Not Finished Yet

By Lyndi Schrecengost

At one time a near universal expectation, retirement is no longer guaranteed—or even desired—by many Americans. The 40-year career is rapidly becoming a thing of the past. Already, one in five Americans age 65 or older are working, nearly double the number who said they were employed 35 years ago, according to a new poll by the Pew Research Center. In another recent survey, one in three workers said they would not retire until 70 or beyond, or not at all. And according to the Bureau of Labor Statistics, the number of people 75 and older in the labor force is expected to grow by 96.5% by 2030.

This shift has been relatively recent and is in part tied to tougher economic times. Older workers are feeling the crunch of everything from nonexistent or inadequate retirement savings to rising inflation. Many companies today do not offer retirement plans of any kind, while defined benefit pensions have all but disappeared in the private sector. Indeed, census data reveal that more than two-fifths of baby boomers in the 55 to 64 age group have no retirement savings at all, and that they carry more debt than previous generations. In general, there is a growing angst among older Americans that they will have insufficient money to live comfortably in retirement.

But there are other factors—slower to evolve, but no less significant—that are driving this change. In the past, by the time someone had reached their early 60s, one or both of their parents had usually died. While those born in the 1920s and ’30s could expect their parents to die in their 70s, today’s boomers and Gen Xers are looking after parents in their 80s and beyond. And quite often, they are also supporting children who have returned home, a byproduct in part of the lingering financial fallout from the 2008 recession—and now the post-pandemic environment. In short, many people born in the 1940s and ’50s simply can’t retire because of family and financial pressures their own parents never had to face.

Financial concerns are weighing heavily on many of today’s soon-to-be retired. Although 65, Ronald Harwell is not able to exit the workforce yet, even though he’d like to. A logistics operator from Methuen, Massachusetts, Harwell found himself shackled with a lot of debt following a recent divorce. “I have two loans and two credit cards that I’m trying to pay off. The rent where I live is expensive, and when I retire, I will only have social security and what is left in a 401(k). Although I’m hoping to retire in a couple of years, I plan to work part time because I need to save money and clear all my debt.” Dr. Lisa Natale, 67, a chiropractor in Hawaii who put herself through school as a single mother, reported in The Guardian that she can’t envisage retirement anytime soon, a predicament more and more common for today’s older workers: “I have no savings, no assets, I don’t even own the home I’ve been renting for 15 years. There’s no way I could afford to retire.”

And some who may have stayed in the workforce for nonfinancial reasons have ultimately realized that they need to keep working for the money. Andrew Taylor, a 76-year-old engineer from Merrimack Valley, New Hampshire, retired from Wyeth BioPharma in 2009. Although financially comfortable after retirement, Taylor was not comfortable with retirement itself. After only three months, he decided to pursue a second job with a different company, reentering the workforce as an automation engineer with a high-tech startup. Although he expected the job to last a few months, he stayed for 13 years, until the company closed operations in 2023. Taylor noted other factors that make traditional retirement less financially sustainable today.

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“When I retired, finances were not a concern for me. Don’t ask me why, but I felt a life expectancy of 72-74 was rational and also optimistic. With the current state of the economy and drastic increases in costs for basics such as food and fuel, I’m no longer comfortable with my financial position. I will not go hungry, but if I live into my 90s there will be adjustments that I will need to make!”

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Over the last 60 years, life expectancy has increased by nearly 23 years, so today’s retirees, like Taylor, must stretch their retirement income much further than previous generations. Meanwhile, healthcare costs are rising, with growing numbers of older Americans now relying entirely on Medicare. At the same time, it’s not just an extended life span that has come into play. It’s also an extended health span. Medical advances, a greater understanding of health risk factors and lifestyle modifications are allowing people to live not just longer, but better, meaning they feel less urgency to stop working. Another difference is that the kinds of jobs that people have today are often less physically demanding than they were in the past. It’s easier to continue working when your job requires brain work versus body work.

As a result, many people are staying in the workforce longer, not because they have to, but because they want to. Jacquelyn James, a psychologist and co-director of the Center on Aging and Work at Boston College, spoke of this “fulfillment factor”: “Work gives people an identity. They need the structure of the day. Vacation is great because it’s short and close-ended. But 30 years of leisure is really not that much fun. People also have colleagues at work that they value, and their social life is there. People identify with their work, whether white or blue collar. Their self-esteem depends on it.”

A Drain on the Economy?

In 2010, demographer and Open Markets Institute policy director Phillip Longman warned that a “gray tsunami” was sweeping the planet, his way of describing the socioeconomic threat posed by an aging population. This alarmist phrase reflects an age bias many of us have, whether consciously or not. As journalist Ashton Applewhite describes in her book This Chair Rocks, this attitude reinforces stereotypes that “olders” are a “drag on the economy, draining the wealth of future generations.”

The argument that older workers take or keep jobs away from younger workers may sound familiar. The same argument was used when women began entering the workforce in greater numbers in the 1970s, and it is also being used today with regard to immigrants. It stems from what is called the “lump of labor” fallacy, a tenacious, zero-sum idea that first surfaced in the 1850s, positing that there is a fixed amount of work to be done and that when a new group enters the labor market, others are prevented from obtaining employment.

Older workers also are accused of “job hoarding,” allegedly preventing younger workers from advancing professionally and lowering their wages. Some economists point to this as one reason why so many younger workers “job hop” today, which is a costly headache for employers and makes it difficult to assess an employee’s true value. Not surprisingly, according to an Associated Press poll, employees under the age of 50 are significantly more likely to view America's aging workforce as a negative development when compared with those age 60 and higher.

