Working longer is a mantra these days for many Americans hoping to build greater retirement security. Staying on the job even a few years beyond traditional retirement age makes it easier to delay filing for Social Security; it also can mean more years contributing to retirement accounts and fewer years of depending on nest eggs for living expenses.
But since the Great Recession, staying employed has been easier said than done. The economy has continued to mend gradually, and the job market has improved. How are older workers faring? The picture is mixed. If you're in the ramp-up years to retirement and aspire to stay employed past traditional retirement age, here are five key trends to watch.
UNEMPLOYMENT IS DOWN
Joblessness for older workers is lower than the overall national unemployment rate. In November, the unemployment rate for the 55-plus workforce was 4.5 percent — considerably lower than the overall 5.8 percent rate, and below the 4.9 percent 55-plus jobless rate a year ago, according to the U.S. Bureau of Labor Statistics.
And fewer older workers are worried about layoffs than their younger counterparts: A recent Gallup survey found just 13 percent of workers over age 50 are worried about layoffs, compared with 29 percent of people under age 35, and 15 percent of 35- to 54-year-olds.
"If you have a job, chances are pretty good you will be able to hang on to it," says Sara Rix, senior strategic policy adviser for the AARP Public Policy Institute. "Many companies went through disruption during the recession — changing hands and letting go of people. But the labor force data tells us that the older population has been faring pretty well."
DESIRE TO WORK LONGER IS RISING
An AARP survey released earlier this year found that 70 percent of Americans plan to work in retirement. But that doesn't necessarily mean sticking to the schedule — or work — that they're doing now. Twenty-nine percent plan to work part-time because they enjoy working; 23 percent said they'd work part-time because they need the income; 13 percent intend to start a business or work for themselves; 5 percent expect to retire and work full-time in a new career.
Participation in the labor force — that is, the percent of people working or actively seeking work — has been rising slower among older workers. In November, 40.1 percent of 55-plus workers were in the market, up from 38.9 percent when the recession started.
LENGTH OF JOBLESSNESS IS LONGER
Long-term unemployment remains a critical problem for the 55-plus crowd. Workers age 55 and older needed 51.1 weeks, on average, to find new work, according to the November bureau's jobless report — much longer than the 30.6 weeks needed for younger people to find new employment.
And when older workers do secure new jobs, they're likely to earn less. One study found that displaced workers will earn 14 percent to 19 percent less for the rest of this decade than workers who stay employed continuously — and that they are up to 8 percent more likely to experience another layoff.
AGE DISCRIMINATION: A MAJOR WORRY
The federal Age Discrimination in Employment Act of 1967 makes it illegal for employers to discriminate based on age in hiring or firing practices. Cases of discrimination in hiring are nearly impossible to prove, and the number of complaints filed with the U.S. Equal Opportunity Employment Commission alleging age-related discharge has stayed fairly steady in recent years — 1,185 cases were filed in 2013. But the AARP survey of workers ages 45-74 found that 64 percent have seen or experienced age-based discrimination in the workplace — and nearly everyone thinks it is commonplace.
The key implication: If you're hoping to work longer, hang on to your current job for dear life. "Anyone in the boomer generation who anticipates working to an advanced age, either by choice or out of necessity, would be well advised to stay with the current job . . . unless he or she has the wherewithal to become an entrepreneur," says Elizabeth Fideler, a research fellow at Boston College's Sloan Center on Aging & Work.
OVER-70 CROWD, PUSHING THE ENVELOPE
Increasing labor force participation rates are most dramatic among men and women in their 70s and 80s, according to Fideler. "Seniors enjoying good health and the prospect of greater longevity stay on the job because they can," she says. "When they love what they do, they don't want to stop.
Mark Miller edits and publishes RetirementRevised.com. His column is distributed by 50+ Digital, LLC.