For the millions of Americans approaching retirement, the decision to leave the workforce is rarely just about numbers. A 62-year-old couple staring at Social Security statements and a calculator must weigh financial security against the allure of travel, family time, and leisure. But new research suggests the calculus is missing two critical factors: longevity and economic impact.
Longevity Gains from Staying on the Job
Men who retire at 62—the earliest eligibility age for Social Security—face about 20 percent higher mortality than those who keep working, according to data from the Health and Retirement Study. The evidence for women is less definitive but points in the same direction. The longevity advantage appears tied to the intangible benefits of work: purpose, social connections, and the satisfaction of being needed. People who remain employed into their 60s report stronger social ties and a greater sense of purpose, which are closely linked to better health outcomes.
This runs counter to the popular image of retirement as a well-earned reward. But the data suggests older workers are not just productive—they are often as productive as the average worker. Those on the cusp of retirement earn roughly the economy-wide average, and the fear that they crowd out younger workers is unfounded. Decades of cross-country evidence show that where older workers stay employed longer, younger workers do better. Experienced employees pass on knowledge through mentorship and on-the-job learning, fostering innovation and demand that benefits everyone.
The Economic Ripple Effect
The second omission from the Social Security statement is macroeconomic. With approximately 145 million full-time equivalent workers generating about $32 trillion in goods and services annually—roughly $220,000 per worker—each year delayed by the 3.8 million Americans who retire annually would add about $836 billion in output. Accounting for the timing and financing of Social Security and Medicare benefits, the total economic gains approach $1 trillion a year.
This isn't a blanket argument for everyone to keep working. About 19 percent of workers aged 55 to 64 report health-related limitations, and those in physically demanding jobs—construction, manufacturing, home health—may not have the option even if they want it. The decision must remain with the worker, and the analysis speaks to those who genuinely have the choice.
After 40 years on the job, no one should feel obligated to continue. But Americans approaching retirement today are healthier and more capable than any previous generation. When they leave the labor force, we all lose something valuable.
Dana Goldman is the founding director of the USC Schaeffer Institute for Public Policy & Government Service, and Anup Malani is chief economist of the Centers for Medicare & Medicaid Services. The Schaeffer Center receives funding from foundations, corporations, individuals, an endowment, and government agencies, including a contract with CMS to conduct economic and policy analysis.
