According to a recent report1 from money manager United Income, for the first time in 57 years the participation rate in the labor force of retirement age workers has cracked the 20% mark. Inadequate retirement savings and sky-high health care costs combine to make leaving the workforce a scary idea.

I also think that a retirement age of 65 is outdated. When President Roosevelt signed the bill enacting Social Security the average life expectancy in this country was around 61 years. Life expectancy now in the US is around 78.7 years. Having just turned 64, I’m not ready to retire in a year or two. I want to keep doing what I’m doing, and I don’t think I’m alone. So, while inadequate retirement savings and high health costs may be keeping some retirement age people in the workforce, many more are staying because they are healthy and want to keep doing their jobs. Debbie and I had breakfast with one of my cousins a while back who is a year younger than me. I asked him about his retirement plans and his comment was, “Why would I want to retire? I feel I’m at the top of my game right now.” I can relate.

The downside to this phenomenon is that it slows the upward progression of younger people in the workforce. Advancement becomes more difficult if there are fewer openings due to people working longer. I know that both my son and daughter are looking at working into their 70’s as a real probability. So, because of their longer working lives, the promotions will come, maybe just not as soon as other generations.

Another reason for increasing longevity in the workforce is the actual jobs people are doing are, in a lot of cases, less physically demanding. Again, when Social Security was set up, we were a labor-intensive manufacturing society. Agriculture was also a big industry. The jobs were physically demanding, and older workers simply couldn’t keep up with younger workers so companies couldn’t afford to keep the older worker. Forced retirement was a common event and social security provided the safety net for these workers. We are now a service economy and those jobs are more mentally demanding than physically demanding, so you can stay productive longer.

Having to work, and wanting to work, during your retirement years are two very different things. I’ve been telling clients for years that retirement is about choices. If you save and plan properly, you have more choices, such as working or not. How much do I work? Can I have a second career rather than staying at my current job? If you don’t save and plan properly, then you will not have as many choices on how you spend your retirement years.


These are the opinions of Mike Berry and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.

Mike Berry is a Registered Representative offering securities through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Legacy Wealth Management, LLC and Cambridge are not affiliated. Cambridge does not offer tax advice.

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