They “are worried their lifespan is going to outpace their wealth span," said Joseph Coughlin, director of the AgeLab at the Massachusetts Institute of Technology in Boston.

Changes in benefits for the elderly have been part of the equation. More retirement plans are based on employee contributions, which encourages working longer. The eligible age for social security has increased, and there are less costs associated with working while receiving benefits.

A chunk of seniors is also working because they want to. Like Levitt, they are using most of their additional income to improve their quality of life, and in turn contribute more to consumer spending, the largest portion of the economy. In 2014, those who are 65 and older spent about 97 percent of their income, according to the Labor Department’s Consumer Expenditure Survey. Comparatively, the overall expenditure share in the U.S. was 80 percent.

Among those still working is 73-year-old Sandra Engelson, who serves as the director of human resources for a construction company in New York. Engelson said she spends about 80 percent of her pay on dining out, traveling and going to the theater.

Better Lifestyle

"I’m not ready to live on my savings, which would not make my lifestyle the way I want it to be," she said.

Older workers like Engelson are "good for everybody," said  Gary Burtless, a senior fellow at the Brookings Institution in Washington and former Labor Department economist. "It means that older people are not so dependent on the young. They’re supporting themselves and they’re making contributions to social security, Medicare until later in life."

Most of the elderly who want to work are able to find it. On an unadjusted basis, the unemployment rate for those 65 and older was 4.1 percent in June, below the overall national rate of 5.1 percent. Even during the recession and its aftermath, the jobless rate for seniors didn’t jump as much as for the general population.

The increase in the participation rate for those over 65 still isn’t enough to make up for the total number of retiring baby boomers that is pushing down the overall participation rate. As more and more baby boomers hang it up, total participation will continue to decline, which means the economy’s ability to grow will slow, Maki said.

Yet, more elderly are refusing to slow down. A Pew Center analysis of Labor Department data showed that the proportion of 65 or older workers that are part-timers fell to 36.1 percent in May from 46.1 percent in May 2000.