Why older workers keep staying on the job

States look into creating portable retirement plans

Despite what some may think, older workers generally aren't grumpy people who grudgingly hang on to their jobs because they can't afford to retire, blocking the path to promotion for younger staff. A recent study by RAND shows that many older Americans stay in the workplace because they want to be there. Enjoying meaningful work is a key reason for delaying retirement.

In the new American Working Conditions Survey (AWCS), older workers report having more meaningful work and more workplace flexibility than their younger peers. The AWCS compared responses to questions about workplace conditions and satisfaction among older workers (age 50+) and their prime-age peers (ages 35-49).

The AWCS found that more than two-thirds of older men and women reported satisfaction with work well done and felt they were doing useful work. Prime-age women reported about the same level of satisfaction, but only a little more than half of prime-age men reported these same levels of satisfaction.

Older workers are also more likely than prime-age workers to say they apply their own ideas and solve unforeseen problems, and they're less likely to report that they perform monotonous tasks.

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Older workers are also more likely to report workplace flexibility than their younger peers. College graduates in particular are more than twice as likely to determine their own work schedules as their younger counterparts are. 

Researchers often explain these results -- in this study and others -- by pointing out that older people are generally more satisfied with life than younger people and that older workers are more likely to have found work that they find satisfying.

On the other hand, younger workers report more satisfaction in two areas: social support at work and the opportunity for advancement. This last item, however, might result from the fact that older workers have advanced their careers farther than younger workers.

The AWCS report also discusses how people's stamina, strength, balance, vision and hearing tend to decline as they age. This can put limitations on the work that older Americans can complete or expose them to the risk of injury. 

The AWCS report found that older workers are less likely to work at high speed and are more likely to take breaks when they need, compared to prime-age workers. All these factors point to the need for employers to accommodate the realities of older workers and align with their changing capabilities.

Here are some compelling reasons for older workers to stay longer on the job:

  • Working longer enables people to delay starting Social Security benefits, which significantly increases their expected lifetime payout and improves the financial security of the surviving spouse for married couples.
  • Workers might receive subsidized health insurance from their employer, reducing their health care costs compared to buying it on their own after they retire.
  • Working can help maintain employees' health, particularly when their employer offers a wellness program.
  • Older workers might enjoy valuable social connections that can also help enhance their health and well-being.

One very effective strategy for older workers to consider is downshifting: They could work just enough to cover their living expenses to allow their Social Security benefits and retirement savings to grow as long as possible. For some individuals, delaying full retirement from age 65 to 70 could increase retirement income by as much as 40 percent. 

Strategies for finding a great job when you're over 50

And perhaps you don't need to work as hard or earn as much as prime-age years. Instead, seek interesting, satisfying work with flexibility, respect and social connections.

The AWCS study points to the need for both individuals and employers to find ways to keep older Americans engaged in work by accommodating their changing capabilities, allowing them to apply their interests and abilities, and providing the flexibility they desire. 

One important challenge for employers is to design a path for older workers to transition gracefully from full-time work to part-time or downshifting work, while training and mentoring prime-age workers to transition into positions of responsibility.

With many people living longer compared to prior generations, working longer is just one of the many realities society will need to adapt to -- and that's not so bad, considering the alternative.

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