The biggest spike inemployment has gone to college-educated older workers. (Photo:Shutterstock)

(Bloomberg) –Just as single-income families began to vanish inthe last century, many older Americans are nowforgoing retirement for the same reason: They don't have enoughmoney.

Rickety social safety nets, inadequate retirement savings plansand sky high health-care costs are allconspiring to make the concept of leaving theworkforce something to be more feared than desired.

For the first time in 57 years, the participation rate in thelabor force of retirement-age workers has cracked the 20percent mark, according to a new report from money manager UnitedIncome.

As of February, the ranks of people age 65 or older who areworking or seeking paid work doubled from a low of 10 percent backin early 1985.

The biggest spike in employment has gone to college-educatedolder workers; the share of all employees age 65 or olderwith at least an undergraduate degree is now 53percent, up from 25 percent in 1985.

This rise of college-educated older workershas pushed the demographic's inflation-adjustedincome up to an average of $78,000, 63 percent higher than the$48,000 older folks brought home in 1985.

By comparison, American workers below the age of 65 saw theiraverage income rise by only 38 percent over the same period, to anaverage of $55,000.

United Income's calculations draw on recently released data fromthe Census Bureau and the Bureau of Labor Statistics (BLS).There'sa mismatch between older workers who need the income themost and those who are able to work and working,said Elizabeth Kelly, senior vice president of operationsfor United Income and a former special assistant to the presidentat the White House National Economic Council during theObama administration.

“These are the more educated, wealthier individuals in betterhealth who are continuing to work, but it's probably theirless-educated, working-class counterparts who need to work themost,” Kelly said.

The BLS expects the big wave of aging baby boomers torepresent the strongest growth in the labor force participationrate through at least 2024. “By 2024, baby boomers will havereached ages 60 to 78,” a BLS report noted. “And some of them areexpected to continue working even after they qualify for SocialSecurity benefits.”

The retirement math is ugly, even for those who are seeminglywell-off. Teresa Ghilarducci, an economics professor at the NewSchool for Social Research, has estimated that Social Securityreplaces about 40 percent to 50 percent of one's pre-retirementincome.

The general thinking is that people need around 80 percent ofpre-retirement income to get by after they stop working.(Online retirement calculators can give a rough sense forwhat you need to save, and earn on savings, to get there.)

The typical worker in the bottom 50 percent of the incomedistribution, earning less than $40,000 a year, has no retirementsavings. Those in the middle 40 percent of income distribution,earning from $40,000 to $115,000, have a median amount of $60,000saved, according to Ghilarducci's research.

Workers in the top 10 percent of income distribution making morethan $115,000, meanwhile, have a median amount of $200,000saved. They, too, are woefully under-saved, although it'sworth noting that these calculations don't include realestate and other tangible assets, or the chance ofan inheritance.

Ghilarducci's rough estimate of what a typicalcollege-educated professional must amass to retire fairlycomfortably? “Over $1 million or 2.”

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