Baby Boomers Are Not Retiring And The Impact on Small Business
Baby Boomers are delaying retirement and continuing to stay in the workforce. This trend in postponed retirement can have substantial impact on other generations within the workforce seeking advancement and career changes. According to the ADP Workforce Vitality Report released in June 2017, "[the boomer] age group experienced 4.8 percent job growth during the first quarter of 2017, more than any other age group.” Additionally, the Pew Research Foundation found that “nearly two-thirds of workers older than 65 hold full-time jobs” of 35 hours a week or more. While there are many reasons for the delay in retirement, four primary catalyst include:
Finances – Baby Boomers are concerned that they do not have enough cash to last for their entire retired years. Shifts in employer pension programs to self-funded or corporate match 401k retirement programs means that less money is guaranteed or available in retirement years. Plus, the more years worked, the fewer years need to be pulled in taking retirement dollars out of an account. Retirement accounts can continue to grow (yes, money must start being taken out by age 70 ½ ) but waiting longer can increase those payouts. Additionally, delays in retirement can also mean a delay in collecting Social Security. Waiting to take Social Security from age 62 to age 70 can mean an additional growth of 8 percent annually. In a recent Employee Benefit Research Institute study found that “26 percent of workers plan to work until age 70, and another 6 percent say they will never be able to retire.” With less and less workers able to save for retirement or have not nearly enough to carry them through their retirement years, they continue to work full time and extend their careers well into their 70s.
Healthcare – Staying on the company health plan can mean better health plans as well as other ancillary benefits like group and voluntary life and disability insurance and even access to critical illness, accident, hospital or whole life plans, not to mention the ongoing employer contributions to a 401k. Studies have also found that continuing to work has health benefits, too. Researchers at Oregon State University found that in an ongoing study of individuals age 50 and older, those who continued to work had an 11 percent lower chance of death from all causes than their ‘retired’ counterparts.
Demand – Employers need the experience and institutional knowledge of the baby boomer generation. Much of this knowledge has not been passed down to younger generations, leaving a large gap in training and experience that employers are willing to pay to keep.
Lifestyle – The average life expectancy has increased substantially allowing baby boomers a healthier life and more productive time to continue working. Older employees who once targeted 55, 60 or 65 as a retirement age are now looking to 70 or 75. Employers wanting to keep those experienced workers on hand are offering more creative ways to stay engaged at the organizations while providing flexibility and even reduced work weeks.
How can you keep your baby boomers engaged? Think about developing a talent retention program. Like Millennials who have certain expectations from their employers, baby boomers may need a few tweaks to their employment terms to stay happy and focused. Flexibility is the biggest request. Consider providing a flexible work schedule or even offering full-time 30+ employment benefits so baby boomers can ease into a slightly shorter work week while still providing experience, leadership and a great work ethic to the organization.
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