Last week I gave a talk at the University of Minnesota on my latest book, “Purpose and a Paycheck.” (The book focuses on the economic and social contributions of an aging workforce.)
As always, the best part of the session were the questions. One theme that emerged is how the basic model many of us carry about the typical life span is breaking down.
The model runs along these lines: You go to school; you work hard at your career; and then you retire and embrace full-time leisure. To be sure, this vision often doesn’t square with reality. Many people don’t live that idealized progression. Life throws too many curves, some positive and others negative. Yet the narrative remains powerful. Think about how the word “retirement” still signals leisure, even while many people in the traditional retirement years continue to work.
The school, work, retirement silos are coming down, partly driven by the powerful combination of increased longevity, healthier experienced workers and improved education levels. A more complex narrative is being scripted.
Career shifts will become increasingly common with longer work lives. Put it this way: What kind of education system should exist for workers that may be in the labor force 60 to 70 years?
The rewrite puts pressure on policymakers to overhaul the safety net established for a different economy and society. More resources need to be devoted to worker training, retraining and lifelong learning. Health and pension systems should be redesigned to support a mobile workforce. Employers will eventually overhaul benefits, including developing phased-retirement programs.
Many workers know that “it is nearly impossible to finance 30-year retirements with 40-year careers,” as economists Robert Clark and John Shoven put it in a recent paper. It’s too difficult for the typical household to raise children, own a home, meet their daily expenses and save enough to finance a traditional retirement. Working longer — often with part-time work — shores up household balance sheets.
One clear implication of the work-longer movement is that the normal age of retirement is now 70. Yes, the earliest you can claim Social Security is age 62 and the so-called full retirement age is 66 (on its way to 67). Yet waiting to file for Social Security past full retirement age increases the benefit level by 8 percent a year until age 70. You can always file because of ill health and unemployment. But the starting point for calculating when to file for Social Security should be age 70.
Chris Farrell is senior economics contributor, “Marketplace,” commentator, Minnesota Public Radio.