Less Seniors Relying on Investments for Income, Working Full-Time Instead

The financial, health and well-being incentives of continued employment could provide seniors greater independence as well as retirement reassurance, suggests a recent study by Boston College finding that more are relying on income from employment than from investments. 

Despite current retirement security concerns, seniors have seen their income almost double in the past twenty years, according to a paper from Boston College’s Center for Retirement Research. 

Since 1990, Americans aged 65+ have seen their continued employment income jump from 18.4% to 31.2% in 2010.


Of note is the largest portion of this increase, which the study mentions is driven by seniors reporting full-time employment. 

The shift among seniors postponing retirement has sequentially reduced their dependence on income from investment assets.

In 1990, 24.5% of senior income was derived from investment assets. By 2010 this portion had fallen by more than half, accounting for 11.3% of total senior income. 


Finding little evidence that trends in earned income and asset income were closely related as the primary motive for seniors to continue working, the report suggests several contributing factors.

First, a decline in the availability of retiree health insurance coverage encouraged many older workers to remain in the labor force, in the years prior to Medicare eligibility.

The drop in retiree health insurance coverage from 40% to 18% of workers was the single largest factor for among men, according to the report, while for women it was less important since they already started with a lower level of coverage.

Second, pension coverage such as the replacement of defined-benefit (DB) retirement plans to defined-contribution (DC) plans dissuaded many from retiring, the study notes, as DBs created greater incentive for early retirement since workers could not receive the benefit until they left the job.

Lastly, the study points out a steady increase in the education of older workers, citing that the number of workers aged 65 with a college degree are roughly twice those of workers with less than a high school degree. 

Additionally, the study’s lead authors Barry P. Bosworth and Kathleen Burke believe that incentives for increased labor participation could reflect longer life expectancy, as well as reduced rates of morbidity.

“Overall, we believe that the changes in the source of income of the elderly are consistent with sustained improvement in their economic well-being,” writes Bosworth and Burke.

Read the abstract of the report here.

Written by Jason Oliva