The stats speak for themselves: Americans don't retire on time. Around 19% of Americans 65 or older are still active in their field according to last quarter's U.S. Jobs Report. This trend doesn't only apply to only Americans either, it seems that sooner or later we will have to say goodbye to 65 as the age of retirement. Due to changes in the social structures of society, longer life expectancy, and smaller pensions, we might all have to work much longer than before.
According to the U.S. Jobs Report, 32% of Americans 65-69 are still working, and 19% of those age 70-74 have yet to retire. The U.S. Bureau of Labor Statistics predicts that these numbers will continue to grow in the coming years: by 2024 36% of Americans from 65-69 will still be working, up from just 22% in 1994. A poll by the Employee Benefit Research Institute (EBRI) shows that close to 79% of employed Americans plan to continue supplementing their income with work after their official retirement.
There's many reasons for this shift in thinking. The largest factor is personal finances and insufficient retirement benefits: many Americans haven't had, and still don't have, the savings to retire at age 65. According to a survey by GOBankingrates.com 7 out of 10 Americans (69%) has less than 1,000 dollars in savings. Many have low pensions due to changes in their retirement plans, or plans that do not guarantee a sufficient amount of savings (such as defined contribution plans). On top of that, many Americans lost their retirement savings or their employment in the last financial crisis: some are still in debt to this day. Some, of course, don't want to retire because they simply love their profession. Some choose to work part time or start their own businesses. But for many more, retirement is looking like a hardship rather than a well-deserved rest after many years of work.
How can one spend their retirement? That was the question put to the 1,000 people who took a Ipsos/USA TODAY survey. 55% of Americans plan to travel, 52% plan to spend more time with family, and the third most popular option was spending time volunteering, pursuing their hobbies, or working. Another survey by Employee Benefit Research Institute asked "Is $1 million enough to retire on?" Almost 37% of those surveyed said that that amount would be enough to take care of their home, family, and lifestyle costs. Yet in 2007, only 19% agreed that $1 million would be enough for retirement. It seems that Americans are increasingly concerned about their financial situation after retirement.
The longer Americans live, the longer they will draw on retirement benefits. This, coupled with a low fertility rates, means less money flows into retirement benefits, yet more is paid out to current retirees. This unfavorable situation leads to an increase in subsidies to the pension system for current retirees and a rise in public debt. Of course there are certain benefits for continuing to work after retirement, or to put off retirement for a certain amount of time. Beyond continuing to add to your finances, work allows one to continue to pursue their professional goals and bolsters a feeling of of purpose, in the workforce and beyond.