Why More Seniors Are Staying in the Workforce and How It Shapes Your Retirement Strategy

Katie Reilly is an Associate Editor specializing in Trading and Investing at ZAMONA, bringing over a decade of journalism expertise. She holds a bachelor's degree in English and political science from the University of North Carolina at Chapel Hill, with a minor in business journalism.

The number of Americans aged 65 and older participating in the workforce has nearly doubled since the late 1980s. In 2023, over 11 million seniors were either employed or actively seeking jobs, with those aged 75 and older representing the fastest-growing segment, according to Pew Research Center.

For many, this extension of working years is driven by choice, fueled by better health, increased education, and a desire to stay active and engaged. In 2019, more than half of working adults over 65 held college degrees—a dramatic rise from just 25% in 1985.

However, economic realities compel others to continue working. Insufficient retirement savings, shrinking pension plans, and the rise of 401(k) accounts with less guaranteed security have made financial necessity a powerful motivator to keep earning.

This article explores the reasons behind this workforce shift and offers actionable advice to help you plan confidently for your retirement years.

Key Insights

• Older Americans are increasingly remaining active in the workforce, reflecting significant demographic and cultural changes.
• The trend embodies both positive lifestyle choices and challenges related to retirement security.
• While some seniors work by preference, many do so out of financial need due to inadequate retirement resources.

The Dynamics of an Aging Workforce

The rise in senior employment partly results from the large Baby Boomer generation reaching retirement age but also reflects evolving attitudes toward work and financial realities. Age-based mandatory retirement is largely illegal in the U.S., yet many older workers still face subtle pressure to leave the workforce prematurely.

Advancements in healthcare and increased life expectancy make longer careers feasible, and technology has eased physical job demands. Yet, fewer safety nets exist today than in previous generations, with Social Security’s full retirement age increasing from 65 to 67 and a shift from secure pensions to individual 401(k) plans moving retirement risk onto workers.

Age discrimination remains an issue, creating hidden barriers for older adults seeking employment or advancement.

Strategic Retirement Preparation

The COVID-19 pandemic shifted many seniors’ expectations about work, with fewer anticipating full-time work beyond age 62, especially among women and lower-income groups. This suggests that some older adults continue working out of necessity rather than choice.

Whether you plan to retire early or work into your 60s and beyond, consider these tailored strategies:

Early Career Tips

• Start maximizing retirement contributions early, leveraging employer matching programs fully.
• Build savings and investments beyond traditional retirement accounts for greater financial flexibility.
• Prepare for multi-generational workplaces and potential delays in career advancement due to older colleagues extending their careers.

Mid-Career Strategies

• Consult a financial advisor to evaluate your retirement readiness and adjust your plan proactively.
• Maintain continuous health insurance coverage and explore disability insurance options to protect against unexpected medical expenses.
• Consider downsizing your home earlier to reduce costs and boost savings.
• Explore career pivots that may offer sustainability and longevity.

Approaching Retirement Age

• Investigate phased retirement or flexible work options with your employer to transition smoothly.
• Utilize catch-up contributions for retirement accounts to maximize savings.
• Seek out employers and industries that value experience, offering opportunities for older workers.
• Consider relocating to regions with a lower cost of living to stretch retirement funds further.

Related Articles

How Working Later in Life Can Enhance Your Well-being

Retirement Planning Tips for Dual-Income, No-Kids Couples

Final Thoughts

While many seniors find joy and fulfillment in continued employment, economic pressures mean others must work longer than planned. Starting retirement savings early, investing wisely beyond standard accounts, and regularly consulting financial experts are essential steps toward a secure retirement. As you near retirement age, maximizing catch-up contributions and exploring flexible work options can provide greater financial stability and peace of mind.

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