The 65+ Workforce Is Soaring

Source:  SoFi.com

By: Nancy Bilyeau

Date: December 15, 2023

Older Workers More Than Tripled Since 1980s

For a growing number of American workers, reaching retirement age isn’t synonymous with leaving the workforce anymore.

Roughly one in five Americans aged 65 and older were employed in 2023. And while older full-time workers earn less than those in the age group of 25-64 — $58,600 compared to $73,700 — their earning power has grown over the past decades as well.

At first glance, this might look like the consequence of the Baby Boomer’s demographic heft and rising costs — as people grow older, they might try to shore up their retirement income. But a new Pew Research Center study  shines a different light on this trend.

Who Is Leading the Trend?

Women with college degrees are leading the trend of older workers. They represent 46% of all workers aged 65 and older. By comparison, their share was 40% in 1987 and 33% in 1964.

In addition, older women who are working today are more likely than their predecessors to have a four-year college degree: 42% do, compared with only 12% of working older women in 1987, according to the Pew study.

And even though older workers make 80% of what’s earned by their younger counterparts today, the gap was once much wider. In 1964, the average annual earnings of workers aged 65 and older were only 19% of the average earnings of workers ages 25 to 64. By 1987, the earnings gap had narrowed to 56%.

The fastest-growing section among workers are, in fact, those 75 and older, according to the Bureau of Labor Statistics. Some 9% of adults aged 75 and older are employed today, about twice the share who were working in 1987.

The Future of the Retirement-Age Worker

Funding your retirement requires planning ahead. With Social Security funding an increasingly small chunk of what people need to retire (in spite of annual cost of living adjustments), saving through other channels, including 401(k) or IRAs, is increasingly important. Funding a certain lifestyle in retirement can also motivate people to keep working past the traditional retirement age, especially since older adults are healthier and less likely to have a disability than in the past, according to Pew.

And the demographic is growing, too: The Bureau of Labor Statistics projects the group of adults 65 and older to increase from 7% of the labor force today to nearly 9% in 2032, with their labor force participation rate expected to grow to 21% at that point.