Tom Murphy
RedwoodAge.com

The percentage of older Americans still in the workforce has reached its highest level in at least a generation as those over 55 strive to make up for the lack of pensions and medical benefits. Some also seem to be working longer because they want to.

Overall, the percent of workers over 55 in the workforce jumped to 38 percent from 29.4 percent in 1993. The study examined data going back to 1975, when the rate was 34.6 percent.

The study released Tuesday by the nonpartisan Employee Benefit Research Institute confirms earlier research that showed older workers are choosing to stay in the workforce, often by starting new careers.

The trend is likely to continue as baby boomers who rely on their own 401k's instead of defined benefit plans retire in coming years, assuming the burden of paying for medical insurance as well as living expenses.  The 78 million American boomers now range in age from 43 to 61.

"I think the reason the margin is going up is because some of those people are already being affected," Craig Copeland, who authored the study, told RedwoodAge.com.

"While not all of those who expect to work until older ages will be able to do so for health reasons or lack of job availability, many Americans age 55 and older will postpone retirement,"  Copeland wrote in his report. "And, in fact, since 1993, there has been a clear upward trend for this group to stay in the workforce.

"In addition to the need for money, many of today's older Americans appear to be motivated by a desire to work longer, and they are likely to continue in the workforce as jobs remain available to them," he added.

Women Pinched
The report also suggests that women are increasingly feeling an economic pinch as they age.

For men over 55, the percentage working was 44.9 percent last year, compared to 32.3 percent for women. But the percentage of men was slightly lower than the rate in 1975, while the percentage for women had climbed from 23.1 percent 31 years earlier.

The increase for women is being driven almost exclusively by their rising role in the nation's workforce, said Copeland.

Also curious is the role that education plays in whether people work longer. Contrary to common thinking, the more educated people are, the more likely they are to continue working past 55.

But that may not be a matter of choice. Part of it may be due to the fact that workers with fewer skills can be most easily replaced. And Copeland noted the less-educated workers tend to do more physical labor that they may not be able to perform in their later years.

Copeland said the number of workers leaving the workforce is far higher than the number entering it, so there will be demand for older workers for the foreseeable future. Said Copeland: "These workers are needed."