Should You Be Retired At 75?

Over at the New York Times, there’s a piece called “Toil and Trouble: Growing numbers of the elderly have or want jobs. What will that mean for younger workers?

If there were a Republican President, this would be a scathing piece about the horror of the old people having to work because the POTUS screwed up the economy. However, since Obama’s President, the piece is a good bit more neutral. Here are some of the details:

When economists and policy types and members of Congress talk about older Americans working past normal retirement age, an increasing theme of late, we tend to think they mean a few years beyond age 65, right? Working until ages 68 or 69, that is – maybe even 70, though that might be pushing it.

We know that the work force is graying, but except for outliers, your Willie Nelsons or Robert Duvalls, most of us don’t picture people staying on the job when they’re pushing 80. In fact, as readers were quick to comment when Sherisse Pham recently wrote here about her 73-year-old father, a supermarket greeter, we see age discrimination as a potent barrier, even as we appreciate the continuing engagement that employment might bring.

Recently, while mulling this issue (count me among those who hope to keep working), I was intrigued to hear from the ace data-crunchers at AARP that in the past 20 years the oldest group of workers, the 75-plus work force, has increased enormously. Seventy-five! And not only because there are simply more people that age around, but also because a higher percentage of them are participating in the labor force.

“There are some pretty striking changes going on,” said John Rother, AARP executive vice president for policy.

I’ll say. Sifting through the data from the Bureau of Labor Statistics, AARP analysts found that the number of workers ages 75 and older (meaning they’re employed or seeking employment) has grown to about 1.3 million in 2009, from just under half a million in 1989. That’s still a small sliver of the population over age 75, just 7.3 percent, but a big jump from the 1989 labor force participation rate of 4.3 percent.

We know that a growing proportion of this work force, almost 44 percent, are women. And a just-released Census Bureau report adds this surprising fact: of workers ages 75 to 84, more than 42 percent hold full-time jobs.

People having to work at 75? On sone gut level, this FEELS wrong, doesn’t it? Those are your golden years! You’re supposed to be retired, living in Florida, and enjoying the good life — or at least kicking back, taking in your Social Security, and playing a little Bingo now-and-again.

So, here’s an important question: Why do we have this expectation that we should be retired at 75? Simple: Social Security kicks in much earlier than that. So mentally, we PRESUME that if the government starts paying out full Social Security benefits, then that’s the age most people should retire. That age for most Americans on Social Security today is 65, although it’s slowly moving upwards. That’s pretty good given that the average age is 77.8 years. In other words, most Americans are living 12.8 years after “retirement.”

But when the program was begun back in 1935, the average person never lived long enough to collect it. Keep in mind that even in 1940, the average American only lived to 63.6 years of age. In other words, if we still worked the same way today as we did back then, everyone except the rich would still be working at 75 because most Americans would be dead before they were eligible for Social Security.

Is it a better world today with all that retirement time? The temptation is to say “yes,” but since we’ve already spent every dime of the money that was paid into the program, we’re just starting to go out of control as we’re rounding Dead Man’s Curve. We haven’t gotten to the point where the average person will have to pay a significantly higher percentage of his income into the program for less benefits than the program pays out today. We haven’t gotten to the point where people who rely on Social Security see the amount they’re being paid out significantly cut. It may seem politically unthinkable that those things are going to happen, but it’s just a matter of time because despite what you hear from the government, the program is flat busted, it’s paying out more money than its taking in, and the problem is going to consistently get worse from here on out until most of the Baby Boomers have died off.

So, should we be retiring at 75? Give it another decade or two and I suspect the answer to that question will have changed a great deal.

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