Are We Destined to Work in “Retirement?”
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A recent poll of adults aged 65 or older, conducted for a financial advisory firm, arrived at a fascinating finding: 51% of the respondents said they plan to work indefinitely.
“Retirement” must not mean what it used to – not if half of adults of traditional retirement age expect to be working in their “retirement” years.
But then, I think the word “retirement” should be deleted from our vocabulary. What that word once meant – a few years of well-deserved leisure – is not what it means today, when 90% of Americans can’t afford to retire. (My preferred term for this life stage is “The AfterWork,” as noted below.)
While this particular study of 1,000 adults does not meet the gold standard of public opinion polling, more reliable data does confirm that something epic is going on. The Pew Research Center’s analysis of U.S. Census data in 2023 found that 19% of adults age 65 or older were employed that year – and more than half of them were working full-time. Perhaps more impressive: of those aged 75 or older, 9% are still employed, making them the fastest-growing age group in the workforce. Thirty-five years ago, their employment rate was only 4%.
So what is going on here? Are we so in love with work that we just can’t stop ourselves? Are we so broke that we can’t afford to quit?
While either of those may be true, the real reason becomes apparent when we widen the lens for a better perspective.
The Longevity Factor
What has altered the traditional notions of retirement is longevity. Thanks to incredible breakthroughs in medical science and changing attitudes about healthy living, older adults today can expect to enjoy longer lifespans and more years of good health throughout those lifespans. According to J.P. Morgan Asset Management’s latest Guide to Retirement, more than half of healthy, nonsmoking women and 40% of healthy, nonsmoking men may live past age 90.
This is great news for those of us who enjoy being alive and want to continue in that state for as long as possible. But it is bad news for our prospects of living those bonus years in the manner to which we would prefer to become accustomed. It’s also bad news for the Social Security system.
When Congress created Social Security in 1935 and set the age of full retirement at 65, the life expectancy of American men was 61 years. Those who lived long enough to receive Social Security could look forward to 5 to 10 years of retirement. Today, if you retire at 65 you might be living another 25 to 30 years.
This new longevity, together with the aging of the Baby Boom generation, has put a huge financial strain on the Social Security system, which, unless Congress acts to fix it, will be forced to chop benefit checks by 25% starting just 10 years from now.
(Apropos of that, the financial advisory firm poll that I mentioned earlier had another fascinating response: 39% of adults age 65 or older are worried about losing government benefits such as Social Security and Medicare. This implies 61% of older Americans have been living under a rock.)
Longevity also presents a great challenge for older adults who aspire to leave work behind. It’s one thing to save enough to fund 10 years without a paycheck, and quite another to save enough for 30 years.
New Stage of Life
These longer lifespans have led us to a wholly new situation that undercuts our normal thinking about working life and post-work life. In response, there appear to be three alternative scenarios:
1. More years in The AfterWork when our careers are over.
2. More years of working, with fewer years of AfterWork.
3. Some combination of both.
Working longer is one logical approach to this new development. Whie working full time in your 70s is not a realistic choice for everyone, it may make sense if you love your work and enjoy good health. (A global study by the International Monetary Fund found that a 70-year-old in 2022 had the same cognitive function as a 53-year-old in 2000 and the same fitness as a 56-year-old.) It also may be a necessary choice for workers who have not socked away enough money to cover 20 or more years without a paycheck.
There are other rational approaches to this new stage of life, which I detail in my new book The AfterWork: Finding Fulfilling Alternatives to Retirement.
I invite you to join me on Thursday, Sept. 4, at 7:30 pm (EDT) at the virtual launch for my book. Expect a lively discussion about The AfterWork as readers and potential readers talk about our own experiences. The link to the launch is https://us02web.zoom.us/j/89616342132?pwd=VTnnz7to4CbWB5nbAH4JkXPTKN7fbp.1
Please join in the conversation as we explore all the alternatives that this mixed blessing of longevity presents us.
The EndGame is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
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