Longevity Bound to Make Work a Requisite for Retirees

Experts say in the future, it may not be uncommon for people to work until age 70 or 80, requiring new thoughts about work, as well as finances.

Longevity will inevitably make work a requisite for retirees in the coming years, and competition for jobs will mean that retirees’ earning power will be diminished, speakers said at the “Navigating Uncertainty: The 30+ Year Retirement” webinar hosted by the Longevity Project, the Stanford Center on Longevity and Wells Fargo.

Ken Stern, chair of the Longevity Project and moderator for the event, said, “Working Americans should expect a 30- to 40-year retirement. Sixty-four percent of Americans now plan to work in retirement.”

Tracie McMillion, head of global asset allocation strategy for Wells Fargo Investment Institute, said that helping people grapple with the challenges that arise from living a long life is a focus for Wells Fargo. “That means not only preparing for retirement but living the life they imagined for themselves in retirement and helping them allay their worries about outliving their assets. People may be looking to work longer, not only for the financial reasons but because they are looking for meaning and purpose in retirement,” she said.

Chris Farrell, senior economics contributor for Minnesota Public Radio, agreed with McMillion that money is not the only reason continuing to work is attractive to older people. “We are redefining retirement so that there is a blend between work and leisure,” he said. “There are a lot of reasons a long retirement is not desirable. There is a high cost of loneliness, as we have learned in this pandemic. People have a great desire to have connections and be part of a group. Work is very important to people’s connection to the broader society.”

Teresa Ghilarducci, professor of economics at The New School, said the pandemic is only exacerbating the retirement savings shortfall in the nation. “This is a tale of two countries,” Ghilarducci said. “There are those people who haven’t been able to keep their job and those who have been able to keep their job. But among the latter group, older people are scared because older people are much more likely to lose their job in a recession.”

For those age 62 and older, there are limited job opportunities and “a lot more inequality,” she added.

“Many people are confronted with circumstances in their lives that cause them to leave the workforce earlier than they had planned,” McMillion noted.

McMillion said that not only losing a job can derail a person’s retirement, but that dips in the broader economy can, pointing to the terrorist attacks of 9/11, the Great Recession of 2008 and the coronavirus pandemic of 2020. She said the only way people can counter these challenges is to have adequate savings—including emergency savings—to refinance their debt, to create a budget and to lower their expenses.

She said that part-time work might be a possibility for older workers but also they might consider becoming an entrepreneur.

Farrell said turning to one’s network of business connections, to one’s church or synagogue and to one’s community is a way to not only find new work opportunities but to figure out new horizons.

Ghilarducci said rather than taking Social Security benefits at age 62, people should wait until age 70, because by then, benefits are 32% higher.

Finally, Farrell said that he believes that 30 years from now, it will not be uncommon for people to work until age 70 or even age 80. “Thirty years from now, college campuses will be multigenerational—including 60-year-olds,” he said. “Twenty or 30 years from now, many people may never retire, or hold different careers throughout their lifetime.”