The good news is 62- to 64-year-olds experienced the largest increase in jobs between 2007 and 2014. The not-so-good news is that many of those jobs are not of the upscale, high-paying variety.
New research from the Center for Retirement Research at Boston College offers insights into the type of work that older people are securing today:
• The jobs are high on service and low on physical labor
• Service jobs: managers, sales supervisors, accountants, real estate sales, property management
• Low-skilled jobs: truck drivers, janitors, nursing aides, child care, retail, cab driver
• Valued skillsets: dependability, outdoor work
• Jobs that pay around 10 percent less than those of younger workers
A survey of households and individuals from the latest census found that, between 2008 and 2012, older workers (62+) with a college degree had less than a 50 percent chance of finding work, while those without a college degree had only a 35 percent chance.
During an economic downturn, it’s not uncommon for employers to lay off employees, and many older workers end up getting more pink slips than others. One reason may be because they tend to earn more, so some workplaces may be inclined to hire younger, lower-paid employees to improve profit margins.
While this may sound like age discrimination, lawsuits along those lines have become harder to win. In 2009, a court ruling made it more difficult for workers to sue for age discrimination. Plaintiffs must now prove that advanced age was the main reason for being let go — not just a contributing factor.
Even aging workers who continue working at the same company will likely find their income doesn’t increase as much as it did when they were younger. A 2015 Federal Reserve study found that, from ages 45 to 55, wages decrease by 9 percent; they then drop another 9 percent from ages 55 to 65.
The job situation may be more challenging for women, in part because they tend to live longer than their husbands and are therefore more likely to spend some part of their retirement living on one income. According to U.S. Labor Department projections, about one in seven women work past age 65, and within eight years that number will rise to nearly one in five.
Working longer isn’t all bad, from a financial or social standpoint. It enables people to save longer, give their retirement assets more opportunity to accumulate, decreases how long they’ll have to live on their retirement savings and enables them to save money via employer-based health insurance. Plus, work provides cognitive and social engagement, which for many is a lot more fun than sitting at home or even traveling alone.
Interested in reading more? Here are some articles that may be of interest to you:
[CLICK HERE to read the article, "More Older People Are Finding Work, but What Kind?" from The New York Times. Aug. 18, 2016.]
[CLICK HERE to read the article, "For Older Workers, Getting a New Job is a Crapshoot," from CNBC. July 7, 2016.]
[CLICK HERE to read the article, "Why Women Over 50 Can't Find Job," from PBS. Jan. 14, 2016.]
[CLICK HERE to read the article, "How Older Women are Reshaping U.S. Job Market," from The Wall Street Journal." Feb. 22, 2016.]
[CLICK HERE to read the article, "5 Tips to Help Women Work Longer," from Forbes. July 3, 2016.]
Raymond C. Lantz, Jr. is the president and founder of USA Wealth Group, Inc. Ray has many years of experience advising clients in retirement and sophisticated tax planning strategies, multi-family and commercial real estate projects, and legacy planning. Ray is a graduate of Clark University, holds a law degree from Boston College, and a master of laws in taxation from Boston University. You can hear him every Sunday on Money Wise with Ray Lantz on WBSM 1420AM or on the Radio Pup app.