(By Mani) Yesterday, we carried a story on "Why Are More Seniors Choosing to Work Today
Today, we would focus on whether there will be enough jobs for those seniors, who do not necessarily need to work in their retirement years, but forced to do so.
The current older generation is associated with the baby boom period between the years 1946 and 1964. In 2011, the first members of the baby boom generation turned 65, the age typically associated with retirement. Over the next 17 years, more than 70 million more baby boomers are expected to reach retirement age.
In the Wells Fargo Retirement Survey, an eye-popping 74 percent of respondents said that they will work in their retirement years. However, the key question is will there be jobs available for three-fourths of these individuals as they age into what is usually considered to be their "retirement" years?
At present, workers age 65 and over tend to be more educated than their peers, are more likely to work part time, be self-employed and work in non-physically demanding jobs. This will benefit individuals wanting to work during retirement whose experience and lifestyle fit these characteristics, but for others, employment prospects past age 64 will become increasingly challenging.
"As severe gaps between retirement goals and retirement savings persist, many households may not be living as comfortably during retirement and will rely heavily on Social Security benefits," Wells Fargo economist Jay Bryson wrote in a note to clients.
Although the employment-to-population ratio for individuals who are 65 to 69 years old is currently 30 percent, it falls significantly as individuals age further. For the cohort that is older than 74 years, the ratio is only 7 percent. Among all senior citizens, the employment-to-population ratio is currently 17 percent, significantly below the 75 percent ratio for workers who are 25 to 54 years old, so-called "prime-age" workers.
With nearly 40 percent of future retirees saying that they "need" to work in retirement, the current employment-to-population ratio of 17 percent for senior citizens suggests that many individuals who say they "need" to work in retirement will not be able to do so.
That said, recent trends give some ground for optimism. The absolute number of employed senior citizens is at an all-time high due to strong job growth in this cohort. Since January 2002, when household employment bottomed at the end of the 2001 recession, overall employment has risen only 5 percent on balance. Over that period, employment among seniors has grown from 4.2 million workers to 7.2 million workers, a 70 percent increase.
The employment-to-population ratio for prime-age workers is lower today than 20 years ago. The ratio for individuals who are older than 64 years has trended up to 17 percent today from about 11 percent in the early 1990s.