Seniors who work longer could be helping to save Medicare, Social Security

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The growing number of Americans who decide to delay retirement could take some of the financial burden off the two programs, an analysis by a research organization finds.

Researchers at the nonprofit RAND Corporation predict that the trend for older Americans to delay retirement will continue—and even accelerate—in the coming years. Between 1990 and 2010, the percentage of seniors aged 65 to 75 who remained in the workforce rose from 17% to 25%, according to the study. While the Bureau of Labor Statistics expects the trend to slow and plateau beginning this year, RAND researchers suggest there is adequate incentive for older workers to remain at work, and projects the percentages to continue increasing through 2030.

Because this trend would mean savings to, and additional income for, the Medicare and Social Security programs, lawmakers should consider creating incentives to encourage older workers to remain in the workforce, and for companies to hire older workers, RAND researchers say. The report appears in a recent edition of the Journal of Economic Perspectives.