More people are working well past retirement age. It’s not easy

[JohnS]

Even though this is an article aimed at American citizens, I can't help but feel that this issue is relevant to people from other countries in the world. Where I live, in Australia, it used to be one's rite that one would reach an age, retire and receive a pension. More and more, I'm finding people who are 'semi-retired' rather than 'fully retired'. Perhaps this is your story...and perhaps it is not. Then again...I have friends who have retired and work casually because they want to.

More people are working well past retirement age. It’s not easy

By Nicole Goodkind, CNN Sun April 14, 2024

 

 

Hope Murray sits with some furry friends in San Diego, California. Courtesy Hope Murray

 

New York CNN  — Hope Murray retired in 2013 after a 50-year career that ranged from game show producer to Hollywood party planner to casino executive.

She settled into a life of golf, game nights and pickleball in her San Diego community, her daughter living nearby.

Then things got more expensive. Gas was nearly $5 a gallon, medication costs were adding up, the grocery bill was increasing.

So she downsized, stopped driving as much and waited longer between haircuts.

But she could no longer afford some of her medications. “It got kind of scary. I needed some extra money coming in,” said Murray.

So last October, at the age of 80, Murray ended her retirement and got a job giving out samples at Costco.

She likes observing the people – some go grocery shopping in heels and a full face of makeup and others wear pajamas and slippers. Some people take one sample and others gobble three or four.

“It just comes into my checking account every other week, and I can pay for everything,” she said of her $18-an-hour paycheck. “My plan was to put the checks into a savings account, but it didn’t work out that way. I had to use it for cost of living.”

At 81, she isn’t sure if she’ll be able to go back into retirement. “I don’t know how long I’ll be working. It just all depends,” she said.

Murray isn’t alone.

Americans over 75 are the fastest-growing age group in the workforce, more than quadrupling in size since 1964, according to the Pew Research Center. Forecasters expect that cohort of older, working Americans to double over the next decade.

‘A tale of two retirements’

There are a number of reasons why Americans are working later into life.

People are living longer and are more likely to be healthy into old age.

The nature of work has also changed. “More people are working at desk jobs that don’t require much physical labor,” said Gal Wettstein, a senior research economist at the Center for Retirement Research at Boston College. “That contributes to people’s ability to work longer.”

Zoom, and the post-pandemic boom in remote work also makes it easier for older Americans to remain in the workforce, he said.

But while a 65-year-old is more likely to apply for a desk job or remote work than something that requires heavy lifting, said Monique Morrissey, a senior economist specializing in retirement security at the Economic Policy Institute, about 50% of older workers still have physically demanding jobs.

For many people, though, working into their golden years simply comes down to lacking enough money to stop working and keep a roof over their heads.

“It’s a tale of two retirements,” Morrissey said. While plenty of older Americans are working good jobs later into life by choice, others have struggled to find their place in the workforce.

Social Security payments still provide about 90% of income for more than a quarter of older adults, according to Social Security Agency surveys.

But without intervention, the Social Security trust fund will be depleted by the mid-2030s, meaning that only a portion of retirees’ expected benefits will be paid out. Lawmakers have faced a decades-long political stalemate on how to fix it.

Over the years, retirement plans evolved away from pensions that encourage workers to retire by 65. About half of private sector workers were covered by those so-called defined-benefit plans in the mid-1980s, but by 2022 only 15% had them.

What’s left is the 401(k), which 68% of private industry workers have access to, but only 50% use.

Anything it takes

But sometimes even a pension isn’t enough.

Heidi Brockway, 66, retired from a 30-year career in early education in 2019, right before the Covid pandemic. She had a small pension from the school district she worked for but soon realized it wouldn’t be enough.

She spent the next two years applying for jobs and hitting wall after wall.

“I was applying to jobs that I was perfectly qualified for, if not overly qualified, and I would just get zapped time and time again,” she said.

“I finally gave up in Los Angeles because it was just not happening,” she said. She sold her house and moved with her husband to Southeast Florida, where her sister and nephew lived.

“I was thinking maybe there would be more opportunities there. And maybe the economy was a little bit more friendly to older people,” she explained.

After 11 months of looking in Florida, Brockway was offered a job as an aide at a nearby preschool.

“I now sweep, clean toilets, mop and empty trash for $13.40 an hour and all the pride I can swallow. But I am employed at least,” she said. “I was an early education teacher for 30 years. Now I clean a preschool. But I can afford groceries.”

