American seniors employed at record-high levels
As the record-long U.S. economic expansion continues, more seniors than ever appear to be putting off retirement.
According to data from Deutsche Bank Securities chief economist Torsten Slok, the employment to population ratio for those aged 65 and over hit 20 percent in July – a record high.
Employment among the demographic has been on an upward trajectory for about 20 years.
As previously reported by FOX Business, 30 percent of baby boomers between the ages of 65 and 72 were either working or looking for work in 2018 – higher engagement rates than what was observed among previous generations at the same age.
The baby boomer generation typically refers to those born between 1946 and 1964.
The trend was consistent among both men and women.
Retirement savings challenges – as life expectancies increase – are one reason Americans might be opting to stay in the labor force.
According to a report from the Government Accountability Office (GAO), nearly 30 percent of people over the age of 55 have no retirement savings and no pension plan. Meanwhile, the personal savings rate has declined from 14.2 percent in 1975 to 6.8 percent in 2018.
Insufficient savings, combined with low wage growth – which the GAO says remains near 1970 levels – rising health care costs and longer life expectancies are creating trouble for many American workers hoping for full retirement.
Working longer, however, can lead to higher Social Security benefits. Waiting until “full retirement age” (70) to claim Social Security will result in larger checks.
Delaying when you collect, if possible, can actually increase your benefit by as much as 32 percent.
There’s another reason why waiting to retire could be worth it: As the number of older workers in the labor force increases, so do their wages. Data from the U.S. Census Bureau showed that between 1994 and 2005, average monthly wages for those over 65 increased by 80 percent, to $4,092. That far outpaced any other age demographic.
Overall, the U.S. economy continues to show signs of strength. In July, the unemployment rate held steady at 3.7 percent – hovering near a 50-year low.
Slok noted that layoff data showed few consequences from an ongoing U.S. trade war with China. President Trump announced this week that he would impose a 10 percent tariff on the remaining $300 billion worth of goods coming into the U.S. from Beijing.