The article suggested that the rise in the income of older Americans was due to the increased wealth of the retiring baby boomers. On course it is another 5 years until we really see a lot of baby boomers retiring.

Can you estimate how much of the income for those over 65 was boosted by higher employment and how much was due to greater retirement wealth?

If that rise in senior employment doesn't scare some people I don't know what will.

While there is always a segment of "retirees" who will continue to work in some form because they enjoy it, the fact that suddenly 5% more of the entire senior population is working doesn't likely indicate growth that is all fun and games.

Also, while I am a big fan of your site, and linking to major media stories about subjects is always useful, in a case like this, you might want to point to the original source for the data as well. As internet use evolves, I think there are a lot more people interested in reading such information without any filter.

Scanning a lot of media the increase in senior employment seems to come from two different groups.

1) those who need to work
2) those who want to work

I think both economists and sociologists need to watch this carefully and see how it develops.

Well it took a while to track down. There was a change in law to eliminate the penalty for working after full retirement age. Previously after a certain dollar amount you lost a dollar of retirement benefits for every two dollars of earnings. The change went into effect in 2000. Since it would have taken some time for the word to spread and for retirees to reenter the work force you would expect the effects to not show up before 2001 at the earliest.

PL 106-182 Senior Citizens Freedom to Work Act enacted 4.7.00

"Section 2 eliminates the Social Security retirement earnings test in and after the month an individual attains full retirement age (FRA); effective for tax years ending after 12/31/99."

The offset was a huge disincentive to work and the change in labor force participation may be largely due to its elimination. Certainly some of the effect has to come from this direction.

Bruce,

I don't think the SS earnings test had much to do with the change in EPOPs for older workers. It has risen by 3.4 percentage points for workers between ages 70 and 74 (13.1 percent to 16.5 percent), and there never was any earnings test for this age group.

Well you are the man. But my understanding was that while there was no limit on income there was a continuing offset based on wages earned. That is no penalty for returns on investment but still a offset for wage income after retirement. I was not aware that this vanished at some advanced age.

The federal poverty line was set in 1968 at three times the price of an emergency diet -- which calculation happens to result in what HALF a sensible poverty line would be today. People like to argue about whether the poverty line should rise with improving standards of living. What relevance to living standards can a multiple of food prices have?

As long as nobody seems willing to raise a hackle over this absurd, arbitrary way of measuring poverty, I propose raising the federal poverty line immediately to SIX times the price of an emergency diet. :-)

The age when an individual can take full social security benefits has been lengthening in recent years. But you can still take reduced benefits at age 62.
But if you take reduced benefits there is a penalty tax rate on your earnings until you reach the age where you are eligible for full benefits. Once you reach full retirement age there is no penalty rate on earnings.
There use to be a penalty rate on earnings above a certain level no matter what your age.

Denis Drew wrote, "The federal poverty line was set in 1968 at three times the price of an emergency diet -- which calculation happens to result in what HALF a sensible poverty line would be today. People like to argue about whether the poverty line should rise with improving standards of living."

The problem with that is that some costs decrease over the long run due to technology; food certainly has overall. But other costs increase. In particular, land rents tend to increase in step with GDP, because land is a fixed resource with zero elasticity of supply.

While it might not apply to the rural poor, who often live on marginal land, the urban poor and working class really get hammered by housing costs, much of which is for land not improvements.

The SS earnings test did not apply to workers over age 72 before 1982 and to workers over age 70 since 1982. It was also set a fairly high level, so that most workers doing part-time work would not have been affected by it.
You can find the story in 1999 Trustees Report, Table II.E.2 [http://www.ssa.gov/OACT/TR/TR99/tr99.pdf]