Unemployment in the US is near historic lows, sitting at 3.8%, and employers are taking a closer look at people who used to be at the end of the hiring line, said Morrissey. But older workers are often left out of the employment boom.

“It’s a particularly strong market for certain workers,” she said. “That’s people who are changing jobs, younger workers and non-college educated workers.” Older workers tend not to change jobs, and they’re more likely to have a college degree.

A lot of the jobs that older workers do get, she said, involve a salary cut or a lack of benefits.

Confronting ageism

It’s illegal in the United States to discriminate against an older worker because of their age. The Age Discrimination in Employment Act (ADEA) forbids age discrimination against people who are age 40 or older in the workplace.

But there’s a high burden of proof, and it’s even more difficult for an older job seeker to prove that they didn’t get a role because of their age.

A recent survey by AARP found that about two-thirds of adults over the age of 50 think that older workers face discrimination in the workplace. Nearly 90% of those workers think ageism is commonplace.

Bob Vaughn turns 65 this June and has been looking for work since he was laid off from his role as an IT consultant at age 63.

“I started interviewing immediately,” he said. Many interviewers praised his experience and seemed interested in offering him a job. But ultimately, he said each ended in an iteration of the same comment: We have decided to move in a different direction.

“I think the 800-pound gorilla is that I’m 64 and a half,” he said. “And as colleagues of mine would say, age discrimination is rampant out there.”

Researchers have done what they call “audit studies,” in which they send the same resume to employers and only alter the applicant’s age, said Wettstein, of the Center for Retirement Research. Older applicants got fewer callbacks.

“Some of it might be ageism, just an aversion to hiring older people,” said Wettstein. “Some of it might be more ‘rational’ in the sense that employers might be worried that older workers wouldn’t be as productive or wouldn’t be as profitable.”

The Center for Retirement Research has found no evidence that older workers are less productive overall. They did, however, find that they were more expensive because of higher earnings expectations and higher healthcare costs.

Vaughn met his wife, Mary Susan, in high school, but they didn’t connect romantically until their 15-year reunion. They hit it off and were married six weeks later.

Over 31 years of marriage, they’ve raised children, helped with grandchildren, and took in all four of their parents, helping support them through retirement. The expenses added up, but Bob’s job and Mary Susan’s work as an artist and blogger kept them afloat.

When Vaughn was laid off in 2022, his family sold their home near Charlotte, North Carolina, and downsized to an apartment near their daughter and newborn grandson in Asheville.

The plan was to eventually build a home on three acres of land they’d purchased in the Blue Ridge Mountains.

But work has been hard to come by and so has money. “Little did we know that interest rates were gonna go through the roof, inflation, all that kind of stuff,” he said. “And it made us hit the brakes.”

They’re stuck in their apartment until the lease is up in August and are struggling to afford the rent. “We could not have anticipated how much rent and storage costs would be when we sold our home,” said Mary Susan. “The monthly expenses are greater than the mortgage on our home was.”

They still plan on building the home, eventually. But they’re going to try to do it themselves to save money.

Adapting to an older workforce

Diane Reiter is 72 and looking for work.

“Unfortunately my memory is not as good as it used to be, and therefore my options are limited,” she said. “It’s super frustrating because I know where I came from.”

Reiter spent the majority of her career running book fairs with her late husband around the Chicago area. When Amazon took a big bite out of their business in the early 2010s, she started working in accounts payable for local companies.

Now she’s struggling to find a job that works for her.

“I never thought I’d be in the position where I couldn’t retire,” she said. “This is just unfortunate.”

 

Diane Reiter poses with a painting she made in her home in the suburbs of Chicago. Courtesy Diane Reiter

As more people than ever need to work longer to support themselves, workplaces will need to begin to adapt to older workers’ needs, according to the World Economic Forum. Worker health and wellness will become more critical than ever, as will investing in retraining the workforce as technologies change. New models of hybrid work that smooth the transition to retirement will need to be created.

“Keeping older people in the labor force requires more than bringing the matter to the public’s attention,” wrote researchers at Brookings Institution in a recent report. There needs to be political and employer support for a “massive public education campaign to make the business case for older workers,” they said.

In the meantime, Reiter’s children and grandchildren live nearby, so she has a good family support system. She’s also discovered a passion for painting and has sold some of her work.

“It’s a very fulfilling life,” she said. “But I don’t have a ton of savings left. It’s pretty bittersweet. It’s kind of scary, so I have to do something.”

