Re­tire­ment, de­ferred: The new real­ity.

More Amer­i­cans than ever are work­ing past 65

The Washington Post Sunday - - BUSINESS - BY JENA MCGREGOR jena.mcgregor@wash­

Life af­ter 65 is start­ing to look a lot more like life at . . . 64. The per­cent­age of Amer­i­cans work­ing past the tra­di­tional re­tire­ment age hit new highs in the most re­cent jobs num­bers, ac­cord­ing to re­cent re­ports, with 19 per­cent of those 65 and older work­ing at least part-time. And it’s only ex­pected to in­crease: The over-65 set is ex­pected to be the fastest-grow­ing de­mo­graphic in the work­place by 2024, ac­cord­ing to the U.S. Bureau of La­bor Sta­tis­tics.

So what are com­pa­nies do­ing to re­spond? A few have re­designed manufacturing plants to adapt. Some lucky em­ploy­ees are get­ting higher 401(k) matches to help them save. More re­cently, many com­pa­nies have launched fi­nan­cial well­ness pro­grams to help em­ploy­ees of all ages make sure they’re bet­ter pre­pared to re­tire on time.

Mean­while, one might as­sume “phased re­tire­ment” pro­grams, which started 15 years ago or so to help em­ploy­ees grad­u­ally step away from their jobs, would be hotter than ever. The pro­grams al­low work­ers to keep work­ing part-time or in al­ter­na­tive ar­range­ments while help­ing com­pa­nies hold on to work­ers with valu­able skills.

But the num­bers don’t show that. Ac­cord­ing to Worl­datWork, a non­profit hu­man re­sources as­so­ci­a­tion, the per­cent­age of com­pa­nies that of­fer the ben­e­fit — 29 per­cent — dipped slightly in 2017, and growth has stalled over the past six years.

The So­ci­ety for Hu­man Re­source Man­age­ment, whose sur­veys in­clude more small and mid­size com­pa­nies, found that the use of for­mal phased re­tire­ment pro­grams is just 6 per­cent — roughly the same as in re­cent years — while in­for­mal use of the idea has ticked up to just 13 per­cent.

“We haven’t seen a flood of large em­ploy­ers say­ing we want to have phased re­tire­ment pro­grams lock, stock and bar­rel,” said Rose­lyn Fein­sod, a se­nior part­ner in Aon He­witt’s re­tire­ment prac­tice. “We just haven’t seen a huge preva­lence.”

How­ever, that doesn’t mean em­ploy­ers are be­ing more stingy about a more grad­ual re­tire­ment. Hu­man re­sources ex­perts say that in­stead, com­pa­nies are of­fer­ing the op­tion to near-re­tirees un­der the broader um­brella of flex­i­ble work ar­range­ments — a de­vel­op­ment that could help older work­ers in some ways, but pos­si­bly hurt if they work for or­ga­ni­za­tions where flex­i­bil­ity isn’t as highly val­ued.

“If there’s any­thing em­ploy­ers want, it's a com­mit­ted em­ployee,” said Jac­que­lyn James, co-direc­tor of the Cen­ter on Aging & Work at Bos­ton Col­lege. “They don’t want a sign they’re one foot in and one out the door.”

Phased re­tire­ment, hu­man re­sources ex­perts say, emerged in the early 2000s as com­pa­nies grew con­cerned about a baby boomer ex­o­dus. The pro­grams saw an uptick in pop­u­lar­ity around the mid­dle of that decade af­ter reg­u­la­tory changes helped ad­dress ques­tions about how tra­di­tional pen­sion ben­e­fits would be paid out, said Lenny San­i­cola, a se­nior prac­tice leader at Worl­datWork, but then the ben­e­fit fell in pop­u­lar­ity dur­ing the Great Re­ces­sion, as so many work­ers felt they could no longer re­tire.

The pre­vail­ing trend is to in­clude the op­tion in the part-time, job-shar­ing and other flex­i­ble ar­range­ments that the em­ployer of­fers to all work­ers. “There’s been a level­ing off” in of­fer­ing a dis­tinct ben­e­fit, San­i­cola said. “I think it’s be­ing done more on an in­for­mal ba­sis.”

One up­side to this trend for older work­ers, James said, is that em­ploy­ees won’t have to be as clear about their plans with their boss. “The phased re­tire­ment [ben­e­fit] has a lot of com­pli­ca­tions to it,” she said. “It means you are sig­nal­ing to the or­ga­ni­za­tion that you’re retiring,” even years out, when more pro­mo­tions or big as­sign­ments could be in store.

An­other is­sue with more for­mal pro­grams, she said, is that they of­ten re­quire em­ploy­ees to set a date when they plan to re­tire — a de­ci­sion that could change over time.

Still, she points out that peo­ple who work for bosses who frown upon flex­i­ble work ar­range­ments more broadly could have a tougher time. “The down­side will be if the or­ga­ni­za­tion has [flex­i­ble] poli­cies on the books but doesn’t re­ally sup­port them,” she said. “If you know the man­ager thinks that’s a whole bunch of ‘gob­bledy­gook’ from HR,” em­ploy­ees might not ask for them. “Su­per­vi­sor sup­port for these pro­grams and poli­cies is es­sen­tial.”

Re­nee McGowan, who leads Mer­cer’s global re­tire­ment sav­ings and fi­nan­cial well­ness busi­ness, said there’s also “ab­so­lutely” a risk that such ap­proaches to flex­i­bil­ity won’t help older work­ers if em­ploy­ers don’t com­mu­ni­cate them well, and they seem more ori­ented to­ward, say, par­ents of young chil­dren. “We’re go­ing to need a far more overt con­ver­sa­tion around em­ploy­ers and em­ploy­ees about their re­tire­ment plans,” she said.

In ad­di­tion to the shift in flex­i­bil­ity pro­grams for older work­ers, McGowan and oth­ers said the recog­ni­tion that peo­ple aren’t fi­nan­cially ready to re­tire has made “fi­nan­cial well-be­ing” pro­grams a pop­u­lar new cor­po­rate ben­e­fit. Em­ploy­ers, she said, are “re­al­iz­ing that ‘I can’t ex­pect my em­ploy­ees will want or be able to re­tire at 65. How do I help [them]?’ That's been a huge im­pe­tus for the fi­nan­cial well­ness pro­grams,” she said.

The ben­e­fit, which can in­clude fi­nan­cial ed­u­ca­tion, ac­tual coach­ing and ad­vice on ev­ery­thing from col­lege sav­ings to when em­ploy­ees can af­ford to re­tire, have grown in pop­u­lar­ity in re­cent years but “have be­come re­ally hot this year,” McGowan said. An Aon He­witt re­port found that al­most 50 per­cent of the em­ploy­ers it sur­veyed were in cre­at­ing a strat­egy to do more to help work­ers with their fi­nan­cial health.

The most so­phis­ti­cated com­pa­nies, McGowan said, are rec­og­niz­ing that this is a chal­lenge that’s here to stay, and try­ing to make the most of it, plan­ning for a fu­ture where the skills and ca­reers of over-65 work­ers are very much part of the work­force.

“There is this large shift from a world where em­ploy­ers re­ally wanted peo­ple to re­tire at 65,” she said, “to one where they re­al­ize that may not be a real­ity, ei­ther on the part of em­ploy­ers or em­ploy­ees.”


Nine­teen per­cent of those 65 and older work at least part-time.

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