In the mid-1980s, around 25% of American men aged 65-69 were actively in the workforce while today, 40% are working. Go slightly younger (60 to 64 years old) and you will find that 63% are gainfully employed or engaged in business. Figures are similar for women, with the Bureau of Labor Statistics noting that by 2024, women over 65 will make up roughly the same percentage of the female workforce as older men will of the male one. The main reason is economic; if in the past, companies paid out lump sums upon an employee’s retirement, today, most employees are contributing part of their salaries to their retirement, and this means they have to work longer to enjoy financial stability.
The good news is that there are many benefits to staying in the workforce longer, one of the most important of which is that it keeps the mind young.
How much can Americans save by working longer?
Older Americans who work longer can benefit by receiving larger social security benefits, to name just one advantage. Between the ages of 62 and 70, a worker’s benefits can increase by 6.5% to 8.4% for every year of delay in receiving them. Thus, an eligibility for $1,000 per month at the age of 62 would skyrocket to $1,7000 if a worker postponed retirement to the age of 70. As noted by the Stanford Institute for Economic Policy Research, delaying retirement for three to six months has the same financial impact as saving an additional one percentage point of your labor earnings for three decades.
An increased lifespan
A happy life is not just about money; it is also about health. A study carried out by researchers at Oregon State University found that retiring early can be a risk factor for earlier death. Meanwhile, adults who retire one year after they turn 65 have an 11% reduced likelihood of death from all causes. The authors believe that the power of later retirement is twofold: an improved economic situation, and a more active social life.
Work and a senior’s social life
Work enables us to form close bonds that can be difficult to maintain when we retire – often because of distance and a lower level of social interaction. A 2011 study carried out at Rush University Medical Center noted that social interaction is key for seniors, because it decreases the risk of cognitive decline by challenging older adults to participate in complex interpersonal exchanges and improving the activity of neural networks. Another (2017) study on nearly half a million self-employed workers found that delaying retirement reduces the likelihood of developing dementia and Alzheimer’s disease, since work makes demands that keep our brain sharp and agile.
The economic situation may be forcing us to delay our retirement, but luckily, there are many benefits that come with remaining longer in the workforce. Working longer offers us a chance to interact regularly with co-workers and clients. It also keeps our mind sharp and may even help us us live longer.