So yesterday I told you all about a couple things I’d read on the question of the “right” retirement age.
And in some respects, I think that Farrell is spot on, that paid work can be a very good thing, even for people past a traditional retirement age.
Look, I know, anecdotal experience again: Mom kept at her retail job, though admittedly with decreasing hours, and, whenever she didn’t want to work, she gave up shifts to others looking to pick up more hours. Dad retired early — 57 or 58 I think; he felt forced out and took advantage of an early retirement window, then went to work at a contract house for a couple more years, until work dried up there, then tried his hand at a couple other part-time jobs, but nothing really stuck, and ended up spending most of his time watching TV. Maybe he could have found some hobby to pursue, maybe he could have found some means of volunteering, if he’d had a visit from his future self saying, “Chuck, get up from that chair or you’ll be just barely able to get around in a walker when you’re 75.”
Or maybe it’s a chicken-and-egg sort of thing; maybe he would have been able to find that part-time job, but was already slowing down mentally and physically.
In any case, for any individual planning for retirement, it surely is a good idea to think about, “could’ja find a more fulfilling ‘encore career’ instead of completely retiring?”
And it would also certainly be A Good Thing for employers to provide more flexible work opportunities, and for retirement policies to support this. At a minimum, anyone considering retirement should understand the significant benefits to delaying Social Security until age 70. And the disability and unemployment systems could stand reform, to respond to the situation we’re in now, where unemployed late adults* under age 62 collect disability rather than finding jobs that are possible for them to do, and over age 62, collect Social Security because they feel they have no choice.
(*Remember, I’m using the term “late adult” or “late adulthood” to refer to individuals ages 60 – 80, to avoid a label that specificially implies leaving the workforce, like “retirees,” and to distinguish between this stage of life and the later “old age.”)
There is a bigger question which Farrell doesn’t really answer, and can’t really answer: will all the late adults who want to keep working, be able to keep or find jobs, without having negative consequences for the rest of the workforce. This is a big unknown, because it’s part of a much bigger picture having to do with globalization, and immigration, and especially automation, and the consequent future of work more generally. So let’s bracket this.
From a public-policy perspective, this splits into two further issues:
Can we consider the Social Security funding crisis “solved” because of a predicted tendency of late adults to work to a later age than in the past? — both because taxes from their income will boost Social Security coffers, and because, once this prediction becomes reality, we can raise the retirement age guilt-free, to age 70 or so? I’m not sure; maybe in the context of a reform which provides disability/unemployment benefits for the
Can we at least consider the “other other pension crisis” (yes, I know, I keep trying to make that phrase a thing to describe lack of private retirement savings) solved, or mitigated, anyway, if late adults continue working for longer, and need less savings to supplement part-time work or fund fewer years after they’ve left the workforce altogether?
The difficulty is, of course, that you simply can’t predict whether you’ll be hale and hearty to a ripe old age, or become unable to work due to a physical or mental impairment (or find that it’s just not any fun any longer), or be unable to find a job even if you’d like one.
And that’s true as age creeps up on you, without a single magic cut-off, but impairment or job loss is an increasing risk the older you get. A person can become disabled at age 45, and Social Security disability and long-term disability insurance can provide a fair amount of pay replacement, but reality is, your living standard is going to drop. And maybe that’s OK. After all, if age 70 were the “default” retirement age, we’d be asking whether people should have “extra” savings in case they become unemployed or disabled before then. Maybe it’s a fully rational choice for someone in their late middle-age to say, “I can choose to save a substantial amount now, and reduce my standard of living below what feels reasonable to me, to enjoy retirement later, or I can save less now, and plan on working more later, or accept a reduced standard of living later and be fine with it.”
Maybe.
Anyway, that’s all I have for you tonight.
What do you think?
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