Americans pushing back retirement or rejoining workforce
Voya surveyed two major groups of older employees that it considered employment extenders. Workers aged 50 or older who had previously retired but then rejoined the workforce in a different role accounted for one half of respondents. The rest were at least 65 years old and were either working or planning to work past retirement age.
Nick Bunker, a labor economist at Indeed, says the number of “unretirements” (the phenomenon of retirees heading back to work) is moving toward 3% again after peaking at 3.2% in March 2022, according to his company's analysis of U.S. Census Bureau data.
Part of that, Bunker says, can be explained by movements caused by the COVID-19 pandemic. In the early days of the crisis, many older workers were either pushed out of the workforce or voluntarily stepped back in order to prioritize their health and safety.
But now Bunker says many of those workers have returned to the labor force.
“And now we're sort of normalizing back to what you expect in a strong labor market,” he told Moneywise.
Employers also need more workers to fill in the gaps
Older workers are more inclined to be employment extenders these days, Voya's report says, with nearly a third of those aged 65 to 74 expecting to be working in 2030, compared with 27% in 2020 and 19% in 2000.
For employers, the news that older workers are remaining in the office may come as a relief. As America contends with a rapidly aging workforce, those bums in seats are desperately needed — and that gives experienced employees an edge.
Jessica Tuman, head of Voya Cares and ESG practices at Voya Financial, told Moneywise that older workers have greater bargaining power now, thanks to the tight labor market.
Older workers have the institutional knowledge on how to perform in their jobs and can serve as mentors to new and younger employees. Employers can also save on the costs of hiring and training new workers — many of whom may either lack the experience or are less likely to remain loyal to just one company.
Tarnoff notes older workers can stay up to date on workplace trends and add new skills to their repertoire to compete with younger workers as well. And with Americans living longer, enjoying their work and having access to employment, Tuman says the convention of retiring at age 65 needs to be revisited.
“It's vital that older workers dive in and roll up their sleeves along with everybody else," he said. "There is no reason why an older worker can't learn the same remote work skills and technology skills as a younger worker.”
Workplaces need to initiate these conversations
With many companies in dire need of hires, employers need to consider how best to retain their aging and experienced employees.
For many Americans putting off handing in their lunch pail, it may be down to simply not having enough money to retire. Nearly half of employment extenders say they’re working longer to maintain their current lifestyle, to deal with inflation and cost of living concerns and to have a safety net in retirement — despite also claiming they’re working longer because they want to — according to Voya's report.
And they may be reluctant to lose vital job benefits, like health insurance and their 401(k) plans, once they stop working.
According to data from the Federal Reserve Board, only 31% of non-retirees feel confident about their retirement savings.
Tuman says companies need to provide more support and education in order to help their older workers eventually retire. This could include offering 401(k) plans, catch-up contributions and access to financial advisers, as well as estimating income needs to get employees a more holistic picture of their retirement plan.
Working with a financial adviser is often a smart move, and it can be better to get started sooner rather than later.
Tuman says it’s also important to promote vehicles like emergency savings accounts and health care spending plans, as well as insurance and student debt programs. She’s seen some companies offer student debt management programs, or even pay off part of their employee’s loans.
Workers should also take advantage of any health and wellness benefits that are being provided, and ask for flexible working arrangements if needed.
“I think, generally speaking, older workers are in a power position because they do have the expertise to fulfill the roles and there's no sort of training required,” Tuman said.
“So I think there's a lot that they can ask their future employer.”
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