Is It Time to Retire “Retirement?"
Part 1: How the knowledge economy changes everything
Posted Aug 06, 2019
I turned 62 last week. That’s now the typical age when Americans retire, so naturally, I’ve been thinking, “Is it time for me to retire, too?”
I didn’t have to think long about the answer: Heck no! I love what I do. I’m mainly a research psychologist, but I’m also an editor, an expert witness, and a writer of everything from this blog to textbooks to papers in scientific journals. I love it all, and I’d like to think I’m still getting better at all of it. Why would I want to stop?
That said, after 30 years as a professor at various universities, recently I made a shift to more independent and self-directed work. That change allowed me to do more of what I love to do, especially writing and editing, and less of what I deeply disliked (faculty meetings).
My shift is actually pretty typical for this generation of Americans. More and more, “retirement” does not mean a complete end to work but a shift to a different kind of work that is more self-chosen and flexible. About 70% of Americans now take a bridge job in their sixties that requires fewer hours a week and is less demanding than their previous job. Even though the typical “retirement age” in the U.S. is 62, 31% of Americans are still working at ages 65-69, and this percentage is increasing rapidly.
All this makes me wonder if it even makes sense to use terms like “retirement” or “retirement age” any more. From a historical perspective, the idea of retirement hasn’t been around very long. For nearly all of human history, people have simply worked until they died, or until they couldn’t work anymore and had to be cared for by younger family members. Work was physically hard: mostly farm work, for thousands of years, then industrial work during the past two centuries. It wasn’t until recently that societies became wealthy enough to provide their citizens with a nationally-funded retirement pension. Germany was the first, in 1888, followed by the rest of Europe. The U.S. was late to the party, with Social Security starting in 1935.
Through most of the 20th century, if you worked on a farm or in a factory you were probably pretty broken down, physically, by the time your reached “retirement age” of 65—if you were lucky to live that long. However, toward the end of the 20th century, the U.S. and other developed countries began a rapid transformation from an industrial economy to a knowledge economy based mainly on information, technology, and services. This transformation has entirely changed the nature of work. Previously, the older you got, the worse you got, because work required physical strength and stamina that are sure to diminish with age. However, in the knowledge economy, it’s expertise that matters, the accumulation of knowledge and skills in a specific area. Expertise grows with age, so now you can keep getting better at what you do for a long time, certainly through your 60s for most people and even through the 70s for a lot of people.
The transition to a knowledge economy has happened fast, so we still haven’t entirely recognized it or grappled with its implications for how we think about work and “retirement.” Here are three possible implications to consider:
1. It makes no sense to expect or encourage people to retire at age 62, or even age 65. There are many reasons people leave the workforce, but certainly one of those reasons is that other people expect them to go, by the time they reach “typical retirement age.” But why would we want to chase away the people who have the most expertise in knowledge-economy jobs? Transitioning to a bridge job makes a lot more sense because older workers get to have more freedom and flexibility but their younger colleagues retain the benefits of their expertise.
2. Knowledge economy work will become more flexible and mobile than work has ever been before. Because work in the knowledge economy mainly involves the collection and analysis of information, much of it can be done anywhere at any time. That’s why we’re now seeing the rise of telecommuting and of digital nomads who live wherever they want as they contribute to the knowledge economy. As the current young generation of digital natives grows older, expect the number of digital nomads to grow and expect telecommuting to rise among workers over age 65.
3. The economic gap between less educated and more educated workers is likely to rise unless policy steps are taken. Inequality within American society has risen in recent decades along with the knowledge economy. That’s mainly because the most productive, well-paying work in the knowledge economy requires the kind of expertise that starts with extensive education and training. Americans certainly do not have equal access to high-quality education in childhood, nor to college or graduate school. So, bold public policies are needed to keep inequalities from growing with the further spread of the knowledge economy, including: ending local funding for schools (which ensures that the rich get richer and the poor get poorer with each generation), and making tertiary education (college or some other form of training) free and universally accessible.
There’s lots more to say on retiring “retirement,” so this will be the first of a series of posts I’ll make on this topic. Send your comments my way so I can consider them for the next one!