Sunday, August 2, 2009

It's Time to Retire "Retirement Age"

The term "retirement age" has lost its relevance. When the eligibility age for Social Security was first set in 1935, the average American lifespan was 61.7 years. Today, thanks to some great leaps forward in medicine, it's 77.8 years.

Longer Lives = Longer Careers. A rising share of Americans over age 50 are not planning to retire any time soon — some because they don't want to and many because they can't afford to. A 2007 study by McKinsey & Company — completed well before home values and stock investments evaporated — found this:
  • 38% of Baby Boomers said it was "extremely likely" that they would work beyond the traditional retirement age — primarily for financial reasons
  • only 15% said it was unlikely
But where will these older workers find employment? Although layoffs are rampant in every age group, anecdotal evidence suggests higher-salaried, older workers are affected more than most. Older workers also face bigger hurdles finding new jobs. Even in 2005, a two-state sample study by the Center for Retirement Research at Boston College found that younger workers were 40% more likely to be called in for an interview than those over 50. Overall, the study concluded that older workers stay unemployed approximately three times longer than younger ones.

Things are even more dismal in specific business sectors. Writing for MediaPost, advertising industry executive Brent Bouchez notes that "nationwide, less than 5% of agency personnel are over 50"; similarly, a 2008 article in the New York Times reported this: "In an industry survey, a majority of technology companies candidly said they would not hire anyone over 40."

In addition to being illegal, that discriminatory policy is also just plain dumb. More about this in future posts.

  • "Why Baby Boomers Will Need to Work Longer," McKinsey Quarterly, November 2008
  • "Do Older Workers Face Discrimination?" by Joanna N. Lahey, An Issue in Brief, Center for Retirement Research at Boston College, July 2005
  • "Maybe Peter Pan Should Move to Madison Avenue" by Brent Bouchez, MediaPost Engage:Boomers blog, June 22, 2009
  • "For a Good Retirement, Find Work. Good Luck." by Steve Lohr, New York Times, June 22, 2008

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