Americans need to keep working

Sep 23 2003 by Brian Amble Print This Article

A survey by AARP - the American Association of Retired Persons - suggests that seven out of ten Americans plan to continue working past the age of 65 and almost half expect to work into their 70s or even 80s.

But while many of the 2,000 people aged between 50 and 70 told interviewers that they enjoyed work and saw it as a way of stayin g mentally and physically active, the main reason for working past retirement is financial need.

The Amercian figures echo a similar trend elsewhere. Earlier this month, research by the Future Foundation predicted that nearly two million people in the UK will working aged 65 or older as reduced pensions, better life expectancy and skill shortages lead to employers relying on older workers.

Other research has found that one in four older workers in the UK will be forced to retire later than they had planned two years ago.

In the US, just as in the UK, falling stock markets and inadequate retirement funds leave many with little choice to delay retirement and to keep working.

"The growing number of individuals choosing to work after traditional retirement age suggests that current public policy and private programs may not be sufficient to enable workers to adequately prepare for financial security in retirement," the AARP report says.

But the high cost of health care in the US is an added pressure that is absent elsewhere in the industrialised world. "The escalating costs of health care and the cutbacks in employer-sponsored retiree health coverage in recent years have made it difficult if not impossible for workers to plan for and pay for major medical costs after retirement," it continues.

Perhaps as a result of this, the most common reason for staying in work for Americans is financial. More than one in five (22 per cent) of those near retirement and a third (35 per cent) of retirees said that they needed to work to make money.

Six out of ten of the respondents who plan to work past retirement age intend to continue in their present job or work in a similar one.

Other common reasons cited by the survey for working in retirement include the desire to remain mentally and physically active and the desire to be productive and useful.

In contrast, while research suggests that as many as a third of people in the UK aged between 65 and 74 come out of retirement to take up some kind of employment Ė be it full, part-time or voluntary - a mere four per cent do so for the money.

Jeff Love, research director at AARP, said that he was surprised that so many people intend to work way past the traditional retirement age.

"I suspect it's because people have really taken an economic hit in the past two years," he said.