Will You Work Past Age 65?

By Al Chingren - March 22, 2019

Retiring at age 65 may soon become a thing of the past. In fact, 31 percent of workers expect to retire at age 70 or older.1 Is it by choice or a necessity? The reasons can vary, but what may be most important is that you plan ahead so you get to choose.

Many who decide to keep working are concerned about having enough money. Others may simply want to stay active. There can be many factors to determine if you should (or need to) work longer. Let's dive into a few of the most common.

Living and Working Longer

People can expect to live longer. Below are life expectancy statistics for men and women today.

Age today Can expect to live
55-year-old man 25 more years
55-year-old woman 29 more years
65-year-old man 18 more years
65-year-old woman 20 more years

Source: Social Security Actuarial Life Table. The period life expectancy at a given age for 2015 represents the average number of years of life remaining if a group of persons at that age were to experience the mortality rates for 2015 over the course of their remaining life.

However, it's not just about age. People can expect to be healthier, too. Researchers have found that a significant number of older Americans, including those age 85 and older, are healthy . However, other research  suggests that baby boomers ages 51 to 61 may be more likely to live with a chronic condition, like diabetes.

Still, health is one factor why a growing share of Americans are working beyond their 65th birthday. The number of men ages 65-69 in the workforce declined to its lowest point in 1985 and has steadily risen to 36 percent in 2018. For women in the same age range, the amount staying in the workforce increased to 28 percent in 2018.

The Rising Number of Americans Age 65+ Still Working

Source: Bureau of Labor Statistics, Current Population Study , 2018. 70+ group is an average of the 70-74 and 75 and older age groups.

Work Longer to Boost Savings

If your retirement savings are not where they should be, or you're concerned about covering unforeseen expenses, working longer may be a good option. For example:

  • You may be able to get health insurance from your employer. This likely would be at a reduced cost versus what it would cost to buy on your own.
  • You can delay taking Social Security benefits. You can get credits for delaying the benefit and considerably improve the benefits for your surviving spouse if you're married.

Debt Demands Some Work Past 65

Another contributor to postponing retirement may be debt. Researchers found a "dramatic increase" in the amount of debt carried by older Americans   nearing retirement (ages 55 to 61), resulted from them "having purchased more expensive homes with smaller down payments than previous generations." Their research showed:

  • The percentage of income that goes to debt payments climbed from 14 percent in 1992 to 50 percent in 2010.
  • The median amount of debt rose sharply between 1992 and 2004, from $6,800 to $31,200 in 2015 dollars.
  • In 2018, the average boomer carried $36,000  in debt.

Retire at Your Right Age

"Choosing" to work longer versus "having" to work longer will tell two very different stories for those who stay in the workforce beyond age 65. Planning now may help you retire when you want to, not when you have to.

Here's are the first few steps to help you begin:

1. Picture It

One of the most important, but often overlooked, steps in preparing for retirement is to visualize what you want it to look like and to prioritize your goals. That includes answering questions such as: Where do I want to live? Will I travel? What can I leave my family?

2. Pay for It

Establishing a clear picture of your future can help more accurately assess your needs and create a realistic retirement budget. This is a critical step in retirement planning and can help you understand how much you may need to save. It can also help you decide which goals you may need to defer or eliminate.

3. Position Your Savings

The third step in planning is to determine how you will invest the money you put aside for retirement and when you will start drawing from it and other retirement benefits. Questions you need to consider include:

  • What are the types of investment vehicles to consider?
  • How do I best allocate my investments?
  • How to draw down my investments? Is 4 percent a general target?
  • When should I collect Social Security?
Al Chingren
Al Chingren

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    Will You Work Past Age 65?

    Some expect to stay on the job longer to save more for retirement, pay down debt and have extra money for daily expenses.

      1 Employee Benefit Research Institute, 2018 Retirement Confidence Survey.

      The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.