The Urban Institute's Retirement Policy Program's new analyses reveal emerging trends and challenges facing older Americans during the recession.
January's unemployment numbers show that a record high 2.1 million Americans age 55 and older were looking for work last month but were unable to find jobs. The male unemployment rate reached 8.2 percent for people between the ages of 55 and 64, and 8.1 percent for ages 65 and older. These are the highest rates of unemployment for these age groups since the Bureau of Labor Statistics began tracking that data in 1948. The unemployment rate was a bit lower for older women, but it's still twice as high as it was in late 2007, just before the recession began.
As their job prospects deteriorate, many older Americans are turning to Social Security. A record number of men and women applied for Social Security retirement benefits in 2009. Claiming these benefits earlier than planned helps the unemployed weather job losses, but it also puts their future economic well-being at risk because their Social Security benefits are permanently reduced.
At the same time, more Americans age 55 and older are choosing to stay in the workforce, even as jobs become scarce. In 2009 that population made up 19 percent of the U.S. workforce, the highest share on record. Between 1993 and 2009, the share of men age 65 to 69 who participated in the labor force increased 43 percent. Women in that age group increased 65 percent over the same time period. Increased incentives to work, improvements in health, and growing concerns about the affordability of retirement are contributing to this trend.
But the outlook for older Americans physically unable to work and too young to collect retirement benefits remains bleak. Only 47 percent of Americans age 51 to 64 with disabilities ever receive disability benefits from the federal government. If someone within that age range becomes disabled, their risk of falling into poverty doubles. With more disabling conditions occurring with age and with the population of older Americans growing rapidly, the safety net for disabled workers should focus more on claimants' functional abilities rather than on a menu of specific qualifying medical conditions. This approach would account for the cumulative effect of numerous minor ailments that disable people and would target those with the greatest needs, according to the Retirement Policy Program researchers. Minimum Social Security Disability Income and Supplemental Security Income (SSI) payments should also be raised to levels at or near the poverty line.
The Urban Institute's Retirement Policy Program assesses how current retirement policies, demographic trends, and private sector practices influence older Americans' security and decision-making. Partial funding for the Retirement Policy Program comes from the Rockefeller Foundation.
If you have any questions please contact:
Matthew Johnson at (202) 261-5723, or mjohnson@urban.org
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