March 24, 2020
If People Can Work Longer, They Will
A majority of adults believe there’s better than a 50-50 chance they will still be working full-time after age 65, a new study found.
The evidence suggests this goal is fairly realistic.
In the study, adults ranging in age from 18 to 70 were asked to rate themselves on a 1-to-7 scale for 52 different cognitive, physical, psychomotor, and sensory abilities that determine their capacity to work. These abilities run the gamut from written comprehension, pattern recognition, and originality to finger dexterity, reaction time, and vision acuity.
Of course, physical abilities decline with age. But when the researchers compared older and younger participants in the study, they found that many self-assessments of their abilities were very similar. For example, psychomotor abilities – such as hand steadiness, manual dexterity, and coordination – were at peak levels for the people in their 30s. But these abilities were only slightly diminished for the people in their 60s. And despite concerns about cognitive decline among older workers, the difference between 50- and 60-year-olds was minor.
The heart of the research, funded by the U.S. Social Security Administration, was determining whether each individual’s distinct set of abilities affected his or her work capacity, as well as how long and how much the individual intends to work as they age. This issue is important, because extending a career is a powerful way to improve one’s financial security after retirement.
To determine this capacity for work, each individual’s self-assessed abilities were matched up with the skills required to do nearly 800 different U.S. occupations. The researchers then calculated the percentage of these occupations each person would be able to do, given their education and training level.
Here are three of the central findings:
The more occupations people can do, the more likely they were to say they would work past 65.
Workers over 60 with a higher capacity to work said they would be more likely to remain employed even after 70.
One in four of the retirees with a very high capacity for work would consider “unretiring” and returning to the labor force.
This study seems to indicate that if older people are capable of working, they are more willing to do so.
To read the study, authored by Italo Lopez Garcia, Nicole Maestas, and Kathleen Mullen, see “Latent Work Capacity and Retirement Expectations.”
The research reported herein was performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement Research Consortium. The opinions and conclusions expressed are solely those of the author(s) and do not represent the opinions or policy of SSA or any agency of the federal government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report. Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof.
Working longer has both financial and health benefits if one is capable of doing it. The financial benefits are obvious: postponing retirement leads to much higher Social Security benefits, which go up 8% for every year you delay until age 70. You delay having to withdraw from any other retirement accounts and may even add to them. You have fewer years you need to make those retirement funds last.
Health is improved by social interaction, and for many, work provides much of this.
Unfortunately, many are in less than ideal health as they age and/or may be in a physically demanding job they have trouble performing, so this “ideal” may not be practical.
I’ve known people who had no choice but to retire due to their occupations. It’s not easy being a 68-year old lineman, for example, or a trucker with a heart arrhythmia. Indeed, I have seen many people die before reaching the early retirement age of 62.
Another problem I’ve seen is when one spouse is seriously ill (one person I know is a many-years quadriplegic), and their medical care is so expensive they must rely on medicaid because their standard insurance/medicare won’t cover it all. The ill person’s spouse had to give up their job because their income did nothing to improve their situation–instead it would have caused the ill person to be disqualified from their coverage due to income restrictions. The worker was told the solution was to divorce the ill spouse of 40+ years, something they would never do.