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Older than 65 and still on the job

By Jennie L. Phipps · Bankrate.com
Sunday, January 27, 2013
Posted: 6 am ET

Are you 65 and still working? Consider yourself part of a growing trend.

This retirement planning trend is strongest among people who are better educated and well-heeled, says a Brookings Institution study for the Center for Retirement Research at Boston College. While staying on the job does keep these workers from having to dip into savings, working longer isn't generally a reflection of any decline in their retirement income from pensions, Social Security or the availability of income from savings if they choose to take it. "We find only a weak relationship between changes in asset income and the decision to remain in the workforce," researchers reported.

What's keeping these people on the job longer? Three factors, the study says. People like the work and do it well, and the boss wants to keep them around. The availability of health insurance that is cheaper and better than Medicare seals the deal.

Another factor that can have an influence is whether or not a worker has an old-fashioned defined benefit pension plan, or a 401(k) or other defined contribution plan. "Defined-benefit plans create strong incentives for early retirement because the benefit is not adjusted for those who delay retirement, and the worker cannot receive the benefit unless they leave the job," the report concludes.

But 401(k)s have the opposite effect. The longer you work, the more income you can shelter and the more employer matches you get. "This shift in pension coverage has been a substantial factor in accounting for the rise in the labor force participation of older workers," the study says.

The bottom line, the study found, is that older workers are protecting their nest eggs. While the portion of income older workers derive from savings has declined by 50 percent since 1990, they've made up the difference with income from wages and self-employment.

In other words, if you like to work, do what these workers are doing -- continue to work, and leave your nest egg alone. If you live to be 100, you're going to need it.

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3 Comments
Varnice Parker
February 17, 2013 at 3:53 pm

If noprofit organization are important, shouldn't they be able to get monies from the persons that suport them, not our elected officials stealing, the workers of america money to donate to their organizations. When Americans pay their taxes they should be able to support whom they choose and Washinton electeds leaving us alone, an organization make rich CATS in AMERICA off of the backs of the Working AMERICANS. WASHINGTON QUIT STEALIN MY MONEY, I NEED MY OWN EARNINGS. WASHINGTON ELECTED DON'T SIGN A CONTRACT WITH MEXICO TO PAY SOCIAL SECURITY AND MEDICARE TO ILLiGALS. WASHINGTON ELECTED JUST KEEP OWN STEALING FROM AMERICANS THAT WORK, THE ELECTED ARE DRAGING AMERICANS DOWN SO WE CAN'T HAVE MORE THAN 3RD WORLD COUNTRIES. THE DRUG CARTEL ARE TAKING AMERICA OVER SOON WE WILL BE THE SAME AS MEXICO. throw bumbs out of Washington that want to give take our money, they also support big businesses especially the democrats. Have a Good Day.

Kelly
February 05, 2013 at 7:32 pm

DUH! I don't g it. How slow is this world. What is ened income. Isn't that the money you get back for your dependant chilren? Well, if you ask me if you have a child, it's your responsibility to pay & care for it, not the government. There is many people that work & make just enough to get the max amount of earned income & keep having kids to get it. Well, im sure it's nice now, but wouldn't it be better to have that money when we need it the most & we can't work anymore. If you ask me that's one of the dumbest things they do is pay people to take care of their own children. How does this make scense?Do you realize how much money this would give toward social security? HELLO PEOPLE!!!!!We can't afford for them to keep taking out of our checks that we work hard for & things still going up in price & their not paying more.GEESH.......Is it rocket science???