Is Working Longer a Good Prescription for All?

Working longer is one of the most effective ways to improve prospects for a secure retirement. It increases monthly Social Security benefits, allows more time for saving in 401(k)s, and shortens the period of retirement that assets need to cover. Working longer is also widely seen as a reasonable response, because people are living longer and healthier lives. The question is whether this prescription is realistic for individuals across the socioeconomic spectrum. This brief addresses this question by synthesizing the findings of a series of five recent studies conducted by the Center, using educational attainment as the measure of socioeconomic status (SES).1 The brief proceeds as follows. The first section addresses whether it is reasonable to expect lower-SES individuals to work longer by examining recent patterns in life expectancy gains. The findings suggest that working somewhat longer is reasonable, so the rest of the brief focuses on the feasibility of this option for the lower-SES group. The second section explores whether lower-SES individuals currently plan to work long enough to achieve retirement security. The third section analyzes whether job switching can help workers extend their careers, while the fourth section explores the breadth of job options available to those who do switch. The fifth section examines whether reducing the health insurance costs of older workers can improve their labor force prospects. The final section concludes that less-educated workers could clearly benefit from extending their worklives but they face narrower options than their better-educated counterparts. Therefore, society may need to find remedies, other than working longer alone, that allow lower-SES households to secure an adequate retirement income.