A seven-year analysis by the RAND Corporation found a trend of American men and women delaying retirement age, which might ease the financial issues facing both Social Security and Medicare.

Official government projections from the Bureau of Labor Statistics conclude that this trend will plateau in the next few years, but RAND researchers say an increase in delaying retirement will accelerate.

The trend of work done by older men has been declining since the 1850s, says Nicole Maestas an economist at RAND.
"In the 1990s [the trend] started reversing, which was a big surprise," she says. "That's definitely a big thing."

About 17 percent of Americans aged 65 to 75 were in the workforce in 1990, but that is expected to increase to about 25 percent this year, according to the report, which compiled numbers from the Bureau Labor of Statistics, a current population survey, health and retirement survey and other data sets. Not only are more men retiring at a later age, women are also following this trend, the report found.

"The trends for women are remarkable," Julie Zissimopoulos, RAND economist and co-author, told DOTmed News. "There are dramatic increases in labor force participation of U.S. women ages 55 to 64 from 1950 to 2010."

During that 60-year period, older women in the workforce nearly doubled, with 30 percent in 1950 and 60 percent in 2010.

These changes toward more work come from a number of factors, the researchers explain. As more and more Americans gain a better education, they find better jobs that are less-demanding physically, and they are better compensated. This urges workers to stay in the workforce.

The increase of women in the labor force also helps propel the trend upward because their husbands delay retirement to accommodate the women's working schedule, the report says. Further, some companies offer positive changes in pension plans to employees who delay their retirement.

But not only are workers staying on their jobs longer, Maestas points out that many people go into "unretirement," or retiring and then finding work in a different field.

"There is an increase in the number of people who are undertaking less traditional retirement paths," she says.

When it comes to the issues of Social Security and Medicare, delayed retirement will keep workers in the labor force paying taxes. Not only will the money in the Social Security trust fund increase, workers who receive health coverage from employers, won't use Medicare as their primary insurer until later in life, explains Maestas.

But while retirement is delayed, there are still obstacles facing older workers. Even if they stay in the workforce, older laborers might opt for part-time work, which might not include health insurance.

The researchers point out that employers need to create incentives that encourage delaying retirement, rather than early retirement.

"Encouraging work at older ages serves a variety of social goals, including counteracting the slowdown in the labor force growth and shoring up the finances of Social Security and Medicare," the report says.

"We should consider removing the disincentives to delaying retirement and let people make the decision about whether they want to remain in the work force or not," Zissimopoulos said in a Eureka statement.