The lengthening of working careers, which was accelerated by the recession, appears to have taken hold permanently and is no longer linked to a need to make up for investment and other losses due to the downturn, according to an analysis by the Employee Benefits Research Institute.
The report noted that the percentage of Americans age 55 and older who were in the labor force had declined from 35 to 30 percent between 1975 and 1993, but started creeping up and then jumped during the recession, more than 40 percent in 2010 and 2011. By gender, the rate fell from 49 to 38 percent among men before increasing back to 46 percent, and after remaining flat among women at around 23 percent in 1975-1993, it has risen to 35 percent.
While the numbers for 2010 and 2011 were overall flat, there was an increase in the rate of continuing to work past age 65, which offset a slight decline in labor force participation by those age 55-64.
The report also underscored the value of federal benefits, particularly the defined benefit annuity and the continued eligibility of retirees for employer-sponsored health insurance. "Workers are assuming more responsibility for funding their retirement expenses, as private-sector workers more commonly have a defined contribution (401(k)-type) plan (which typically requires workers to contribute). Employment-based retiree health insurance is increasingly scarce, and those who do have it are likely finding that their share of that cost is increasing," it said.
That was reflected in working rates. Among those 55 or older with pension income, only 24 percent are continuing to work, while of those without pension income, 51 percent are still working.
"However, financial concerns are not the only incentives involved here—there also is an increased desire among many Americans to work longer, particularly among those with more education, for whom more meaningful jobs are often available that can be done well into older ages. The recent economic downturn did not alter the trend of older workers increasingly being in the labor force; rather, it appears that this remains the trend, as more opportunities for older workers exist and there is a greater necessity for them to remain in the labor force to accumulate sufficient or adequate resources for retirement. As many workers have found, the road to and through retirement is not always smooth," the report said.
