Are You Planning to Work Until 67? And Will You Be Able To?

Prepare to adjust your plans if your health, your company, or corporate America changes.

Are You Planning to Work Until 67? And Will You Be Able To?
Alamy
If you were born in 1960 or later, you'll have to wait until age 67 to get your full retirement benefit from Social Security -- based on the rules as they stand today. If you love what you do, are capable of continuing it, and your employer still finds the work you deliver valuable, then more power to you. However, counting on keeping your job until 67 carries risks -- risks you must consider when making long-term plans.

What Could Go Wrong?

The chart below shows the labor force participation rate in 2012 (the most recent data available), based on data from the Bureau of Labor Statistics. It essentially shows the percentage of people in each age bracket actively working or looking for work . As you can see, the participation rate starts dropping after around the mid-40s, with significant declines starting around 55. It drops below 50 percent for 62 to 64, and in the 65 to 69 age bracket, the participation rate had fallen to 32.1 percent.

Bureau of Labor Statistics
A major risk to your plan is that you might wind up disabled. The charts below come from the U.S. Congressional Budget Office and show disabled workers as a percentage of the overall population, by gender and age group. Age 60-64 is represented by the red line; note how it's substantially higher than most of the others. Indeed, it's only beaten by the purple dots, which represent the disability rate for those ages 65 and up who haven't yet reached their full Social Security retirement age.

Male disabled workers
female disabled workers
Congressional Budget Office
Even if your mental and physical health hold up, there's no guarantee that your employer will be around until you reach your planned retirement age, nor that the company will need your services if it does. Look around your office and estimate the ages of your co-workers. How many are in their late 50s or 60s? Of those who are, how many are doing the type of work you're doing now, or have a decent shot of being able to?

In addition, once you hit your 50s, it starts to get more difficult to find a new job that pays well and provides meaningful work. Oh sure, if you're a proven executive with incredibly strong leadership skills, you may be able to land on your feet at any age, but for the rest of us, a long resume may start becoming a liability.

What Can You Do?

If there's any risk that you won't be in your current job until you're ready to retire, the first and most important thing you can do is to save and invest as though your retirement date will come well before you reach 67. Even if you intend to keep working, money brings flexibility, including the flexibility to either retire early on your terms or to survive and thrive in a lower-paying job, should you lose the job you're in.

On top of that, with a strong enough personal financial position, you can buy yourself a job by starting or investing in a small business that needs both capital and leadership, or by buying a franchise. If you want and are able to work until age 67 (or beyond), charting your own course like that may provide you better opportunities than hunting for traditional jobs when you're in your 50s and 60s. But you'll need to have capital to work with.

On the positive side, the experience and reputation that come with age will always matter for some jobs. For instance, nonprofits often need help and love the reliability, trustworthiness and solid reputation that often come along with gray hair (or no hair). A good reputation means a lot to a charity, and that's one characteristic you ought to be able to play up in your 50s and beyond.

Chuck Saletta is a Motley Fool contributor.


Increase your money and finance knowledge from home

Getting out of debt

Everyone hates debt. Get out of it.

View Course »

Understanding Credit Scores

Credit scores matter -- learn how to improve your score.

View Course »

Add a Comment

*0 / 3000 Character Maximum

7 Comments

Filter by:
Iselin007

According to the timesizing site the U-6 method use be used to figure unemployment. The U-3 rate used now makes things look better but it forces people out of the labor force like older people who can't get hired in a cheap labor enviroment of harsh manual labor jobs.

May 30 2014 at 5:43 PM Report abuse rate up rate down Reply
toosmart4u

If you are on social security and medicare thank a democrat. If you want to end these 2 fine programs vote republican. You will get what you vote for.

May 30 2014 at 4:53 AM Report abuse rate up rate down Reply
toosmart4u

On social security and medicare, or soon to be thank a democrat. If you want to end these 2 fine programs vote republican.

May 30 2014 at 4:51 AM Report abuse rate up rate down Reply
davidrep1

No one WANTS to work until they're 67. People HAVE to work that long because of the thugs on Wall Street who continue to play with our money from our 401(k)'s at their own private casino. Keep electing republicans who want to deregulate everything, including the Street and the banking industry, and also want to take away our medicare and medicaid, and privatize our social security. You'll be working until you drop dead. There will be no retirement for anyone. Ever.

May 30 2014 at 1:36 AM Report abuse +5 rate up rate down Reply
pllove49

Oh course people can work to 67 and beyond...doing hard manual labor and getting paid next to nothing...NOT

May 29 2014 at 11:52 PM Report abuse +5 rate up rate down Reply
SPQR

Obama is just a huge lefty...people were scared and wanted a savior. They took their chances. The backlash will be tremendous inflation and we will all be broke except of course the rich

May 29 2014 at 11:44 PM Report abuse -6 rate up rate down Reply
Iselin007

Anyone noticed there service is being tapped?

May 29 2014 at 9:57 PM Report abuse rate up rate down Reply
iccfl

...the sense of accomplishment is the key to life...

May 29 2014 at 9:18 PM Report abuse +2 rate up rate down Reply
Mad Dog

If you can work you should be working. Period. I am 67 and just starting on my third career. Anyone out who thinks you live on SS is a nut case! Man should work, needs to work, and must work to be a productive human being.

May 29 2014 at 8:25 PM Report abuse rate up rate down Reply
2 replies to Mad Dog's comment
parthenon1

probably for the same reason Huff Post blocks my comments, they are 180 degrees away from their positions. They dont want to hear sensible comments about how anything done by or associated with Obama, his administration or his supporters is wrong headed and dangerous

May 29 2014 at 9:50 PM Report abuse -3 rate up rate down Reply
parthenon1

probably for the same reason Huff Post blocks my comments, they are 180 degrees away from their positions. They dont want to hear sensible comments about how anything done by or associated with Obama, his administration or his supporters is wrong headed and dangerous

May 29 2014 at 9:50 PM Report abuse -3 rate up rate down Reply
pllove49

Well...why don't they lower the retirement age and let the older folks get welfare and housing and some of that prison money instead keeping some of those younger folks locked up for petty crimes...some older folks are flat tired of working after 40 years and lots of low wage years in their portfolio..

May 29 2014 at 5:28 PM Report abuse +5 rate up rate down Reply