In part, the climb in older workers is due to the growing numbers of older people, but the statistics show as well that a growing proportion of older people are interested in work.
The percentage of people 55 and older who are working or seeking work has climbed from 38.9 percent to 40.3 percent since the start of the recession, while the percentage of workers between the ages of 25 and 54 who are working or seeking work has dropped from 83.1 percent to 81.5 percent.
The number of younger workers are declining, but workers age 55 and older are increasing.
The notion of retirement is relatively new in American history, and the boom in older workers reveals that it continues to evolve.
Until the end of the 19th century, people generally worked as long as they could, historians said. By 1880, however, the percentage of older male Americans in the workforce had begun a decline that would last more than a century. People were retiring before they were forced to for physical reasons. In part, this was due to generous Civil War pensions for Union soldiers, according to historians, and in part because the nation’s rising wealth allowed people the opportunity to save for retirement.
“By the later 19th century, households were actually able to save some money for retirement,” said Jon Moen, an economic historian at the University of Mississippi. “That continued for decades.”
But in the 1990s, as Moen, then with the Atlanta Federal Reserve Bank, had predicted, the proportion of older Americans in the workforce began a steady upward rise that is now visible in the surprisingly strong showing of older workers during the recession.
The rise was fueled at least in part by gains in longevity. In addition, many jobs today are less physically onerous and make it easier for older people to perform them, experts said.
But there were two other key changes to the economics of retirement that had occurred by that time.
Changes to Social Security rules, some of them in 1983, made retiring at 70 more attractive: Those who retired later earned larger payments.
And about the same time, companies began a profound shift away from offering employees pension plans, which offered certainty and set specific ages for retirement, to 401(k) and other investment plans that relied on workers to set aside money and invest wisely.
Between 1983 and 2007, the proportion of workers with old-age benefits covered only by a “defined benefit” or traditional pension plan plummeted from 62 percent of workers to 17 percent, according to the Center for Retirement Research. Meanwhile, over the same period, the percentage of workers covered only by defined contribution plans such as 401(k)s climbed from 12 percent to 63 percent.
The shift to 401(k) plans put the burden of saving and investing for retirement on workers, and many were unable to do so. During the recession, moreover, some dug into their accounts to make it through bouts of joblessness.
Although traditional pension plans, which often began benefits at age 65, had helped establish that as the “normal” age of retirement, the shift to personal savings plans appears to be making the “normal” age of retirement more ambiguous. Workers must decide when they have enough set aside, while also forcing them to assume the risk of living longer. Although pensions continue steadily until death, personal savings accounts are finite and force workers to spread out their savings over an unknown number of years of life.
“People don’t have the incentive to retire early anymore, and they look at their nest egg and say, ‘I’d really benefit from working a few more years,’ ” said Sewin Chan, a professor of public policy at New York University.
Not everyone 55 and older is lucky enough to find a job, however. In fact, there are far more older people who want to work than there are jobs available. Due in part to the surge of older workers, the unemployment rate for people older than 55 has roughly doubled since the start of the recession, from 3.2 percent in December 2007 to 6.2 percent in December 2011.
Daniel Barnum, 73, is an architect in Houston, one of the owners of a 13-person firm.
Once he reached 65, he said, he decided to keep working because, then unmarried, he didn’t relish the prospect of hanging around the house. Plus, he said he hadn’t been wise enough to start early to set aside money for retirement.
“It would have meant life without vacations for the most part, certainly European vacations,” Barnum said.
He just got back from three weeks on the Danube with his wife, 62.
He does, however, expect to call its quits once he turns 75.
“There is within me a desire to slow down and take life a little easier, relax a little bit,” he said.
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