Working Seniors On The Rise: 1 in 5 Americans Over 65 Still Employed, Earnings Grow Significantly

There was a time when reaching the age of 65 meant one thing: retirement. While this is still the case for many Americans, it doesn't hold true nearly as much as it once did.

According to a Pew Research Center study, approximately 19% of Americans ages 65 and older were employed in 2023. That may not sound like a large number, but it's nearly double the number of those who were working 35 years ago. 

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But there's something else you need to know.

In addition to an increased number of older people remaining in the workforce, their earning power is also rising. 

Consider this. In 1987, the average worker aged 65 or older earned $13 per hour. That number increased to $22 per hour in 2022. 

Here are some additional ways that today's older workforce differs from past generations.

  • Work hours and employment status: Older workers now are more likely to be employed full time, with 62% working full time today compared to 47% in 1987.
  • Educational attainment: A higher percentage of older workers have a four-year college degree today (44%) than in the past (18% in 1987), aligning them with the education levels of workers ages 25 to 64.
  • Employer-provided benefits: Older workers today are more likely to receive benefits like pension plans and health insurance from their employers. For instance, 36% of workers age 65 and older have access to retirement plans (either traditional pensions or 401(k)s) through their employers or unions, an increase from 33% in 1987. In contrast, younger workers’ access to such benefits has declined.

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What's The Reason For This Trend?

Money is a driving factor for many people working past age 65. Some like earning a greater wage today than in the past. Others are doing so out of necessity.

But money isn't the only reason for this trend. 

  • Today’s older Americans are more educated: Compared to older workers in the past, today's older working adults have higher education levels correlating to increased employment opportunities.
  • Older adults today are healthier: They're also less likely to be disabled, leading to longer working lives.
  • Retirement planning has shifted: The transition from defined benefit plans, like traditional pensions, to defined contribution plans, such as 401(k)s, removes incentives for early retirement.
  • Policy adjustments: More specifically, the increase of the full retirement benefits age from 65 to 67 has motivated older adults to work longer.
  • The job market has evolved: Today, more roles are less physically demanding and offer more independence and flexibility, making them more suitable for older workers. 

This trend is well worth monitoring, with many people asking the same question: Will more older Americans continue to work in the future, or will a reversal occur?

Consulting a financial adviser can help you better understand how much money you need to comfortably retire. A professional can offer personalized advice to help you make the best possible decisions.

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*This information is not financial advice, and personalized guidance from a financial adviser is recommended for making well-informed decisions.

Chris Bibey has written about personal finance and investment for the past 15 years in various publications and for various financial companies. He is not a licensed financial adviser, and the content herein is for information purposes only and is not, and does not constitute or intend to constitute, investment advice or any investment service. While Bibey believes the information contained herein is reliable and derived from reliable sources, there is no representation, warranty or undertaking, stated or implied, as to the accuracy or completeness of the information.

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