Publisher's Perspective

There’s a saying that getting old isn’t so great, but it sure beats the alternative.


In light of recent trends, possibly roughly the same could be said now of continuing to work at older ages in a job that isn’t as fulfilling/interesting/enjoyable as it used to be. It beats the alternative of being out of work at an older age but not eligible and ready to retire.

In the Great Recession, older workers looking for employment found that their experience and well-proven work ethics did not necessarily count for much in the job market. For example, long-term unemployment, defined as half a year or more of looking for work, increased at a faster rate for those age 55 and older than for younger persons. Only about a third of older workers displaced from 2007 to 2009 had found full-time work by 2010, and unemployment more than doubled during the worst of the recession for that age group.

A Government Accountability Office report put it this way: "Long-term unemployment can put older workers at risk of deferring needed medical care, losing their homes, and accumulating debt. The experts and staff GAO interviewed at some one-stop career centers, as well as the unemployed older workers who participated in GAO’s focus groups, identified employer reluctance to hire older workers as a key challenge that older workers face in finding reemployment. They also identified out-of-date skills, discouragement and depression, and inexperience with online applications as reemployment barriers for older workers."

Being out of work as an older person can seriously erode future retirement security, not only by having to stop saving for retirement but also potentially from having to live off existing savings earlier than they had planned. For example, GAO said that a hypothetical worker who had $70,000 in retirement savings at age 55 and withdrew 50 percent of those savings during a two-year period of unemployment, would need about another 5 1/2 years of work and saving to rebuild the retirement account to the level it had been before unemployment began.

In addition, long-term unemployment can motivate older workers to claim early Social Security retirement benefits, which will result in lower monthly benefits for workers and their survivors for the rest of their lives. Social Security benefits can begin as early as age 62, but there is a penalty for drawing them before "full" retirement age, which currently is 66—to say nothing of losing out on the potential for increased benefits by waiting past that age.

And when unemployed older workers do find work, about 70 percent end up working for a lower salary than before, compared with 53 percent of reemployed individuals aged 25-54.

The main good news GAO found for older workers is that they are less likely to lose their jobs than are younger workers, largely due to tenure protections.

If you’re itching to ditch your federal job and are both eligible and ready to move into retirement, fine. But if you’re counting on getting work elsewhere until you become eligible for deferred benefits, you might want to give it a little more thought.