It’s a new year and people’s worries about retirement security remain high. Policymakers at all levels can help or hinder retirement security in 2019. Much of people's concern over retirement stems from uncertainty about jobs at older ages since many people would like to work longer, either to remain productive or to supplement their small savings. Other worries center around savings, Social Security, high debt and rising health care costs.
Against this backdrop, policymakers can shape five economic trends in 2019: jobs, savings, Social Security, debt and health care. These policies will substantially help or hinder improvements in retirement security .
First, policymakers in Congress and the administration need to keep a close eye on the labor market. Continued labor market growth will be necessary to reduce retirement income inequality. Having a job allows people to save more. Older workers in particular may be able to offset limited retirement savings by working longer if more opportunities for good jobs exist.
The labor market indeed delivered some welcome news for older workers in 2018. The unemployment rate for workers from 55 years old and older fell below 3.0% in the fall of 2018, the lowest level since 2001. At the same time, the employed share of people in this age group rose to 39.0% in November 2018, its highest level since 1962.
Some groups of older workers, though, struggle more to find a job than others do. Unemployment rates are higher and employment opportunities scarcer for African-Americans and Latinos than for whites, for example. Further labor market expansion could help to shrink these gaps.
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