Source: https://www.cnn.com/2024/04/14/economy/working-past-retirement-age/index.html

[VeguerosMAN]

If you don't own an asset when you retire then it's going to be a struggle in the US even when you are getting monthly SSN checks. 

[ImTripN2]

Good article, although the one word that was missing is Inflation.

In an effort to anticipate future costs I recently took a close look at our family expenditures for the last 4 years. Having maintained pretty much the same lifestyle over this period I was a surprised to find that there has been a 20 – 30% increase in basic expenses in each of the last 4 years, so we’re spending approximately  twice as much as we did in 2019.  At that rate it won't be long before we face some hard choices, not only for us but our kids and grandkids will be affected as well. Fortunately, I am in position where I can still work as much or little as I like so it’s going to be a matter of choice, not necessity like anyone living on a fixed income.

[Jack]

The 401K bit backfired on us. It was designed to be a supplement to a pension and allow workers to save a bit more for retirement, without penalties. Companies saw it as an opportunity to shift the pension burden to the employee. If the employee contributes X the employer will contribute X or Y - not always matching funds and limited. The employer considers that to be their "contribution" to a pension. If the employee can't put aside funds the employer can choose to provide nothing (this is changing now, just as of this year) towards pension. Also the 401K funds will rise and fall with the economy and are not fixed or constantly growing.

[TacoSauce]

10 hours ago, ImTripN2 said:

Having maintained pretty much the same lifestyle over this period I was a surprised to find that there has been a 20 – 30% increase in basic expenses in each of the last 4 years, so we’re spending approximately  twice as much as we did in 2019.

Is that increase entirely due to price hikes in the Habanos lineup? 😅

[BrightonCorgi]

I'm going to miss my own funeral as I'll be working that day.

[ImTripN2]

18 hours ago, TacoSauce said:

Is that increase entirely due to price hikes in the Habanos lineup? 😅

Ha! Truth be told, I haven't spent a dime on CCs for several months. I don't mind spending more coin on luxury items as long as they provide some value for the extra money but CCs are just priced way more that they are worth IMHO. 1750 usd for COROs!! 450 for Monte 4s ? Bullshit.

Fortunately I have been buying for years, but when my humidor is empty that will be the end.

There are plenty of NCs that agree with me, and of course the Desnudos are at the top of that list. 

[jazzboypro]

This also applies here in Canada. I am not sure I will be able to retire. I'm 59. Fortunately, I like my job and  it does not require any physical strength and for now I work from home (I'm in IT). As said by others, inflation and the fact that we live longer and healthier lives makes it hard for a lot of people to retire at an early age (65 or less). What worries me the most (especially in my line of work) is the amount of job opportunities what will be lost to AI (this has already begun). So on one side people need to work for a longer period of time and on the other side their will be less job opportunities because of AI (and other factors like ageism no matter what the law says about it). It's not going to be easy.

[BrightonCorgi]

4 hours ago, jazzboypro said:

So on one side people need to work for a longer period of time and on the other side their will be less job opportunities because of AI (and other factors like ageism no matter what the law says about it). It's not going to be easy.

Ageism is rampant in the IT world.

[ha_banos]

17 minutes ago, BrightonCorgi said:

Ageism is rampant in the IT world.

Not what I want to hear right now.... Will report back. Soon I hope...

[Chas.Alpha]

9 hours ago, BrightonCorgi said:

I'm going to miss my own funeral as I'll be working that day.

Yep.😔

[Squarehead]

I retired at age 65 after 50 yrs in the workforce and I finally could work in and outside of my house which I had neglected for quite some time due to shift work. It took me about 2yrs to do what needed to be done and I was quite happy.The mortgage was paid off so what else did I want? Then, exactly 2yrs after my retirement my phone rung and I was offered a job as a driver for a chain of car dealerships. It sounded interesting and I accepted the job and I figured that I can do that for 1 1/2 to 2 years, not knowing that this would last for 10 1/2 yrs. It was a lot of fun and a lot of driving picking up cars all over Ontario which the owner of the dealership bought. A slow drive meant about 600km a day up to 1600km a day. After 10 1/2 yrs and nearing 78yrs of age, I finally retired for good. Money was not the issue but more of something to do. Of course the money came in handy as cigars are not exactly the cheapest hobby. My wife worked in retail until she was almost 72, not that she had to but that she enjoyed it. So, now we're at home and do the things we want to do and when. It is not easy doing nothing as you never know when you finished with it and nobody telling you when to take a coffee break. With our pension we're getting by as the house is paid off.