Out goes a president, Ronald Reagan, who is 77 years old. In comes a new president, George Bush, who is 64.
It makes one wonder what ever happened to the youth movement in American politics.Our senior citizens seem to be spending a great deal of time in the White House these days.
Reagan and Bush are exceptions, however. Most men are out of the work force by age 63; only 30 percent are still working at 65. Federal law says mandatory retirement is illegal, but the statistics say we quit as soon as we can.
For one reason or another, we like it that way.
"The fact that many healthy older persons may be happy not working is often overlooked," says the Department of Labor.
Let's concede that millions of Americans - perhaps a majority - would prefer a life of leisure to a life of pushing paper around, or digging ditches, or shouting into a telephone. But that's not the whole story. Some older Americans who want work are having a hard time finding it, or keeping it, or making money at it.
A new report by the Bureau of Labor Statistics points out that:
- Some early retirements are the result of pension policies that penalize continued employment beyond a certain age.
- Retirement often masks the fact that some older workers retire only after losing a job. They retire because they've been fired.
- Older workers have more difficulty finding a new job than younger workers. They're not as employable.
- When they do find new jobs, they often take big pay cuts.
- Employers usually give older workers a choice between full-time work and complete retirement, with no part-time option.
"Early retirement is an attractive way (for employers) to make work force adjustments, perhaps even avoiding layoffs, and to cut labor costs," says the report. "In that environment, older persons may be pushed from their jobs."
One of the financial deterrents to working beyond 65, or even beyond 62, is the loss of Social Security benefits.
A retiree who starts drawing benefits at 62 loses $1 in Social Security benefits for every $2 he or she earns over $6,480 a year. A retiree who starts drawing benefits at 65 loses $1 for every $2 he or she earns over $8,880 a year.
The Labor Department considers such restrictions unfair because they apply only to earned income, not to investment income. Thus, a retiree living off interest and dividends can draw full benefits while a retiree who must work to supplement his or her income draws only partial benefits, or no benefits at all.
Fair or not, this "earnings test" applies to Social Security benefits until a worker is 70 years old.
An obvious trade-off would be to eliminate the earnings test and make Social Security benefits completely taxable from the first dollar, but no one has been courageous enough (or foolish enough) to recommend such a thing.
It wasn't too many years ago that early retirement was considered a good way to make room for the young. Now the labor experts are complaining that we don't have enough skilled workers, that we need some of these old hands who quit at 60, or 62 or even 55.
The flaw in early retirement is that the wrong people, the most productive people, are the ones who tend to retire early - if they haven't been elected president of the United States, that is.