But does an aging workforce actually hold back younger workers and hurt the economy? According to a 2012 Pew Charitable Trusts report, the lump of labor theory did not prove true during the Great Recession of 2007-2009. There is no evidence that greater boomer employment “crowded out” younger workers, even in that very difficult economy. Instead, the report showed that from 1977 to 2011, a one percentage point increase in the employment rate among older workers was associated with an increase of 0.21 percentage points for younger workers, as well as an increase in their wages and hours worked per week.

At the same time, some have suggested that today’s job-hopping trend is not tied to older workers at all, but to factors such as corporate inflexibility, overemphasis on the bottom line and an erosion of the social contract between employer and employee, making younger employees value risk-taking and career advancement over loyalty and job longevity.

Older workers also stimulate economic growth in other important ways—through increased tax revenues and less reliance on government assistance, greater consumer spending and by filling in the gaps in some labor sectors that are not being filled by younger workers. What’s more, as Applewhite has pointed out, when older workers are forced to accept retirement, companies lose some of their best workers and hard-to-replace institutional memory.

Finally, older entrepreneurs create new jobs, far more than any other age group. According to a report published by the Kauffman Foundation, the highest rate of entrepreneurship in America is in the 55-64 age group. This age cohort is almost twice as likely to found successful companies than people between age 20 and 34. Clearly, having older people in the workforce equates to better outcomes for younger workers, too.  

Age as Asset

For nearly a decade, the American Association of Retired Persons has been asking American companies to sign a pledge, giving workers over 50 a fair shot in hiring. More than 2,500 businesses, including Bank of America, Marriott and Microsoft, have made this commitment. Such a pledge is not just good “inclusiveness” PR. More and more employers are recognizing that older workers are an asset—and even that they prefer to higher them over younger workers. 

What is giving older workers the edge? Well, for starters they have a strong work ethic. In spite of their “hippie” histories, baby boomers grew up at a time when a high premium was placed on hard work; in fact, they are currently the hardest working generation around. According to a Wall Street Journal survey conducted in March 2023, 75% of people 65 and older said that hard work is very important to them, compared to 61% of people age 18 to 29. To look at it from a different angle, a Pew Research survey conducted in 2009, found that six in 10 respondents cited work ethic as one of the biggest differences between older and younger generations. And because they are not new to the parade, older workers are considered less influenced by office politics and more unflappable in times of change.

Some employers today are frustrated with what they see as a lack of maturity or loyalty in their younger employees. Laura Ellis, a North Carolina-based dermatologist and entrepreneur with 12 employees in three locations, spoke of some of these issues:

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Currently, I have a 22-year-old employee and a 29-year-old employee, and they are knocking it out of the ballpark. They’re amazing. However, I’ve also hired a few other younger employees over the past two years who had unrealistic expectations. I had one employee who was in a training session to learn how to perform a procedure. She was on her phone scrolling and texting the entire time, not paying attention. It was disrespectful to the trainer, to the patient, and the company in general. It really affects other employees to have someone like that in the house.

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The common argument that older workers are far more costly than their younger counterparts also doesn’t hold up. To begin with, older workers are equally or more productive than younger workers, according to a 2019 survey of employers by the Center for Retirement Research at Boston College. In addition, they tend to log in longer hours, take fewer days off and no longer have small children who increase the cost of their health plans. Indeed, many older workers become eligible for Medicare at age 65, which can further reduce employer healthcare costs. And, according to a recent article in Forbes, they are excellent thinkers and problem solvers, highly teachable and bring soft interpersonal skills sometimes lacking in their younger workers. They also tend to be more punctual, reliable and loyal—staying in their jobs longer. And far from being a drain, many older workers are keen to pass on their experience and knowledge to younger colleagues.

Seventy-four-year-old Robert Miller is a former USAID employee, who now works as a consultant, offering training and support programs for USAID workers. Robert doesn’t need the money. He continues to work because he feels he has something important to share.

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“USAID work in developing environments can be pretty tough. Relaying real-world experience to new foreign service officers is important. I expose them to the different situations that may arise, and also advise them on what regulations and laws and policies come to bear on different issues. I find it rewarding to be able to give them the tools to problem solve and do their job better.”

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Although for some work is a financial necessity, for many others money is a small part of why they continue to work. For Denny Machette Pizarro, a jewelry maker from Summerfield, Florida, it is about passing on what she loves to others. “I love teaching people about my passion. I love giving them the skills so that they can do things on their own. Selling my work is just serendipitous.”

In a profession that is by definition “youthful,” Dr. Ellis now feels a growing incentive to hire older employees: “The other day, one of my long-term employees and I were discussing hiring some more help for our Asheville office and she said, ‘We’ve got to figure out how to find a mature person, an older person who actually shows up, is respectful, and does the work.’”

No Beginning and No End

While it’s impossible to know exactly how things will shake out in the coming decades, one thing is clear: Retirement will be less and less fixed, with a clear beginning and end. As Dr. James says:

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“We now have lots of data to show that retirement is very fluid. People retire and two years later, they go back to work, and then two years later, they retire again. A year later they go back to another job or the same job, or they get a project that interests them. At one point, I was trying to track patterns of retirement after age 65, using the data. There was no pattern to be found.”

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Older workers can be entrepreneurial, like Laura Ellis, creating new jobs, businesses and opportunities. But they also contribute in ways that are less quantifiable, but no less important. By taking up the baton—from managing, mentoring and training younger work colleagues to volunteerism, caregiving and charitable work—they help ensure positive continuity between generations and give back in ways that are not always adequately measured or valued.