In countless households across America, couples in their early sixties sit at their kitchen tables, examining Social Security statements and contemplating retirement. After four decades in the workforce, decisions about leaving their jobs can be both exciting and daunting. They dream of travel, family time, or perhaps pursuing hobbies like golf.
Yet, the choice to retire is far from simple. Retirement, especially at age 62 — the earliest age for Social Security eligibility — brings with it unexpected challenges. Notably, men retiring at this age face a higher mortality rate, approximately 20% more than their working counterparts. For women, although less clear, the trend seems similar. This contradicts the popular view of retirement as the reward for years of hard work.
The value of continuing to work extends beyond mere financial benefits. Social ties, problem-solving satisfaction, and a sense of being needed contribute to a sense of purpose, which correlates with longevity benefits. Data from the Health and Retirement Study indicates that workers near retirement have productivity levels comparable to the average economic output.
Importantly, the notion that older workers hinder opportunities for younger ones is a misconception. Evidence shows that when older individuals remain employed, younger workers tend to fare better. Older employees help stimulate economic demand and share valuable knowledge through mentorship and experience.
This perspective does not suggest everyone should work longer nor that it should be mandated by the government. There is a genuine and personal decision: weighing the benefits of enjoying retirement against continuing work. For many, the joy of work is intertwined with its purpose and engagement.
Social Security statements often overlook another crucial aspect. The U.S. economy, with 145 million full-time equivalent workers generating $32 trillion in annual output, benefits significantly if more Americans choose to work an additional year. This could boost the economy by about $836 billion annually, nearly reaching $1 trillion when considering Social Security and Medicare contributions.
Nonetheless, not everyone can or should continue work. Around 19% of workers aged 55 to 64 experience health-related limitations. Physically demanding jobs may prevent some from extending their careers, even if desired. The decision remains personal and should be respected for those who have the option to choose.
Today’s retirees are healthier and more capable than ever before. When they exit the workforce, the loss extends beyond the individual to the entire economy.
Authored by Dana Goldman, founding director of the USC Schaeffer Institute for Public Policy & Government Service, and Anup Malani, chief economist of the Centers for Medicare & Medicaid Services. The Schaeffer Center receives funding from various sources, including government contracts for policy analysis.