Employees are increasingly working past the traditional retirement age. Explore the advantages of this demographic and the benefits essential to attracting and retaining them.
As employees rethink their relationships with work and retirement, it’s becoming common to continue working past the traditional retirement age.
According to the Bureau of Labor Statistics, 32% of individuals ages 65 to 74 will remain in the workforce by 2030. This figure compares to 27% in 2020 and 19% in 2000, notes Oloop Technology Solutions.
Voya Financial surveyed over 1,000 older employees and coined the descriptor “employment extenders.” Their research found two distinct groups within the employment extenders category:
- Employees 50 and older who switched industries. These employees retired from a previous career and then found a different type of job that aligned with their values, interests, schedules, or physical and mental health needs.
- Employees 65 and older who are working or plan to work past the traditional retirement age. These employees typically delay retirement because they enjoy their work, need the money for current expenses or haven’t saved enough to retire.
Whether employment extenders want to work for personal reasons or need to work for financial reasons, this trend has implications for employers, employees and retirement benefits.
The American Society of Pension Professionals & Actuaries notes that understanding the potential value of employment extenders is critical to HR and labor strategies. Learning about these employees’ needs and wants can boost your attraction and retention efforts, and inform your benefits offerings.
Employer advantages
The growing demographic of employment extenders creates an opportunity for employers ready to embrace their needs.
The industry news site BenefitsPRO highlights their decades of experience. Your organization can leverage senior employees’ institutional knowledge and real-world expertise for individual contributions and team performance.
Employment extenders can mentor new and younger employees on various technical and soft skills, including:
- Interpersonal communication
- Office politics
- Project management
- Negotiations
- Public speaking and presentations
- Self-awareness of strengths and weaknesses
- Career development
BenefitsPRO notes a decline in workplace social skills. Older employees often model proper office behavior, work ethic, customer interactions and other vital skills.
Employment extenders can also help address labor shortages. Hiring experienced workers can allow your organization to infuse new perspectives, problem-solving abilities and big-picture thinking. In addition, retaining employment extenders can be particularly advantageous. Keeping quality employees is less expensive and time-consuming than finding, recruiting and training new ones.
According to Voya, most employees don’t return once they’ve retired. It’s easier to retain them than to bring them back. Benefit offerings can play a crucial role in retaining employment extenders.
Benefits to attract and retain older employees
The Voya survey indicated that the following benefits can support employment extenders and enhance your attraction and retention efforts.
Retirement plans. In the Voya survey, 43% of employment extenders said they need or want more money to cover current expenses and reach retirement goals. Sixty percent of respondents have less than $500,000 in retirement savings, and 30% have less than $100,000.
A retirement savings vehicle such as a 401(k) plan can increase retirement security. Automatic enrollment, employer matching contributions and information on catch-up contributions can enhance your offerings.
Financial and retirement education. Many older employees still need foundational financial skills. Managing credit card and student loan debt are top challenges to retirement security. BenefitsPRO says individual borrowers ages 50 to 61 have the highest average student loan debt at $45,000.
The Voya survey showed that even employees with ample retirement savings worry about cost-of-living increases or how their savings and investments translate to retirement income.
Tools for estimating retirement income needs and understanding income streams can help employment extenders understand their retirement readiness. Education and vetted information on topics like Social Security, Medicare, required minimum distributions and withdrawal strategies can further prepare employees for retirement.
Caregiving benefits. Health data suggests many individuals will face caregiving needs for partners, family, friends or themselves. According to BenefitsPRO, 24% of Americans ages 65 to 74 have a disability. That number jumps to 46% for ages 75 and older. About 25% of caregivers providing regular assistance to a family member or friend are ages 45 to 64, and almost 20% are 65 or older.
Despite these figures, Voya found most employment extenders are not planning for long-term care, caregiving needs for loved ones, or the possibility of being incapable of working due to physical or mental health challenges. Understanding and preparing for these eventualities can make or break retirement savings.
Benefits such as patient navigation services, online caregiver platforms, leave management and financial counseling can support working caregivers. Connecting employment extenders to caregiver support groups and community-based resources can meet current and future caregiving needs.
Workplace flexibility. Flexible work options allow older employees to continue working while transitioning to full retirement. Options such as remote or hybrid work schedules, reduced hours and job sharing can help your organization retain skills and knowledge. It can also allow employment extenders to save more for retirement and find meaning from their work.
Mental and physical health benefits. In addition to their financial concerns, employment extenders are interested in their psychological and physical transition to retirement.
Many survey respondents said they want to continue working to stay physically and mentally active and maintain a sense of purpose. Education and planning can help employees identify ways to meet these needs in retirement.
Affordable, accessible mental health benefits allow employees to monitor their emotions as they transition through life stages. Physical health benefits such as on-site yoga, gym reimbursements and online fitness classes can help employment extenders create good habits for movement, flexibility and strength as they age.
Voya recommends beginning retirement planning at least 10 years before retirement to ease the transition, increase confidence and improve preparedness. (But it’s important to ensure that these efforts don’t appear to be pushing older workers out of the workforce prematurely.)
Explore your benefits offerings
Your current benefits programming may provide many of these solutions. Instead of adding new benefits, you may need to target communications to connect older employees to your offerings.
For example, personalize communications on how employees can maximize benefits dollars to increase their retirement health and wealth. These communications may include retirement income calculators, withdrawal strategies, worksheets on how they will spend time in retirement, and volunteer opportunities. This strategy can prepare employment extenders for life after work and help your organization get more value from your benefits budget.
Personalized communications and benefits demonstrate care for employees and provide a way to stand out. Respondents in the Voya survey said many employers offer generic retirement information and little guidance in planning for life after work.
For more information on this growing demographic, talk to OneGroup’s Human Resources Consulting Team. They can help you examine how your benefits offerings align with the needs of employment extenders and your business goals.
This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.
Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.
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