http://www.washingtonpost.com/news/get-there/wp/2014/10/03/the-anti-retirement-plan-working-9-to-5-past-65/
This article, from the Washington Times, explores the relatively new phenomenon of working into and past retirement. A couple decades ago, once one hit retirement age, he or she would traditionally retire and receive a pension, allowing them to do all of the stereotypical retirement activities. Now, however, more and more adults of 65 and older are actually choosing to remain in the work force. This is the result of several changes, the first being increased life span. Today, one in four Americans will live to be 90 and one in ten will live to be 95. With the retirement age at 65, it makes sense that people would want to work a little longer to compensate for their longer lives. Another reason for this trend is the changing job climate. People can now work longer because their jobs are less physically demanding. Obviously, someone who has a profession can continue working longer than someone with a blue collar position. Because more and more Americans hold these intellectual jobs, more and more 65 and up individuals are working longer. Lastly, there has been a decline in the use of pensions. It is more traditional now to rely on social security and savings, whereas in previous decades a pension was the norm. It is economically beneficial to withhold drawing from social security, which many people are realizing and doing. Regardless of the many reasons one chooses to continue working, one thing is clear; it is becoming an increasingly popular alternative to retirement.
The reality of working past 65 is definitely becoming more and more prominent. A lot of people are finding it more difficult to save, and with the middle class dissipating the smaller upper class will most likely be the only people retiring on time in the future. Also, it's interesting that you pointed out how much of an impact pensions had on peoples' ability to retire more easily. A lot of the increase in working past 65 can be contributed to many people losing or taking hard hits on their savings in 2008.
ReplyDeleteI see this having both positive and negative effects. With more workers waiting longer to start collecting social security, the money pool may last a little longer as the baby boomers gradually retire if they are retiring at an older age. The negative side is that it may restrict the decreasing of the unemployment rate. If a 65 year old left the labor force while at the same creating a job opening the unemployment rate would be decreasing much faster.
ReplyDeleteThis is definitely an issue, and I believe increases in retirement age HAVE been proposed in the US; other counties have already increased theirs (not the best example, but http://timesofindia.indiatimes.com/city/jaipur/Raj-moots-shifting-of-docs-to-med-colleges-increasing-retirement-age-to-check-shortage/articleshow/44204597.cms shows that, at least in the medical fields, India is increasing retirement ages). They were based on a different lifespan, where people were more likely to be dead by retirement age, and a different economy. If 1 in 4 Americans is living to 90, almost 1.5x the current retirement age, this severely decreases their working life. This is compounded especially by the fact that more and more people are going to school for longer and longer in order to be qualified or have experience enough to get hired...Into the same jobs that those past retirement age cannot or will not vacate.
ReplyDeleteBasically, no easy fix.