More Americans are working well into their 60s and 70s than in the past — often because they have to — according to one retirement expert. And he expects that trend to continue.
In 2018, 27% of workers 65 to 74 held a job, up from 17.7% in 1998, according to the Bureau of Labor Statistics.The labor participation rate for those 75 and over has almost doubled, increasing to 8.7% in 2018 from 4.7% in 1998.
“Are Americans saving enough for retirement?” said Bryan Bibbo, a financial adviser at JL Smith Group Advisor, recently on Yahoo Finance. “I think that’s the real big thing going on here.”
The average 60- to 70-year-old American has saved only $194,000 and many are relying on just Social Security income, Bibbo said. That’s forcing some to turn to work on golf courses or in retail for additional income. Others are becoming consultants for their previous employers.
Bibbo expects older Americans to continue to stay in the workforce longer, because they’re living longer and those born after 1960 won’t be entitled to full Social Security benefits until they reach 67. The BLS forecasts that almost a third of 65- to 74-year-olds will be working in 2028.
“Retirement age of 65, that’s kind of a thing of the past,” he said. “A lot of people are being more and more cautious today around that 65 marker.”
Avoiding working in retirement
For those who don’t want to work in their 60s and 70s, Bibbo recommends taking advantage of catch-up retirement contributions. If you’re 50 or older, you can put an additional $6,000 into your 401(k) over the $19,000 annual limit for 2019.
You can also put in $1,000 more in your traditional or Roth IRAs, if you’re 50 and over. The annual limit for everyone else is $6,000 for 2019.
“So that’s a huge advantage,” Bibbo said. “Being able to get that little bit of extra money in there 10, 15 years before retirement allows you to save a lot more.”
Denitsa is a writer for Yahoo Finance. Follow her on Twitter @denitsa_tsekova.