While in North America many older adults are staying in the workforce longer or returning to a second-act career after retirement, in Europe data shows that people are retiring at an earlier age. According to a recent World Economic Forum report, for the first time in a decade, the average length of working life for Europeans has dropped.
Although people in Europe are living longer and age-related costs are increasing, in part due to the pandemic, the average adult is expected to spend 35.7 years working – 0.2 fewer years than the average in 2019. With an aging population and greater longevity, more adults leaving the workforce earlier could leave many countries with declining tax revenues to meet the rising pension payouts and healthcare needs of older adults. By 2050, there are expected to be 500,000 people aged 100 and over in the EU-27.
A similar problem is developing in many countries, including Japan which has one of the world’s oldest populations. Canada, France, the UK, Germany, Italy, and the United States also expect to see similar changes in their populations’ demographics. Already 16.5 percent of the US population is over the age of 65 – that’s currently 54 million people and it is anticipated that number will reach 74 million by 2030.
The pandemic may also affect the older labor force in the United States. According to a recent Forbes report, the number of people over the age of 55 in the workforce is down by 2 million compared with pre-pandemic participation. Many of the older employees who lost their jobs during the pandemic won’t be returning to the workforce because their positions are being filled by younger workers who are willing to accept lower wages. Fewer company pensions, insufficient savings combined with greater longevity could spell an uncertain future for many middle-aged and older adults who may have to get creative to fund a longer retirement. Have you considered your future after retiring?