More seniors expected to work longer, many out of financial need

Senior citizens are fast becoming a major presence in the American workplace.

Last year, a quarter of all 65- to 74-year-olds were still in the workforce, according to stats the Bureau of Labor Statistics. By 2028, that share is expected to rise to a third. Similarly, 1 in 8 seniors who are 75 and older will be holding a job almost a decade from now, more than the 1-in-11 in 2018.

Despite fears from younger workers, the increase in older colleagues will help fill holes left in the labor market down the road, experts say. 

But the gains also reflect a sobering reality.

Civilian labor participation by age 1996-2026

While some seniors may choose to work because they want to, many others will do so out of financial necessity after failing to sock away enough for retirement now.

“People are afraid they haven’t saved enough to maintain their lifestyle for a lot longer than they anticipated,” said Mark Silverman, CEO of Amava, a platform connecting retirees with flexible jobs. “A lot of people in this generation started work anticipating retiring in their late 50s or early 60s. They weren't thinking they would live to 90 or 100."

Job necessity

Nearly a third of baby boomers have no money saved in retirement plans, with mid-boomers having the lowest balances of all, according to the latest figures from the  Stanford Center for Longevity

Even worse, mid-boomers who are currently 62 to 68, carried $120,000 in debt on average in 2014, a much higher level than previous generations.

Senior citizens may work in retail, either out of necessity or desire, as they age. (Photo: Melanie Stetson Freeman/The Christian Science Monitor via Getty Images)

Another financial concern for older Americans is health care. They “didn't predict the enormous increases in health care costs when they thought about saving for retirement,” Silverman said.

Older colleagues

Older workers who keep working could also face pushback from their younger colleagues.

Almost 2 in 5 young workers see people staying longer in the workforce as a negative, while 45% of U.S. workers have witnessed or experienced age discrimination at the office.

“There is a widespread misperception that older Americans staying in the workforce longer hurts promotion opportunities and may hurt wages for your workers,” said Dr. Andrew Chamberlain, chief economist at Glassdoor.

Instead, younger people are staying in school longer and seniors are filling roles that are left vacant. The percentage of workers aged 16 to 19 participating in the labor force has decreased by 14% in the last decade.

More older Americans are expected to stay in the workforce over the next decade. (Photo: Tim Boyle/Getty Images)

“Older workers being in the workforce actually is growing the economic pie so much more,” Dr. Chamberlain said. “That ends up having no effect on wages or job opportunities for young people.”

Encore careers

Whether by choice or by need, older people may the best options for their so-called encore careers or jobs in health care, professional services, hospitality, and retail, Dr. Chamberlain said.

Leveraging their past work experience, they may consider consulting opportunities and bring their expertise and personal connections to the new role.

Other younger seniors may move into care-giving roles, Dr. Chamberlain said, serving elderly Americans. After light training, they may find ample opportunities in in-home care and nursing-home roles.

“Many more seniors are [also] working in retail and customer service,” he said, “because very young workers aren’t in the labor force as much as they used to be.”

Denitsa is a writer for Yahoo Finance. Follow her on Twitter @denitsa_tsekova.

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