The Labor Force Is Aging

The Bureau of Labor Statistics (BLS) forecasts that, by 2022, the number of workers over 55 will grow to 25% of the labor force, up from the 15% it was in 2006. These workers will be in service sector jobs, where most of the job growth will occur. Many of these service sector jobs, such as grocery clerks, waitresses, and substitute teachers, that were previously held by young people will be held by the post-retirement age worker.

(Source: BLS 2004-14 Labor Market Projections)

But Older Workers Won't Retire

BLS reported that, rather than retiring outright, over one half of older workers are continuing to work in “bridge” jobs. These jobs are being taken by those without pensions, and those who are either lower income or much higher income. Those at the lower ends are taking bridge jobs because they can’t afford to retire, and those at the upper end because they want to explore career options that are of more interest to them.

Why? They Can't Afford It

Those at the lower end can’t afford to retire because Social Security is facing shortages, meaning lower benefits especially for those who retire earlier.

Companies are offering 401(k)s instead of pensions, increasing risk for workers. The risk is because many workers don’t contribute to their 401(k) plans and those that do don’t understand the risk inherent in the stock market. They may find that their investments have disappeared if the market takes a significant downturn when they are ready to retire.

In addition, private savings are at their lowest levels since the Great Depression. After the stock downturn in 2000, many people who were burned by the stock market put their money into their homes. Many Boomers lost their retirement savings and their homes during the 2008 financial crisis. Those who lost their jobs as well had no choice but to take whatever they could to survive. 

The BLS predicts that, as this trend continues, “traditional retirements will be the exception rather than the rule."   Article updated July 22, 2014.