employees. These include insurance salespeople, tour guides, proofreaders, and financial managers.
Despite staying longer in the workforce, workers ages 65 and older are more satisfied with their jobs overall than younger workers, a recent Pew Research Center survey reported.