Seniors Who Delay Retirement Will Help Boost Medicare and Social Security

A new study from the nonprofit RAND Corporation revealed that the unprecedented increase in the number of older Americans who delay retirement will likely help ease the financial woes facing both Social Security and Medicare.

According to RAND researchers, older Americans began delaying retirement in the late 1990s, a trend that will likely continue and even accelerate over the next 20 years. This is great news for Social Security and Medicare because as more and more Baby Boomers are reaching retirement age, they're leaving proportionately fewer people in the workforce to pay taxes and support the social programs that help provide a safety net for older Americans.

So why are older Americans extending their stay in the workforce? RAND points out several reasons:

• American workers have gained more education, which has enabled them to find jobs that are more fulfilling, not as physically demanding and for which they are paid more.
• There are more dual-earner couples in the workplace, and couples tend to retire together. Since many men are the older half of a couple, they tend to stay in the workforce longer to accommodate their wives' careers.
• They want to earn additional income.
• They have improved health, which allows them to work longer.
• As life expectancy rises, many employees extend their work lives in order to accumulate enough wealth to provide for their needs during old age.

Because this trend could lead to massive benefits for the nation, lawmakers are now considering reforms that would dismantle barriers that discourage older people from remaining employed - for example, measures in some pension plans that penalize recipients who continue working. They're also examining changes that would encourage employers to hire older workers.

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