The Current State of Work for People at ‘Retirement Age’

Older individuals have unique challenges and new opportunities in today’s workplace and job market

Many people who reach or near the traditional retirement age grapple with whether they can retire. Others question whether they should, and still others tried a life of leisure but decided it wasn’t for them—financially or mentally.

The average retirement age by US state varies between 61 and 67, with the national average at 64. Many individuals consider retiring in their 50s, depending on their financial circumstances. So, what are the real options for people in the late 50s-to-70-year-old cohort who need or want a job?

Here’s a look at some of the financial considerations, hiring and workplace realities, and opportunities for individuals at or close to ‘retirement age.’

The decision usually starts with finances and lifestyle

Just as job availability depends on experience, skill, and industry, the potential to retire (and to what extent) relies on an individual’s situation, including their net worth, investments, lifestyle, expenses, and income in retirement.

Northwestern Mutual’s “2024 Planning & Progress Study” reveals that Americans believe they will need $1.46 million “to live comfortably” in retirement. This latest estimate is 15% higher than 2023’s number ($1.27 million) and 53% higher than 2020, “when Americans said they would need $951,000.”

Fidelity offers an adaptive estimator of what it believes is necessary to retire comfortably: saving a multiple of one’s salary by age, including:

• 6x salary by age 50
• 8x salary by age 60
• 10x salary by age 67

And many financial professionals support the use of the 4% rule (updated to the 3.3% rule) which provides a rule of thumb on the amount to safely withdraw from investments to support a 30-year retirement lifestyle. These withdrawals are on top of other income from social security, pensions, and rental properties, etc.

Properly estimating how much one needs depends on geography, lifestyle, economic and market conditions, and one’s overall view of life. Of course, these estimates are subject to change based on expenses, lifestyle, health, genealogy, family needs, and the actual age of retirement.

Regardless of the various methodologies used to estimate retirement needs, most Americans feel behind. For example, the median and average net worths of individuals aged 55 to 74 are:

• 55-64: $364,500 median/$1,566,900 average
• 65-74: $409,900 median/$1,794,600 average

The averages may look on point, but high- and ultra-high-net-worth individuals skew these numbers. The medians tell a far more accurate story.

Many individuals won’t be able to retire when they want to, and economic issues are driving some back into the workforce. Others simply want to continue working, and those who do report better mental health.

What are the options for older members of the workforce?

The state of work for older individuals

Can I retire? Should I retire? And if I don’t, how do I stay relevant in the workplace? Many older workers have these questions, and the answers are changing as the workplace does.

One growing trend is that there are now more older workers, according to Gallup research:

• “The 65-and-up workforce has quadrupled in size since the mid-1980s. Nearly one-quarter of the workforce is 55 or older.”

• “Workers ages 75 and older are the fastest-growing age group in the workforce. […] Some 9% of adults ages 75 and older are employed today.”

Unfortunately, many of these older employees continue to work because of rising costs and fears about Social Security’s future. In addition, a recent AARP report revealed that about “two-thirds of adults over 50 believe older workers face discrimination in the workplace,” and “90% believe ageism is commonplace.” Age discrimination is illegal but considered “tough to prove in court.”

“Ageism is really one of the last acceptable ‘isms’ that society tolerates,” Heather Tinsley-Fix of AARP commented to USA Today.

In addition, research from the OECD and the international nonprofit Generation found:

Hiring managers surveyed have strong negative stereotypes of 45+ candidates, clearly preferring candidates more comfortably aged between 30 and 44. The ‘older’ are seen as less able to adapt to tech, less ready to learn new skills, less open to innovation. While they perceive the younger as more “impressive in interviews,” and a better fit for the industry, the culture — even the team.

Further, just “13% of the hiring managers surveyed in the report say they would definitely hire someone between 55 and 65 — let alone older.”

Beyond discrimination explicitly based on age, many older workers find they have fewer opportunities because of their experience. Individuals over 60 often have decades in a given field, and those in their mid-forties to 50s are in their peak earning years. Thus, hiring managers may not have the budget—or perceive they have it—to compensate older workers commensurately with their resumes.

However, on the bright side, the odds of employment increased with education. For example, “almost 80% of highly educated men over the age of 55 are employed.” In addition, an aging population and a global talent shortage are spurring many businesses to actively recruit and retain older workers. “Bain & Company estimates that approximately 150 million jobs globally will need to shift to workers 55 and older by the end of the decade.”

Strategies for working during traditional retirement age

Many older individuals want to continue working full-time. Others are interested in a variation of the “Coast FIRE” retirement, where an individual saves enough to let their investments grow while continuing to cover basic living expenses with working income. In either case, some strategies can increase the odds of finding and maintaining positions:

• Maintain and up your skills. This advice applies to every worker of any age, of course, but may have particular value for older individuals, given some employers’ perceptions. “[E]mployers are increasingly hiring workers based on their specific skills and competencies. Skills-based hiring could disadvantage older workers, particularly those with low wages, if their skills are no longer relevant,” according to an Urban Institute report.

• Vet potential employers for their culture and hiring practices. CNBC offers tips, including “identify companies committed to hiring older workers” based on age-friendly pledges and certifications and a lack of discrimination lawsuits,  scanning job ads for relevant terms and anti-age-discrimination policies, and spotting red flags in company materials.

• Discover flexible, skill-specific opportunities. This tactic primarily applies to individuals aiming to transition from full-time to part-time work, allowing them more free time. Regardless, many people find success after looking for ways to plug their skills into consulting or other freelance work. The strategy relies on networking — through personal connections or LinkedIn — or leveraging freelance job sites like Upwork, Toptal, or numerous skill- and industry-specific job portals.

One final tip applies to everyone, regardless of age: Make yourself indispensable whenever possible, whether it’s due to skills, work ethic, or reliability.

Older workers may face some unique headwinds while seeking work, but employers are grappling with a labor shortage, and great workers are great workers. That maxim will likely never change—and it’s providing new opportunities for those at or near traditional retirement age who need or want to continue working.  

Karp HR Solutions helps businesses master the mix of finance and human resources. Contact us today for a free consultation.