As workers live longer, healthier lives – and deal with the issue of providing enough retirement income to support them in their 70s, 80s, 90s – employers and employees face a new reality. Many Americans age 55-70 are continuing to work past the standard retirement age or are returning to work after retirement. These aging workers remain in the workforce for two primary reasons: financial necessity and the desire to remain active or try something new. There are a variety of factors that have influenced people to have this later transition into retirement.
- Americans are living longer
- Increased health care costs
- A growing skills shortage in many industries
- Financial resources available for retirement
Because of these factors, more and more adults over 55 have been forced to reconsider when they will retire. Furthermore, a class of “Working Retired” individuals has emerged that is comprised of people who have reached the traditional retirement age, but continue to work at least part-time.
Today, there are four main groups in the aging labor pool:
- Mature workers – Approximately 30% of people over 55. This group is made up of employees aged 55-70 who are working full or part-time, but are not yet receiving retirement benefits, except Social Security.
- Mature workers w/no nest egg – Approximately 16% of people over 55. These are employees age 55-70 who are working full or part-time, but have no access to retirement benefits (except Social Security). This group is likely to work longer because they need the income and have no other retirement assets.
- Working retired – Approximately 15% of people over 55. Employees age 55-70 who previously retired, and then returned to the workforce. Individuals in this group are already receiving retirement benefits from a previous employer, but for a variety of reasons they have decided to return to the workplace.
- Traditional Retirees – Approximately 38% of people over 55. Older Americans who are fully retired and not working. Some are likely to be drawn back into the workforce as their retirement experience evolves.