Employment rates have fallen for many Californians during this economic downturn, but not for Californians in their late 50s and 60s, according to a new CBP analysis released today. The new paper finds that the share of Californians age 65 to 69 who were working increased from 25 percent in 2007 to 30 percent in 2008. This sustains a trend of increased employment for individuals in their late 60s that began more than a decade ago.
Perhaps more Californians who are approaching retirement age are staying on the job because they’ve seen their retirement savings drop during the recent downturn in the stock market. But other factors must be at play as well, because the share of Californians who are working later in life has been on the rise since the mid-1990s.
Research shows that the trend toward working later in life reflects both good news and bad news. The good news is that more Californians are able to stay employed into their late 60s because they’re living longer, healthier lives and they’re less likely to have jobs that require physically demanding work.
The bad news is that, increasingly, workers approaching retirement are unsure they can afford to live comfortably if they stop working. This growing anxiety could reflect the fact that a declining share of the workforce has job-based pension coverage, and that among those who do, fewer have the kinds of plans that guarantee a fixed benefit in retirement. Increasingly, workers with pension coverage rely on 401(k)s for their retirement savings – the benefits of which are not guaranteed.
Fortunately, with job-based pension coverage declining and becoming less secure, Social Security provides a stable source of income for most seniors during retirement. Nearly two out of three seniors nationwide depend on Social Security benefits for at least half of their income, and approximately one out of three seniors relies on Social Security benefits for at least 90 percent of their income.
— Alissa Anderson