The 50-Plus Job Market: 5 Trends to Watch

Working longer is a mantra these days for many Americans hoping to build greater retirement security. Staying on the job even a few years beyond traditional retirement age makes it easier to delay filing for Social Security; it also can mean more years contributing to retirement accounts and fewer years of depending on nest eggs for living expenses.

But since the Great Recession, staying employed has been easier said than done for all workers. The economy has continued to mend gradually, and the job market has improved. How are older workers faring? The picture is mixed.

More older workers are participating in the labor force, and they experience lower unemployment rates than younger workers. Still, problems remain. Most workers think age discrimination by employers is commonplace. And older workers who do lose their jobs tend to be out of work longer and earn less when they do secure new employment.

If you're in the ramp-up years to retirement and aspire to stay employed past traditional retirement age, here are five key trends to watch.

1. Desire to work longer is rising.
An AARP survey released earlier this year found that 70% of Americans plan to work in retirement. But that doesn't necessarily mean sticking to the schedule--or work--that they're doing now. Twenty-nine percent plan to work part time because they enjoy working; 23% said they'd work part time because they need the income. Thirteen percent intend to start a business or work for themselves; 5% expect to retire and work full time in a new career.

Another trend that is gathering steam is the encore career--second careers focused on social engagement and meaning. Interest in encore careers rose by 17% from 2011 to 2014, according to a survey by Encore.org, a nonprofit dedicated to promoting the encore concept.

Participation in the labor force--that is, the percent of people working or actively seeking work--is rising among older workers. In July, 40.1% of 55-plus workers were in the market, up from 38.9% when the recession started. Most experts expect that figure to continue ticking upward in the years ahead. The U.S. Bureau of Labor Statistics (BLS) forecasts that 67.5% of people over age 55 will be participating in the labor market in 2022, up from 61.9% in 2002.

2. Unemployment is down.
Joblessness for older workers is lower than the overall national unemployment rate, and the trendline is improving. In August, 4.6% of workers over age 55 were jobless, compared with 6.1% of the total workforce. A year ago, the 55-plus unemployment rate was 5.1%, according to the BLS.

Fewer 55-plus workers are citing job loss these days as the key reason that they are not working--19% in July, compared with 24% at the end of 2007, according to the U.S. Census Bureau. And a Gallup survey released last month found just 13% of workers over age 50 are worried about layoffs, compared with 29% of people under age 35, and 15% of 35- to 54-year-olds.

"If you have a job, chances are pretty good you will be able to hang on to it," says Sara Rix, senior strategic policy advisor for the AARP Public Policy Institute. "Many companies went through disruption during the recession--changing hands and letting go of people. But the labor force data tells us that the older population has been faring pretty well."

3. Length of joblessness is longer.
Many older works without a job, however, have had a hard time finding one. Long-term unemployment remains a critical problem for the 55-plus crowd. Workers age 55 and older needed 42.4 weeks, on average, to find new work, according to the August BLS jobless report--much longer than the 29.1 weeks needed for younger people to find new work.

Still, 41.4% of 55-plus jobless workers were classified as long-term unemployed last month. And when older workers secure new jobs, they're likely to earn less. One study found that displaced workers will earn 14% to 19% less for the rest of this decade than workers who stay employed continuously--and that they are up to 8% more likely to experience another layoff.

One bright spot in the data on chronic joblessness: The number of weeks needed by 55-plus workers to find new work is falling. A year ago, the average was 50.4 weeks.

4. Age discrimination remains a major worry.
The federal Age Discrimination in Employment Act (ADEA) of 1967 makes it illegal for employers to discriminate based on age in hiring or firing practices. Cases of discrimination in hiring are nearly impossible to prove, and the number of complaints filed with the U.S. Equal Opportunity Employment Commission alleging age-related discharge has stayed fairly steady in recent years--1,185 cases were filed in 2013.

But the AARP survey (which queried workers age 45-74) found that 64% have seen or experienced age-based discrimination in the workplace--and nearly everyone thinks it is commonplace.

The key implication: If you're hoping to work longer, hang on to your current job for dear life. "Anyone in the Boomer generation who anticipates working to an advanced age either by choice or out of necessity would be well advised to stay with the current job, whether on a full-time or part-time basis, unless he or she has the wherewithal to become an entrepreneur," says Elizabeth Fideler, a research fellow at Boston College's Sloan Center on Aging & Work.

She adds: "Many seniors favor self-employment, consulting, and business ownership because they make it far easier to continue working, to maintain earning power, and to enjoy a degree of flexibility in terms of one's schedule and stamina."

5. Over-70 crowd is pushing the envelope.
Working longer isn't just for people in their 60s. Increasing labor force participation rates actually are most dramatic among men and women in their 70s and 80s, according to Fideler, who has written two books on the phenomenon--one about older women at work (Women Still at Work: Professionals Over Sixty and On the Job) and one about men (Men Still at Work: Professionals Over Sixty and On the Job).

"Seniors enjoying good health and the prospect of greater longevity stay on the job because they can," she says. "When they love what they do, they don't want to stop."

Fideler points to BLS projections showing that labor force participation for people age 65-74 will be nearly 32% eight years from now--about a 6% increase from 2012. And the rate for those age 75 and older, while comparatively low, is projected to rise nearly 3%, to 10.5% over the same time period.

Mark Miller is a retirement columnist and author of The Hard Times Guide to Retirement Security: Practical Strategies for Money, Work, and Living. The views expressed in this article do not necessarily reflect the views of Morningstar.com.