Working: The New Retirement's
Effect on the Economy
An online marketing company serving “today's dynamic population of leading edge Baby Boomers and over 40 set” concluded, “Most 40+ still plan to work in some capacity after retirement. This is especially true for skilled workers with higher education …they continue to work for personal fulfillment.” Yet according to that marketing company's survey, being fulfilled at work is not widespread; only 35% of forty- to fifty-four-year-olds and 44% of workers over age sixty-five find their jobs rewarding.1 Similarly, 55% of older employees say they are postponing retirement because they find their jobs interesting. In contrast, 75% report “not having sufficient financial resources” as a reason to continue working, and 60% say they need to work for medical benefits, according to the Conference Board's 2006 survey—the board is a research organization sponsored by large American corporations.
The elderly are increasing their work effort more than at any other time since World War II. Older people are postponing retirement or returning to work after retiring for many personal reasons, including the two that are this chapter's focus—to make up for lost income and to do what they can in response to diminished expectations for income security. That the elderly enter the job market when unemployment rates are rising and wages are stagnating suggests that they are pushed rather than pulled into the labor market. Despite what the increase in work effort means to an individual, the increase in labor force participation of workers over age fifty-five is likely destabilizing the economy because of the details about the timing of their increased work effort. As DC pensions make up more retiree income, people's pensions are more exposed to the ups and downs of the financial markets. The problem is that when the market is down, work effort is up, and when the market is up— and employers are scrambling for workers—workers are retiring with their fattened 401(k) accounts.