2011 November 20 Sunday
Elderly Workforce Surging: Get Ready To Work After 65

Necessity is a mother. Harvard economist Edward P. Glaeser looks at the rising ranks of elderly workers.

The numbers supply a vivid picture of America’s graying work force. Between 2007 and 2010, the number of working Americans over 65 years old jumped 16 percent; the number of under-65’s in the labor force shrank. The trend started before the current downturn: the number of Americans over 65 in the labor force increased from 10.8 percent in 1985 to 12.1 percent in 1995 to 15.1 percent in 2005 to 17.4 percent in 2010. Until 2001, most workers age 65 and older had part-time jobs; since 2001, full-time work has been far more common.

The need to work into old age is growing. I know people in their 60s who have saved nothing toward their old age. So they work out of absolute necessity. Some have suffered financial reversals. Others lived their lives with money flying in and flying out of their lives. Still others just didn't try that hard. They chose to do whatever was more fun and worked part time. Now they are in their 60s and have to keep on working into their 70s.

But even if you are a saver you need to consider the possibility of living into your 80s and 90s and how you'll take care of yourself as you get older. You'll have to pay a larger fraction of your health care costs out of pocket. Governments (not just the US government) will have to cut back on the richness of their old age medical programs. Too large a fraction of the population will be old with too small a working age population to support them.

Today nearly 450,000 Americans 65 and older are unemployed and looking to work. To get an idea of how dramatic a jump this is, consider this: the number of unemployed elderly job seekers has more than doubled in the last four years.

Tough economic times have caused a surge of 65+ looking for jobs. My advice: steer your career years in advance in directions that create opportunities for continued work in ways that beat working as a greeter at Wal-Mart. Back in the 1980s I met a guy who was in his late 60s working as a greeter at Wal-Mart. He invested in a real estate boom and found himself much poorer as a result. So there he was greeting people effusively. Don't wind up like him.

How much money will you have to save to cover your old age health care costs? If you haven't been saving for old age medical costs you probably need to work longer.

A man who has relatively average drug expenses needs to save $136,000 to have a 90% chance of covering his health-care costs in retirement, while a woman — given her likely longer lifespan — needs $156,000, according to the Employee Benefit Research Institute, a nonprofit, nonpartisan group. A couple with median drug expenses needs $287,000 to have a 90% chance of covering their costs. Read more about health-care costs on EBRI's site.

Advances in cell therapies, gene therapies, tissue engineering and other biotechnologies are going raise the life expectancy of most of the people reading this post. Start thinking about a longer work life and how to achieve it. Do you work for a company that will grow or shrink in the coming decades? Do you expect the area you live in to expand or shrink? Does your area have one or two or many employers who could potentially use your skill set? Do technological trends favor the continued existence of your job? If not, how can you shift into a longer lasting career path?

Money to spend in old age on medical treatments will have higher utility in the future because more treatments will be available to buy. Vat-grown replacement organs are already being grown for a few organs in small numbers and more for lab animals. Lots of other treatments will be coming down the pike even as government finances deteriorate. Your own buying power could make the difference in how many years you live. Work and save accordingly.

Share |      By Randall Parker at 2011 November 20 06:41 PM  Economics Retirement


Comments
Lono said at November 21, 2011 8:14 AM:

I intend to retire from mandatory work in the next decade - as I take several of my incubating start-ups to fruition - but really does retirement as we have come to know it in the U.S. make any sense at all?

Imho man was never meant to have a period of high intensity work followed by a shorter period of complete leisure - it just isn't natural - and frankly I have seen too many people reach retirement only to become seriously depressed about their sudden lack of structure in their life.

If I retired tomorrow I would continue to build businesses and do research as always - granted on a more flexible schedule - but the idea of forced leisure seems fairly ridiculous to me.

Sure travel is great - but that gets old as well - unless you make a business out of buying and selling (or say teaching and/or volunteering) while you do it.

I think the best advice is for people to become well established in the type of work they enjoy doing by their 40's or 50's - or short of that turn their hobbies into potential revenue streams - so that if you do have to continue working for life you actually can be fulfilled and enjoy the work you do.

Don't buy into this corrupt crony capitalist system which attempts to chew you up and spit you out - it's an artificial construct that requires your volunteer participation to survive.

In said at November 21, 2011 10:00 AM:

Imho man was never meant to have a period of high intensity work followed by a shorter period of complete leisure - it just isn't natural - and frankly I have seen too many people reach retirement only to become seriously depressed about their sudden lack of structure in their life.

Excellent point. Our standard lifestyle model doesn't seem natural. I think people would be happier if they could more easily take more time off when they are young and work more when they are old. I don't know what its like to be old, but my guess is the optimal work week for most elderly is greater than zero hours and less than 40 hours a week.

Mephistopheles said at November 22, 2011 9:40 AM:

How can we, as an advanced, scientific, technological society, not be able to devise a humane rational policy on human aging and lifespan. No animal is built to live forever, homo sapiens included. The thought that I have to save and save- i.e. sacrifice in the present, a present of good health and vigour- so I can live for decades past my due date, decades spent in chronic pain, failing bodily systems, cogntive decline- is a decidedly unappealing tradeoff. Please, let's give people another option- you get a boost to your income or a tax break or some measure that boosts standard of living while young and lively, on the condition that you agree to have yourself humanely euthenised at say 75 or 80, or something like that. I have no idea if the math works out, I'm sure its ethically deplorable, and enforcement would likely be impossible, but, damn, having seen the lives of seniors in their 80s and 90s, I have no desire the join their lot.


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