Suzanne Woolley reports for Bloomberg News that 20 percent of people who reach 65 are working rather than retiring in order to manage financially. That’s double the proportion of Americans who worked past 65 just 35 years ago.
Between the high cost of health care, small savings, and the demise of guaranteed pensions in retirement, many Americans need to work past 65. The last time 20 percent of Americans over 65 were still working was in the late 1960’s.
To be clear, people working past age 65 tend to be college-educated. Their inflation-adjusted average income is $78,000 today, up from $48,000 in 1985. Their income has increased 63 percent, compared with workers under 65, whose average annual income has increased 38 percent to $48,000.
The people who most need more income in retirement are generally less educated and unable to find jobs.
Accepted wisdom is that people need about 80 percent of their pre-retirement income to make do. Social Security benefits are estimated to replace only about 40 percent of that pre-retirement income. And, the typical worker on the bottom half of the income scale, with income below $40,000, has no retirement savings, excluding the value of any property they have.
People earning between $40,000 and $115,000 a year pre-retirement typically have about $60,000 in savings. The top ten percent of income earners with incomes above $115,000 typically have savings of $200,000, not enough. By one estimate, a typical college-educated professional needs to save between $1 and $2 million today “to retire fairly comfortably.”
Here’s more from Just Care:
- Beginning at age 70.5, you must withdraw money from your retirement accounts
- Nearly half of older households have no retirement savings
- How you might find a part-time job after retirement
- To save money on your care, consider using a free health clinic
- Four things to know if your income is low and you have Medicare