What Happens When Baby Boomers Keep Working?

With the Labor Day holiday just behind us, it seems an appropriate time to look at employment trends among older Americans. The Employee Benefits Research Institute (EBRI) recently released its FastFacts report that showed that the overall labor force participation rate among people considered close to or beyond retirement age -- age 55 and older -- is at the highest level it's been during the entire period studied (1975 to 2010).

The overall employment rate among the age 55 plus group is 40.2 percent; broken down further, this rate is 46.4 percent for men and 36.4 percent for women. These rates have been steadily increasing since 1993, with faster growth among women than men. Keep in mind that these employment rates include everybody age 55 and over, including people in their 60s, 70s, and beyond. Most likely, the employment rates for people at the lower end of this group -- ages 55 to 64 - are far higher than for those at the higher end -- age 65 and above.

Of course, you probably didn't need a study to tell you that older workers are delaying retirement due to inadequate 401(k) balances, an uncertain economy, and a lack of affordable health care. But it's interesting nonetheless.

Here are some other interesting factoids from EBRI's more extensive report issued earlier in the year.

  • Employment rates among older Americans increase significantly for those with more education. For instance, half of all people age 65 to 69 with a bachelor's degree or higher were still working, and roughly one-third of all people age 70 to 74 with the same level of education were still working. This is somewhat surprising, given that people with higher educational levels are more likely to have higher incomes and hence more substantial financial resources for retirement. But it also might reflect that people with higher educational levels are more likely to be employable at older ages and more likely to understand the financial advantages of continued work.
  • Individuals age 55 and over who don't have pension income are twice as likely to still be working compared to people with pension income. While the trend isn't surprising, the magnitude of the difference is.
It's really not surprising that as employers have ditched their traditional pension plans en masse, people are working later in life. But the implications for society are profound: More older workers are clogging up the promotional channels, denying employment opportunities for young adults entering the workforce. For example, in August 2011, the overall unemployment rate for workers age 25 to 34 was 9.5 percent, compared to the unemployment rate of 6.6 percent for workers age 55-plus. It's widely accepted that younger workers don't value traditional pension plans, but this is a big mistake on their parts: That old-fashioned pension plan lets their bosses retire.

So what are the implications for you, other than some interesting post-Labor Day musings? You certainly might think it's not your job to retire so that the young folks can be employed. But consider these ideas:

  • Maybe you reduce your hours, providing more time to do what you've always wanted to do with your life.
  • Maybe you give up some of your responsibilities to the younger folks who are itching to prove they can do the job. This lets you focus on doing work that you really enjoy and that you do well.
  • Maybe you strike out on an entirely new career and provide a vacancy to someone else.
These moves can spark a win-win situation; not only will you make room for younger workers (our kids) to move upward, but you'll find it to be challenging and invigorating, giving you more life to your life. And when it comes right down to it, do you still want to be working at the same job 10 or 20 years from now?

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