Never Too Old: The Merits of Delaying Retirement
By Wealth of Geeks
In January 2023, more than one million French citizens formed nationwide demonstrations against new pension reform law proposals. Activist groups organized the marches following the Borne government’s plan to increase the retirement age from 62 to 64, which came into law the following April.
The United Nations predicts France’s national life expectancy will rise from its current 83 years to 86 years in 2050. However, when Pierre Mauroy’s socialist government lowered the retirement age to 60 in 1982, the French lived 75 years on average, which cost the French taxpayer less to maintain. This arrangement meant French citizens could enjoy a “golden decade” of retirement before old age caught up — this is no longer the case.
The long life conundrum
Living longer is becoming more expensive. French Labor Minister Olivier Dussopt used this as the nucleus of his argument for extending French workers’ years of duty. Conversely, opponents of lengthening one’s working life would argue that living longer is the by-product of early retirement. But should people retire early — especially considering how much more a person usually earns in the later years of their career?
A recent Forbes report using U.S. Bureau of Labor (BLS) data shows that working Americans between 45 and 64 years old make almost twice that of a worker in their early twenties. Moreover, the average hourly rate drops significantly from 65 years — after most people have left the workforce. It poses the question as to whether retirement is a good idea for some people, especially those in good health who are still highly active.
A step too far
A National Bureau of Economic Research report found in 2017 that a cohort of American male workers was dying at 62 years old — when Social Security eligibility begins. The report also shows that male death rate increases come from retirement’s subsequent lifestyle readjustment. The change in living standards and the breakup of longstanding daily routines can prove too much for some.
A 2021 Journal of Epidemiology & Community Health review found a closer association between mortality and on-time retirement than with early retirement in Dutch pensioners. This outcome suggests that those who can afford premature retirement have more financial resources and better healthcare options. For those less fortunate, the inverse may be the case. What is clear, however, is a correlation between earning good money and living longer.
Ten years earlier
Financial Times columnist Simon Kuper discusses the merits of a longer working life in an opinion editorial. Retirement should be for those who want it, though Kuper believes it depends on the person’s socioeconomic background. A life working in stock trading is much different from back-breaking years spent in a coal mine, sewer, or lumber yard. In short, Kuper feels those on the lower rungs of the social ladder should get to retire ten years before those at the top.
However, his judgment is predicated on the understanding of two jobholder categories: highly skilled, well-paid workers or business owners and the contrasting groups. The former usually studies into their third decade, choosing careers with more autonomy, growth, and reward. For the latter who didn’t have the same career success, retirement comes as an end to a tough working existence. Some of those in the former pool usually don’t wish to retire; these high-functioning humans are usually very fit, intelligent, and enterprising.
The Great Unretirement
The World Economic Forum (WEF) champions the existence of an older workforce, as mapped out in its “Great Unretirement” article. The first wave of the global COVID-19 lockdowns forced many older adults to retire for various reasons, namely work-related changes and perceived threats to wellness. An additional 3.3 million more people were retired within 18 months of the first wave than in January 2020: numbers much higher than usual.
The American Association of Retired Persons ( AARP ) says that many Americans are now “un-retiring” to bolster their income or grow their social circle. However, while women prefer extra work to help offset inflation, male retirees choose to do so for personal or social development and possibly delay physical decline, which accelerates after the sudden halt in a full-time working routine.
A Comfortable Twilight for Some
For those who are happy in their careers or who have saved enough for compound interest to give them a comfortable twilight, the upside to retiring late or un-retiring is persuasive, though only if conditions are right. Investopedia warns that anybody thinking they will be able to keep earning past retirement age may need to adjust their expectations.
The Employee Benefit Research Institute (EBRI) reported in its 2023 “Retirement Confidence Survey” that nearly three-quarters of people expected to work for pay after retirement. Only 33% of other participants had earned money since retirement.
The Gig Economy
Nonetheless, the number of retirees earning a side salary will surely increase in the coming years. Retirees will learn new ways to bring in revenue through the growing opportunities available; more tech-literate generations will reach retirement age. The current decade heralds a boom in extra revenue generation, and while the “ gig economy “ has hitherto been associated with youthful entrepreneurs lounging in coffee shops as their revenues grow, this trope is set to evolve.
A New Outlook
Older workers have many options and can benefit from hundreds of online and app-based work. One selling point for some retired workers is flexibility — side hustles offer ideal ways to earn supplementary cash on a fixed retirement income, sometimes several at once, and workers can choose when they clock in. The Association for Entrepreneurship says this new outlook will transform retirement for generations to come.
