“In some ways, this isn’t surprising: We’re an aging society,” said Richard Fry, a senior researcher at Pew Research Center and lead author of the study. “But it isn’t just that there are more older adults in the workforce, it’s that a larger share of them are working. And it tends to be better-educated, older adults with a college degree.”
The increase of older college-educated workers in well-paying jobs has helped narrow the pay gap between retirement-age workers and younger ones, the Pew report found. Workers 65 and older made a median hourly wage of $22 last year, just $3 short of the median for younger workers; that’s down from an $8 gap in median hourly wages in 1987.
Fred Lilikes, 65, retired in June 2020 and lasted a few months before he found another full-time position in information technology. His new job gives him purpose and financial stability. He’s making nearly double what he would collecting Social Security retirement payments. And, more important, working gives him a reason to leave the house.
“I’m the kind of person who has to always be doing something,” said Lilikes, who lives outside Phoenix. “I can’t sit still.”
In all, the Pew analysis found, 19 percent of Americans 65 and over were employed this year, up from 11 percent in 1987.
There are several reasons people are staying longer in the workforce. Older Americans are healthier than in the past and less likely to have disabilities, so they are able to work longer. The nature of work has changed, too, with flexible office jobs replacing more physically grueling positions in factories and fields.
Policy changes also have played a role. Americans now have to wait until age 67, instead of 65, to access full Social Security benefits. And many companies have scrapped pension funds that offered regular payments after a certain age. Instead, they’re instituting more flexible contribution plans, such as 401(k)s, that tend to be linked to the stock market and other investments.
As a result, even when workers are ready to retire, they are having to consider additional factors such as the health of the economy and the stock market in determining the timing of their exit from the labor force, according to Joanne Song McLaughlin, a labor economist at the University of Buffalo.
“How much money you have for retirement now depends on the economic cycle,” she said. “And that can create incentives for older workers to work longer.”
More workers, she said, also are taking on “bridge jobs” or part-time work, or positions in completely different fields, to help them transition from career work to retirement.
“The old prototype retirement — where you work somewhere 40 years, then they throw you a party and give you a gold watch, and you never work again — just isn’t the case for most people anymore,” said Joseph Quinn, an economics professor at Boston College. “Today’s workers are retiring gradually, in stages.”
At 63, Leonora Reiley has already retired twice — first in 2019 after a 33-year career as a public high school teacher, and again in 2021 after teaching at a Catholic school in Yorktown, Va.
Now, she’s back at work, as a substitute teacher at a private school, teaching eighth-grade English. Reiley is still working full time, but sticks to eight hours a day instead of the 16 she sometimes logged.
“It’s all of the fun of teaching without any of the horror,” she said. “It’s fun, and it keeps my brain going.”
When she does retire again — not anytime soon — Reiley said she’ll be more deliberate about how she fills her time. She’s recently taken up mah-jongg and pickleball, and she volunteers with Meals on Wheels, which delivers meals to the vulnerable.
Economists say a combination of higher employment rates, growing stock portfolios and rising home values have disproportionately added to the wealth of older Americans.
The average net worth of seniors between 65 and 74 jumped 27 percent between 2019 and 2022, while people 75 and over notched a 43 percent increase. That’s compared to a 23 percent increase in average wealth for all families, according to the Fed’s Survey of Consumer Finances.
As a result, adults in their 60s, 70s and 80s are buying homes at higher rates and shelling out for cruises, travel and dining out, even as younger Americans pull back.
Baby Boomers are buying up all the houses
The Bureau of Labor Statistics projects that older Americans will account for 57 percent of the country’s labor-force growth in the coming decade.
“These people who are staying in the labor market are helping the economy — they’re producing more services and goods, and, at the end of the day, that’s what powers the country,” Quinn said.
There’s a widening spending gap between retirees and younger adults
While economists say it’s good for the U.S. economy to have more older people in the labor force, workers’ reasons for taking on continued employment can vary widely. Those at the bottom of the income scale and those at the top are most likely to work after retirement, Quinn said — but the lower-income Americans have to, and wealthier ones want to.
“The thing to remember is that there’s also a group of people in the labor force in the later ages who wish they weren’t,” he said. “They’re old, they’re tired, they’re poor and they have no choice.”
Diana Bryan had hoped to retire four years ago. At 73, she’s still working as a software engineer to pay down her mortgage in Loudoun County, Va.
She and her husband bought their home nearly 20 years ago with an adjustable-rate mortgage they had hoped to refinance. But the 2008 housing crisis sent their home value tumbling, thwarting their plans. Her husband died in 2021, and Bryan is still struggling to pay off their house note. Her interest rate went up again in September, adding $550 to monthly payments.
“I’m selling my home now in order to retire by end of 2024,” she wrote in an email, adding it would give her enough to hopefully retire next year. “Wish I didn’t have to.”
Nearly half of adults between 55 and 66 had no personal retirement savings as of 2017, according to census data, making it tough for them to stop working.
There are also signs that the growing share of older workers, particularly in well-paying managerial positions, is making it harder for younger workers to break into careers and move up. In a recent twist, new college graduates are more likely to be unemployed in today’s job market than other workers, including older people with college degrees.
New college grads are more likely to be unemployed in today’s job market
“I’m a case in point,” said Quinn, 76, the Boston College professor, who doesn’t have immediate retirement plans. “As soon as I leave, they’re going to hire some fabulous new wonderful junior person who deserves this job as much as I do. But it is true that some younger person is not in my job because I still am.”
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