Working Past Age 65 May Seem Like a Great Idea …

Employees behind on their retirement saving may plan to fix this by continuing to work past retirement age. But is that plan realistic? The Center for Retirement Research at Boston College (CRR) says maybe not. At least not for less-educated groups—ironically, those who tend to earn the least and could use extra work years the most.

For that reason, CRR says, in its research paper “Are Older Workers Capable of Working Longer?” any plans policymakers may have to further push back Social Security’s eligibility age thresholds would be ill-advised.

New trends have emerged, the paper said, such as deteriorating health status—notably, more obesity and less activity—and rising incarceration rates among less-educated individuals, often Black individuals who are aging in prison. It noted additional factors that influenced its findings, such as the Great Recession and subsequent recovery, growing inequity and increased “deaths of despair”—many from opioid overdoses among less-educated middle-aged workers.

So it aimed to determine “how long will people be able to work, and how does that vary by education, race and gender?” Drawing data from the National Vital Statistics System (NVSS), the American Community Survey (ACS) and National Health Interview Survey (NHIS)—as to deaths, disabling physical, emotional or mental health issues, and institutionalization in a prison or nursing home—it calculated working life expectancy at 50 for men, women, non-Hispanic white individuals and Black individuals, plus segmented them for high or low education.

The results show, for starters, that the conditions statistically fostering working past retirement age ended in 2010. The basis had been working life expectancy—in practice, disability-free life expectancy, which enabled a person to work—increasing alongside life expectancy. Since then, while life expectancy has continued to grow, albeit at about half the pace of from 2000 through 2006, work life expectancy has not kept up—“such that every year of life expectancy gained is associated with only about a half year of work capacity.” 

The gap is especially apparent when it comes to less-educated white and Black men. CRR predicts that 26% of “low-education” white men will be unable to work to 67, their full retirement age (FRA). It’s worse for the average Black man, who will experience “a step back in retirement security,” CRR said, as he can’t expect to work past age 63 yet will live longer. Specifically, CRR found, of the Black men who can work at 62, 10% will be unable to work at 64, and 51% will need to stop short of their FRA.

Low-education Black women, on the other hand, fare better, the study showed, than men—about 62% will be able to work to age 67 to claim Social Security. Of highly educated Black men and women, 59% and 72%, respectively, should be able to work into their 70s, CRR found.

The report statistics are good news for well-educated white and Black employees who would like to keep working—and saving—as long as possible.

The report’s authors, Laura D. Quinby and Gal Wettstein, senior research economists at CRR, point out that most earlier health studies used to measure ability to keep working considered only “extreme forms of functional limitation,” whereas the CRR study goes well beyond this, counting any “physical, mental or emotional problem that keeps you from working” in its statistics.

This also could suggest that the post-2010 trend, which failed to account for potentially many who had retired due to lesser disabilities, may not have been as pronounced as it appeared.