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Mellody is President of Ariel investments, a Chicago-based money management firm that serves individual investors and retirement plans through its no-load mutual funds and separate accounts.  Additionally, she is a regular financial contributor and analyst for CBS news.

Mellody: This morning we are talking about the changing face of America’s labor force. This past week was national older workers week, and there is really no better time to cover the aging of the country’s workers. And while it isn’t an IPO, and it isn’t about your credit score, this topic affects everyone out there who currently holds a job, who is looking for a job, or is about to retire.

Tom: Why is the workforce aging?

Mellody: Well tom, it is really pretty straightforward. Americans are working much later into their life for a combination of reasons. Perhaps the biggest reason is that people are simply living longer and are remaining healthier later in life. Because of this longer life expectancy, Americans are being forced to save for a much longer retirement. For a little comparison, let’s look at some numbers. In 1970, the average American life expectancy was about 71 years old, and for our community it was just 64 years old. In 2010, those numbers were 79 and 75 respectively. think about that: based on a retirement age of 65, 40 years ago the average American could be expected to be retired for just 6 years, and the average black American was not even expected to reach retirement age! Now, because people are living longer, they will have to save for much longer retirements, particularly women. This coupled with the fact that people are remaining healthier longer, means that people are staying in the workforce longer. Finally, the economic downturn took a heavy toll on the savings of most Americans. These three factors go a long way toward explaining why we have seen the trend line change toward longer careers.

Tom: Ok. Give us an idea of what we are seeing here.

Mellody: A recent study found that between 1950 and 1990, labor force participation rates fell among older workers and rose among younger ones. But this is no longer the case, particularly among men. According to census bureau data, labor force participation rates for older men have risen steadily over the past 25 years. Among men ages 65 and over, for example, 24% are now in the workforce, up from 17% in 1990. For those ages 55 to 64, 70% have jobs or are looking for work, up from 67% in 1990.  Meanwhile, younger men are experiencing the opposite: for 25 to 54 year olds, labor force participation rates have declined from 93% in 1990 to 88% today. The trends for women are the same, but do not show as drastic as shift due to labor participation rates among women steadily increasing. Workforce participation rates have jumped for women of all ages since the 1950s, more than doubling for women ages 55 to 64 and nearly doubling for those 65 and older.

And this is not likely to change any time soon. In 2013, 43% of full-time employees reported that the age at which they plan to retire has gone up over the past three years—up from 34% who said the same in 2009. Moreover, almost 75% of those putting off retirement plan to do so for three or more years. Overall, half of those surveyed said they plan on retiring after age 65, and jump of 9% from 2009 – and nearly one in three (30%) said they plan to retire when they are 70 or older.

Tom: How are younger workers impacted?

Mellody: So this is an interesting debate, tom. Some think that as long as older workers remain in the workforce, they are preventing younger workers from moving up. 34% of workers under 40 believe that retirement delays among older workers are restricting their career opportunities. Others contend that that assumes that there are only a certain number of jobs.

In terms of the broader picture: the great recession destroyed a huge number of jobs, and those jobs were slow in coming back. As a result, fewer young workers have been able to get their initial job in the workforce. Wage stagnation has played a huge role in the lives of workers across the age spectrum as well, meaning that saving and investing is more difficult to do than before. So, this has been a time of big changes in the labor force, and younger workers have been impacted disproportionately.

Tom: So what should we take away from this new trend in America’s labor force?

Mellody: I think the big takeaway should be that retirement is a huge catalyst for the career decisions of all Americans, and it has to be on the front burner for every person out there, regardless of age. Two recent fed reports underscore how few Americans are paying attention to their retirement until it is too late. One found that almost half of Americans had not planned financially for retirement. nearly a quarter of respondents (24%) said they had only thought a little about planning for retirement, and another quarter (25%) said they had given it no thought at all. another report found that ownership of retirement accounts fell below the 50% mark in 2013, continuing a downward trend.

This has to stop if Americans are to be prepared later in life, regardless of workforce participation. I know it can be hard to prioritize retirement, but you have to start somewhere. My first tip? Reach out to someone. If you have a retirement savings option through your employer, talk to HR. about that plan. If not, do some research and talk to a few investment services. Don’t be scared to take this first step and get informed. Secondly, start saving right away – don’t put it off. Regardless of whether you have an employer retirement plan or not, you need to start putting away whatever amount you can afford. Contributions to most retirement funds are pre-tax, meaning that what you save is deducted from your overall taxable income, and might even save you some money in taxes.

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MONEY MONDAYS: What To Know About America’s Aging Workforce  was originally published on