Older workers are sticking around - what does that mean for their younger colleagues?

By Alessandra Malito

People between 65 and 69 years old make up the largest share of workers 55 and older

Many older workers are thriving in the labor force instead of coasting into retirement these days.

The workforce is aging with the number of workers between 65 and 69 years old making up a larger share of the group of workers ages 55 and beyond, according to the Employee Benefit Research Institute's recent report on older workers and the labor market. Between 2000 and 2023, the share of workers 65 and older jumped from 23% to 29.5%, the study found.

The labor force is in a good place right now - there is a "demand" for workers, and unemployment rates are low - but having such a high share of older workers could one day impact their generational counterparts, experts said.

Baby boomers as a whole are a larger cohort than Generation X, and that's reflected in the numbers, said Craig Copeland, director of wealth benefits research at EBRI. "Usually, 55- to 64 [age group] has been a lot of times the prime ages for those who have the highest positions within the company, or certainly have the most experience," he said. Instead, this age cohort now has a substantial number of people older than them still working, as well as a younger group right behind them with a sizable presence.

Baby boomers, born between 1946 and 1964, account for almost 22% of the U.S. population, while Gen X, born between 1965 and 1980, make up almost 20%. Millennials, born between 1981 and 1996, account for 22% of the population, and the generation after them, Gen Z, born between 1997 and 2012, make up about 20.3%, according to a 2020 Brookings study. Pre-boomers account for 7.6% of the U.S. population and post-Gen Z, in some cases known as Alpha, are 8.4%.

Because Gen X is sandwiched between baby boomers and millennials, there is a "generational divide," Copeland said. "You have differences in the way people work," he said.

Read: Three reasons Generation X thinks reality bites when it comes to retirement

At the same time, there are benefits to having multiple generations in the same company. Members of various generations can learn from one another, share skill sets and create mentor relationships when they're working together.

Right now, the workforce is in a better place than it was a few years ago. Unemployment is at historical lows, hovering around 3%, and the labor market is expanding, Copeland said. As a result, younger generations aren't losing out on positions or promotions because of senior colleagues. "If the labor market turns, it could be an issue," he said.

There may also be issues in the future, when the older workers age out of the labor force, and there may not be enough members of Gen X to replace them, Copeland added.

See: How to write a résumé when you're retired and looking for work again

Why older Americans are still working

For some people of retirement age, working is a way of staying active and delaying Social Security for a bigger benefit later in life. For others, it could be a necessity, a recent study shows. Regardless, society is facing "Peak 65," which is the record number of people turning 65 years old beginning in 2024 for the next few years.

More than a fifth of Americans 65 and older are still working, according to a LendingTree analysis of U.S. Census Bureau data. About one in four people are self-employed, half are working at private companies and 10% are employed by the government. The number of people who reported being retired declined only slightly, from 16.8% in March 2022 to 16.2% in March 2024.

"Inflation threw a wrench into a lot of people's retirement plans, and changed a lot of the calculations," said Matt Schulz, chief credit analyst at LendingTree. Even with bumps in Social Security benefits, "the truth is, inflation still wreaks havoc on people's budgets and a lot of the assumptions people made five years ago about what it would cost to live day-to-day - they don't work anymore."

In some scenarios, older people are just happy to stay at work, he added. "Businesses are going to have to be cognizant of that," Schulz said. "Older Americans may not want to retire, whether that's because they don't think they can afford to, or because they don't want to. That is certainly something that is going to be interesting to watch over the next few years."

-Alessandra Malito

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06-07-24 0554ET

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