Many people, including me, have suggested that working longer could be a panacea that would solve a lot of the problems facing the United States, correcting the imbalance between workers and retirees (the so-called “dependency” ratio), providing more savings for retirement and care costs, and reducing the number of years that retirees draw down on their savings to pay their living expenses.
You Can’t Postpone Retirement If You’re Not Working
In my latest Risking Old Age in America podcast, Beth Truesdale of the W. E. Upjohn Institute for Employment Research and co-editor of Overtime: America’s Aging Workforce and the Future of Working Longer, argues that this is something of a pipe dream because so few people are able to work even into their early 60s. “If you want to work into your late 60s or beyond and can work into your late 60s or beyond,” she says, “go for it.”
But the reality is that only about half of Americans have steady employment throughout their fifties. They leave the workforce due to health, care obligations, and job loss. About 35 percent work intermittently in their 50s and 15 percent don’t work at all.
The loss of secure employment continues to accelerate. Very few people keep working until age 70. “You can’t postpone retirement unless you have a job from which to retire.”
For people to have a shot at continuing to work into their 60s, Truesdale says, they need the kinds of jobs and supports that will enable them to keep working through their 50s. For the most part, older workers need the same things younger workers need: fair pay, paid family and medical leave, and jobs with steady schedules.
Raising Social Security Retirement Age Cut Benefits to Those Who Need Them Most
In terms of the coming debate over how to shore up the Social Security trust fund, Truesdale argues against raising the full retirement age. What she calls the “paradox of working longer” is the that those people who can least afford to retire are also the most likely to be unable to keep working, whether due to their health or broader economic changes. White collar jobs are less punishing physically than blue collar jobs and have fared better through globalization.
Raising the full retirement age for Social Security from 67 to 70 would in effect be a 20% cut in benefits across the board. “Those who now can’t work until 67 are no more likely to be able to work to age 70,” Truesdale says. “They’ll just suffer a benefit cut.”
Truesdale points out that the current Social Security tax cap is at about $170,000 a year of income. As a result, people making $1 million a year pay the same as those making $170,000 a year. One initiative that would help balance the books would be to raise this cap so those who can afford to contribute more do so.
Finally, Truesdale wants people who are having trouble staying employed or who don’t have enough saved for retirement to know that you’re not alone. They should not feel shame. “It’s not you; it’s the system.”