THE TREND toward abolishing mandatory retirement continues. By federal law, most private-sector workers are protected against forced retirement before age 70; federal employees can work until any age. Beginning with California in 1978, states have been moving to eliminate any mandatory retirement deadline, and yesterday New York became the 12th state to make such legislation effective.

When Congress raised the retirement age from 65 to 70, it seemed a sound thing to do even though there were some social and economic implications to be concerned about. What if large numbers of people elected to stay in the work force another five years? Would they displace younger workers or cause significant declines in productivity? Would it be possible to adjust employee benefit packages to accommodate older workers? Would health insurance costs soar and absenteeism increase?

In practice the new limit has worked well. There have been few, if any, problems of this kind. Most Americans still want to retire relatively early, particularly those whose work requires physical exertion. In 1981, for example, only 7.3 million of the 36 million Americans over 60 were still working.

Those who took a different course and continued to work did some good not only for themselves but also for the national coffers. For one thing, older workers do not draw Social Security. They continue to make contributions as well as pay income tax. In many cases they postpone receiving private pension benefits; in other instances, particularly in the case of women who enter the work force later in life, those extra years on the job enable them to earn substantial retirement benefits and preserve their independence.

Every one of us has worked with a few people who should have retired at 32 and has known others who were full of energy, insight and creativity at 85. Mandatory retirement at any age is not a concept that can be applied fairly or with any sense to the entire population. State laws allowing more flexibility and individual choice are a good thing.