Nearly double the amount of U.S. workers ages 65 and older are employed today compared to 35 years ago, finds a new report by the Pew Research Center.
The growth of older workers is likely linked to the sizable Baby Boomer population, many whose higher education levels, health factors, and retirement readiness have incentivized them to work for longer periods of time, notes the report.
“Numbering roughly 11 million today, the older workforce has nearly quadrupled in size since the mid-1980s,” writes the Pew Research Center. “The increase is driven in part by the growth of the 65-and-older population. The bulk of the Baby Boom generation has now reached that threshold.”
These professionals are more likely to have a four-year college degree than workers in the past, as 44% of older workers today report having at least a bachelor’s degree, compared to just 18% over thirty years ago.
Not only is the number of older workers in the U.S. rising, but their wages and hours are increasing, as well. The Pew Research Center found that in 2022, the typical worker aged 65 or older earned $22 per hour, up from $13 in 1987. Professionals are also working more hours compared to previous decades, as 62% are now working full-time, compared to 47% in 1987.
The transformation of retirement plans has likely influenced some to rethink their long-term strategy. The shift towards defined contribution (DC) plans like 401(k)s and removal of defined benefit (DB) features including pension plans has deterred workers from retiring in their 60s.
Whereas traditional DB plans encouraged workers to retire at a specific age, retirement plans now put the onus of savings entirely on the employee, thereby forcing some to work for longer periods in an effort to save more.
An increase in the age to begin receiving Social Security benefits, from 65-years old to now 67, have also influenced workers to delay retirement, adds the Pew Research Center.
As a result of these factors, older workers account for 7% of all wages and salaries paid by U.S. employers and will likely continue to grow. Future projections by the U.S. Bureau of Labor Statistics (BLS) show that adults ages 65 and older will make up 8.6% of the labor force by 2032, with older adults anticipated to account for 57% of labor force growth over this period.
SEE ALSO:
- State-Mandated IRAs Not Crowding Out Private 401(k)s: Pew Research
- Millennials Surpass Older Workers with Retirement Savings
- Inflation Causing Many Older Workers to Postpone Retirement
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
