Alliance America Logo Contact About Us Articles Home
Silhouetted figures of diverse workers, including older Americans and seniors, walking in a city

Employment after 65: Older Americans have both challenges and opportunities

by Alliance America
March 7, 2025

Share

An increasing number of retirement-age Americans are choosing to remain employed or re-enter the job market. An extensive study by Pew Research found that nearly 20% of people 65 and older were employed in 2023. That compares to about 10% of Americans age 65 and above in 1990. This trend is driven by many factors, including financial necessity, a desire to stay active and the need for social engagement. However, older workers can face unique challenges, such as age discrimination and physical limitations in joining the workforce later in life.

Research by the Society for Human Resource Management (SHRM) reveals that age discrimination, unfortunately, remains a significant barrier, with 30% of U.S. workers reporting unfair treatment due to their age during their careers. This trend of delayed retirement, coupled with widespread age-related workplace challenges, has created a new reality for older Americans seeking to remain professionally active.

The intersection of financial necessity, personal fulfillment and workplace discrimination has become a defining characteristic of the modern senior employment experience. As the workforce continues to age and retirement patterns shift, understanding these challenges and opportunities becomes increasingly crucial for both employees and employers.

Why is retirement so expensive?

Financial charts and a calculator displaying 'Expenses' symbolize the financial challenges of retirement for American seniors and the potential impact of age discrimination on their careers and employment.

One of the most significant factors making retirement more expensive is that people are living longer than ever before. While this is certainly positive news, it means retirement savings need to last much longer than in previous generations. A person retiring at 65 today might need to fund 20 to 30 years of retirement, compared to just 10-15 years a few decades ago. This extended retirement period requires substantially more savings to maintain the same quality of life.

Health care expenses have been steadily increasing over the years, outpacing general inflation, and long-term care expenses can be catastrophic for retirees. The combination of higher health care costs and increased longevity creates a significant financial burden that many retirees are unprepared to handle.

In addition, Americans approaching retirement age find that their expected retirement income falls short of what's needed to maintain their current lifestyle. A study by The Pew Charitable Trusts found that households with incomes between the poverty line and $75,000 are likely to fall short of their target retirement income by an estimated $7,050 a year. This gap often motivates older workers to remain in the workforce longer to build up additional savings or to supplement their retirement income.

Meanwhile, the landscape of retirement benefits has changed dramatically over the past few decades. Traditional pension plans, once a cornerstone of retirement security, have become increasingly rare in the private sector. In the mid-1980s, about half of private sector workers were covered by defined-benefit pension plans. This number has dropped to about 15%, according to media reports.

As a result, older Americans find themselves extending their careers due to financial considerations.

What is the best job for a retired person?

Many older Americans discover fulfilling second careers and work arrangements that effectively leverage their experience. Some find success in consulting roles that utilize their industry expertise, while others transition to part-time positions that offer greater flexibility. Many older workers excel in mentorship and advisory positions, where their years of experience provide particular value. Some choose to pursue entrepreneurship and small business ownership, while others embrace remote work opportunities that allow them to contribute while maintaining work-life balance.

What are some challenges that older workers face?

An older American worker experiences stress at his workplace, possibly facing age discrimination and employment challenges as he nears retirement.

Discrimination against older workers is a major challenge. Age discrimination takes two primary forms in the workplace: hiring bias and day-to-day treatment, according to SHRM researchers. In the hiring process, older workers frequently face limited interview opportunities, with potential employers questioning their long-term commitment and expressing concerns about salary expectations based on their experience level. Once employed, older workers often encounter systematic exclusion from training opportunities, face barriers to career advancement and experience social isolation within their teams.

Technology competency represents one of the most significant stereotypes facing older workers, with SHRM's research indicating that 49% of people managers report older employees being perceived as technologically incompetent. This perception creates ongoing challenges for senior workers, who must continuously develop their technical skills while fighting against preconceived notions about their adaptability. Many struggle to access appropriate training and development opportunities, making it increasingly difficult to keep pace with rapid technological changes in the workplace.

Meanwhile, while many older workers maintain high levels of capability and productivity, they often face unique physical demands in the workplace that require careful consideration. These challenges include adapting to workplace ergonomics, which may need modification to accommodate changing physical needs. Many must develop strategies for managing energy levels and stamina throughout the workday while also accommodating more frequent health-related appointments. The balance between work demands and self-care becomes increasingly important, particularly for those managing chronic health conditions. Despite these challenges, many older workers successfully adapt their work routines and environments to maintain their productivity and job satisfaction.

What qualifies as age discrimination?

A red cutout figure of an older American with a cane stands apart from a line of white figures, symbolizing potential age discrimination against seniors and older workers in employment and their careers before retirement.

Age discrimination occurs when an individual who is 40 years of age or older faces adverse treatment in any aspect of employment specifically because of their age, according to the Department of Labor. Despite the valuable experience and knowledge older workers bring to the table, age discrimination remains a significant issue in the workplace. According to SHRM research, 30% of U.S. workers report feeling unfairly treated due to their age at some point in their career.

Under the Age Discrimination in Employment Act of 1967 (ADEA), protections extend to all facets of the employment relationship, from the initial job posting and hiring process through to retirement or termination. Discrimination can occur in various forms, including denial of opportunities for advancement, inequitable compensation or benefits, unfavorable job assignments or exclusion from training programs.

Age-based harassment is a significant form of discrimination addressed by the ADEA. While casual remarks or isolated incidents may not rise to the level of illegal discrimination, harassment becomes unlawful when it creates a hostile or offensive work environment or leads to adverse employment decisions. This could include persistent offensive remarks about a person's age or any pattern of behavior that creates an intimidating or hostile workplace atmosphere. The law also specifically prohibits retaliation against individuals who oppose age-discriminatory practices or participate in discrimination proceedings.

It's worth noting that certain employment actions based on factors other than age, such as retirement status or eligibility for specific retirement plans, do not constitute age discrimination under the ADEA.

Conclusion

As the American workforce continues to evolve, the trend of delayed retirement and extended careers presents both opportunities and challenges for older workers. While financial pressures, increased longevity and changing retirement benefits drive many to remain employed, they must navigate age discrimination, technological adaptation and physical considerations. Despite these obstacles, many seniors find rewarding second careers that leverage their extensive experience. As this demographic shift continues, employers and policymakers must work to create more inclusive workplaces that value the contributions of older workers while addressing the unique challenges they face. Understanding and addressing these issues is crucial for building a more equitable and sustainable work environment for all generations.

Alliance America can help

Alliance America is an insurance and financial services company dedicated to the art of personal financial planning. Our financial professionals can assist you in maximizing your retirement resources and achieving your future goals. We have access to an array of products and services, all focused on helping you enjoy the retirement lifestyle you want and deserve. You can request a no-cost, no-obligation consultation by calling (833) 219-6884 today.

A mother reading a book with her daughter

Your legacy is vastly more than an amount of money left to your surviving beneficiaries. Part your legacy can be the example of a life well-lived that’s achieved through proper planning.

A senior couple stressed over tax liabilities

Too many people enter retirement with burdensome mortgages, car payments and credit-card debt that they’ve amassed during their working years. Proper management of these liabilities is fundamental to your current and future financial viability.

A daughter hugging her mother

Financial planning often is motivated by our love for our life partners, children, family members and friends.

Using a calculator to calculate taxes

Taxes have a significant impact your finances and can siphon assets unless you have a prudent approach to meet your objectives.