For many older Americans, the concept of retirement has a different meaning in 2017 relative to thirty, twenty, or even just ten years ago. The traditional notion of retirement at age 65 is becoming a thing of the past—and a growing number of older adults are opting to stay in the workforce into their late 60s and beyond. While the implications of a greying America are cause for concern in some areas, there are many reasons to see this population as an asset to the knowledge economy and a unique opportunity to generate significant value for communities nationwide.
Population data show seismic shifts in the demographic character of the workforce over the last three decades, and reflect a changing reality for older Americans reaching retirement age. From May 2000 to May 2016, the percentage of American adults over 65 claiming either part-time or full-time employment grew from just under 13 percent to almost 19 percent, according to analysis by the Pew Research Center. This increase seems to be long-term and shows no signs of plateauing or reversing. Last month, the U.S. Bureau of Labor Statistics reported that between 1990 and 2010 the percentage of adults over 65 in the workforce grew at a rate of 3.4 percent per year, while the percentage of those under 65 rose by just 0.9 percent over the same period.
The implications of these changes are numerous, and some have naturally generated concern among U.S. families and policymakers.
The growing financial difficulty that mature workers and retirees face, for instance, cannot be an issue that lawmakers overlook. A TransAmerica Center survey published last year revealed that less than half (46 percent) of the retirees who participated believe they’ve put aside a large enough retirement nest egg. Many older adults simply can’t afford to stop working, and the growing number of Americans who are opting to stay in the workforce illustrates the few options they have for future financial security.
There are, however, a number of reasons to view the increasingly large number of Americans entering retirement as a positive trend. Our aging population is bringing forth a historic level of social and human capital, and the expanding cohort of Baby Boomers reaching old age brings the most educated generation in history into a stage of life where their robust and diverse skillsets offer enormous value to employers and their communities. As Laura Carstensen of the Stanford Center for Longevity noted in a recent New York Times article, “in jobs where knowledge is the basis, you don’t see a performance deficit with age.” This is especially true in industries like law and business, in which experience and accrued knowledge add greater value to organizations.
In spite of the talent and experience older workers offer employers, aging Americans face many hurdles in the labor force. Less computer literacy and familiarity with digital technology are often-cited impediments. Another principal obstacle is the perception among many companies that retaining mature talent is more expensive than hiring younger employees. Some groups, including the AARP, are working hard to combat this stereotype. State and local governments are also considering policies to address this issue, and have experimented with different regulatory approaches to reduce the cost of older workers for employers—for instance, through restrictions on the rate at which insurance companies can increase health care premiums based on demographic characteristics of a firm’s employees.
A large network of academic research centers, advocacy groups and professional societies is also sharing a number of ideas with potential to keep older adults engaged in activities that will generate mutual benefit for elders and society at large. The Society for Human Resource Management, for instance, offers several ‘toolkits’ for governments and robust literature on how to prepare for an aging workforce. Leadership and volunteer opportunities with nonprofits, churches, and charitable organizations–as they always have been—are likewise strong channels through which older adults leaving the workforce can stay engaged and contribute value to their communities at the same time.
Public agencies should take a collaborative approach to addressing the issue of the aging workforce and seek input from organizations like those above, as well as private sector employers, to ensure new policy reflects the realities facing this diverse group of stakeholders. For our 2017 program focused on aging policy, we’re taking a similar approach in gathering some of the most creative ideas to address the labor force issues related to the maturing population. We hope the results of this initiative will help to better inform the policy discussion between these groups.