Oldest baby boomers remain in workforce at highest rate in decades
The majority of older Americans are opting not to retire – instead remaining in the workforce beyond the age of 65.
New data from the Pew Research Center shows that nearly 30 percent of baby boomers between the ages of 65 and 72 were either working or looking for work in 2018 – higher engagement rates than what was observed among previous generations at the same age.
In fact, the last time engagement was that high for this specific demographic was in the 1950s.
The trend is consistent for both men and women. As of 2018, 25 percent of women age 65 to 72 were participating in the labor force, along with 34 percent of men of the same age. Older men have not participated at those levels since the early 1970s, according to researchers.
The baby boomer generation typically refers to those born between 1946 and 1964.
Labor force engagement was also high among younger baby boomers. About two-thirds of individuals age 54 to 64 were in the labor force in 2018.
Those numbers represent an increase in what has been documented throughout recent years: The number of Americans above traditional retirement age (65) remaining in the labor force, either part-time or full-time, was nearly 19 percent in 2016, up from 12.8 percent in 2000.
As previously reported by FOX Business, retirement savings challenges are one reason Americans might be opting to stay in the labor force.
According to a report from the Government Accountability Office (GAO), nearly 30 percent of people over the age of 55 have no retirement savings and no pension plan. Meanwhile, the personal savings rate has declined from 14.2 percent in 1975 to 6.8 percent in 2018.
Insufficient savings, combined with low wage growth – which the GAO says remains near 1970 levels – rising health care costs and longer life expectancies are combining to create trouble for many American workers hoping for a full retirement.
Working longer, however, can lead to higher Social Security benefits. Waiting until “full retirement age” (70) to claim Social Security will result in larger checks.
Delaying when you collect, if possible, can actually increase your benefit by as much as 32 percent.
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There's another reason why waiting to retire could be worth it: As the number of older workers in the labor force increases, so do their wages. Data from the U.S. Census Bureau showed that between 1994 and 2005, average monthly wages for those over 65 increased by 80 percent, to $4,092. That far outpaced any other age demographic.