Why Are Fewer Americans Wanting to Retire? 

In fact, the share of people 75 or older still in the workforce nearly doubled during this period and is now at just under 10%. And this trend has been true for both men and women. Among men aged 75 years old or older, 8.1% were still working in 2000, but rose to 12.2% in 2020. The share of women working within the same age group increased as well, from 3.6% to 6.8%.

Workers of every race are staying on the job longer. The proportion of African Americans still working after age 65 increased from 11.6% in 2000 to 18.6%. For Hispanics, this ratio increased from 12.2% to 19.5%. The share of Asian Americans over 65 rose from 13.7% in 2000 to 21.7% today.

Why are so many older Americans working ever further into their twilight years? You might think it is because we are all living longer. However, life expectancy tables from the Center for Disease Control do not quite support such big increases in the share of working elderly.

Back in 2000, the average 65-year-old American could expect to live another 17.6 years. This increased slightly to 19.4 years in 2017. This ten percent increase in life expectancy among 65-year-olds would explain only a portion of the 36% increase in their participation in the labor force. A further complication to this longevity theory is that the share of older women staying in the workforce rose more than the share of older men. Yet the increase in female life expectancy over this time (8.4% more years) was relatively lower than the increase in life expectancy for men (13%).

Perhaps more older Americans are working because their income has fallen over time? Another U.S. Census Bureau report reveals that the ratio of people over 65 and living in poverty has fallen from 9.9% in 2000 to 8.9% in 2019. Fewer older minorities live in poverty as well. The share of African Americans over 65 living in poverty fell from 21.8% to 18% during this period. Hispanics over 65 living in poverty fell from 21.8% to 17.1% while Asian Americans held steady at 9.3%.

The real answer may be a lack of financial preparedness. The National Institute on Retirement Security examined 2017 U.S. Census Bureau data. Their analysis revealed that the median retirement account balance among all working individuals was… $0. Nada. Zilch. In other words, the middle-income earner in the U.S. did not even have a positive balance in a private retirement account or employer-funded retirement program. Their study also found that four out of five working Americans have less than one year’s income saved in a private retirement account or secured in an employer pension plan.

The fact that a greater share of older Americans may be remaining in the labor force out of necessity would not necessarily be captured in commonly used demographic statistics. After all, poverty is measured by one’s income flow while savings is measured by one’s stock of wealth. Today’s working elderly may be earning income that keeps them above the poverty line today, but they may also have insufficient savings to remain out of poverty when they can no longer physically work in the future.   

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