The Surprising Benefits of Working Longer

Americans are working longer for financial reasons – they can’t afford to retire. But what few realize are the enormous economic and social benefits that accrue to those workers and the companies they serve.

For more than a century, the U.S. and the world have been steadily aging. It is estimated that between 2015 and 2050, the number of adults over 65 will nearly double as a percentage of the overall population. And the 2017 U.S. Census estimated that more than 10,000 people in the U.S. will turn 65 each day for the next 20 years.

Despite the fact that early retirement and early initiation of Social Security benefits generally result in a failure to maximize those benefits, about 90% of Americans begin collecting Social Security at or before their full retirement age, the most popular age being the earliest eligible (62). The average age to begin receiving benefits is just 64. This choice of collecting benefits early has a dramatic negative impact, reducing monthly benefits by as much as 25% compared to those who wait until age 66 and an additional 32% for those who wait until age 70.

Tim Driver and Amanda Henshon contribute to the literature on retirement planning with their July 2020 study, Working Longer Solves (Almost) Everything: The Correlation Between Employment, Social Engagement and Longevity. They began by noting: “Working longer provides additional lifetime earnings and the opportunity for incremental saving, augments the size of eventual pension and social security benefits and also reduces the number of years of retirement during which these augmented assets will be consumed. Even without considering any health benefit, deferred retirement results in greater resources amassed to support fewer years of retirement.”