Baby Boomers Are Finding More Reasons to Retire Later

Since the 1980s and 1990s, there have been substantial increases in the number of seniors staying in the labor force through previously regular retirement ages, according to Wellesley College researcher Courtney Coile. She calls this one of “the most significant labor market trends” in the United States.

According to her research, as many as 1 in 3 men in their late 60s choose to remain in the labor force. Older women are not quite at the same level as their male counterparts, but their presence is continuing to grow more prevalent and has closed the retirement-age gap notably since the 1980s.

When examining the reasons that could be driving this shift, Coile identified several factors that are contributing demonstrably to the way that Americans are approaching retirement. One of these is the general increase in college graduation rates, since college graduates generally stay in their jobs longer than people who enter the workforce without college degrees. Since more people are graduating from college, more people are also working longer.

Reforms to the Social Security program in the U.S. may also be driving this change, including changes in the age that workers become eligible to receive their benefits, incentivizing later retirement by giving larger monthly benefit payments for people who delay taking those benefits after reaching their full retirement age. Also playing a role is an end to the temporary withholding of some program benefits that had been in place for people in their late 60s who worked while collecting Social Security program benefits.

The changes in employer retirement plans over the last few decades have also played a role in establishing the trend of later retirement, particularly as pensions have increasingly been replaced with plans similar or equal to a 401K plan offered by a prospective retiree’s place of work.

There is also more coordination between married couples, in terms of taking optimal advantage of their individualized retirement options. Coile’s research indicates that older spouses are beginning to delay their own retirements until their younger spouse also retires so they can enter their post-work years at the same time.

The general nationwide shift from the prevalence of manufacturing jobs to service jobs has also allowed people to work longer, since service jobs are not as physically taxing as manufacturing jobs. All of these, Coile says, are contributing to baby boomers’ retirement ages increasing as they adapt to the changes made to the economy over the course of the last 30 years.

For more, read the Boston College’s Center for Retirement Research blog post on the topic of the research, as well as Courtney Coile’s full research paper.

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