Half of all baby boomers intend to keep working past age 65
That's one of the findings of a new report, issued by Deloitte, which urges employers to get ready for a whole new way of looking at retirement. While it can be argued that many seasoned workers will keep working beyond the typical retirement age of 65 out of economic necessity, it's also notable that many want to remain active in the economy—and the lines between worklife and retirement are blurring.
The study, written by Karen Bowman, Tim Geddes, Jason Flynn, Jeff Sumberg, all with Deloitte, reports that 48% percent of baby boomers (currently between the ages of 49 and 66) expect to keep working past age 65, and 13% believe they will work into their 70s.
This is both good and bad news, the authors suggest. The good news is that a continued availability of skilled workers will help narrow the growing talent gap and stem a potential brain drain. The bad news is that having increased numbers of seasoned workers may mean greater payroll and benefits costs.
Wealth and health are two of the four key reasons why baby boomers will be sticking around for a while:
Lower-than-expected wealth. "Many workers on the verge of retirement are not yet wealthy enough to fulfill their retirement dreams," Bowman and her co-authors reason.
Better-than-expected health. Thanks to advances in healthcare, many older workers still have a lot of value to contribute—and the vigor to do it."
Shifts in government policy. "Changes in healthcare policy will presumably make it easier for mature workers to leave or to accept part-time or contractor positions that don’t include full benefits. On the other hand, proposed increases in the qualifying age for public pension schemes around the world could lead workers to stick around longer."
Continued demand for key skills. "Organizations are struggling to find and retain the critical skills required to achieve their strategic objectives," the Deloitte team writes. "In many cases, the jobs that are hardest to fill have the biggest impact on performance and require the most experience. This talent gap creates new opportunities for workers near retirement age to extend their careers."
Not mentioned in the report is another key driver that is creating opportunities: the rise of the freelance and information economies. The online economy enables individuals to either work virtually or launch new business ventures, with employers, clients and customers oblivious to the age factor. Any age discrimination that may have existed within organizations gets effectively washed out in digital work environments. Plus, for previous generations, retirement meant release from manual, back-breaking work—today's information workers can keep right on going.
Bowman and her co-authors recommend that employers take a hard look at their retirement benefits plans, and redesign them to allow for "multi-dimensional" retirement offerings--which includes the possibility that employees will prefer to stay with the organization on a part-time basis. One approach would be to include a "mentoring" stipulation with such part-time work. For example, the U.S. federal government now allows for continuing part-time employment of seasoned workers, with the condition that one-fifth of their time be spent mentoring younger employees.
Again, the Deloitte report emphasizes support for non-retiring seasoned employees under the more rigid standard employment structure. Another approach that is emerging with the information economy is the rise of contracting and freelance work—another avenue of opportunity for professionals of all ages—not to mention employers of all ages.
(Thumbnail photo: ZDNet.)
— By Joe McKendrick on November 29, 2013, 2:22 PM PST
Seems like you've bought into the myth that most people even get to retire. It's a relatively new phenomenon for the middle class. And even during the heyday of pensions and like defined retirement plans, only roughly 1/4th of Americans had access to them.
Today, it seems like people talk of "retirement" as it's an entitlement. I'm always befuddled when I hear otherwise healthy people think that they can retire at 65 and expect to live another 15-to-20 years on less than a million dollars of savings. And it's also shocking that many of them think they can retire while still being in debt. Previous generations retired in paid-for houses. That's not the expectation today. Consumer Reports estimates that out-of-pocket health costs for retirees on Medicare will still be between $150,000 and 250,000 over the first 10 years of retirement. Most boomers have no where near that much in savings.
And then there's the plight of those who think they actually have saved enough to retire. The cheap money policy of the fed combined with the "Quantitative Easing" printing of billions of dollars a month not only steals the value of savers and retirees savings, but threatens to steal what is left of that value through inflation at some point in the future.
I get the feeling there will be a lot of us working a lot longer than we expected. I find those TV ads for financial firms showing happy retirees giving it all up to live out their years owning a vineyard or horse farm a cruel joke.
The only real reason people want to still work, is that millions have had their projected pensions decimated by global financial turmoil recently, or pension difficulties by people raiding their pensions in Government windfall money grabs, or the simple uncomfortable truth about pensions fundamentally not being able to pay for anything more than a meagre life after work, due to pension annuities also being decimated by the benefits of a longer anticipated life .
...however the baby boomers with their final salary pensions or government funded schemes are pension rich, compared to Generation X who are to follow in a couple of decades, and many will be nigh on destitute with what they will get of closed fiunal salary schemes, defined contribution schemes or average lifetime salary schemes.
@neil.postlethwaite Exactly. And, as a boomer myself, I feel sorry for the younger generations. It is hard enough to find a job that pays a decent salary, even harder for those who are just entering the workforce now; how much harder will it be if younger employees have to compete with old, seasoned veterans who are holding onto their positions for dear life?
BTW, I am not one of those boomers who intend to work until I die of old age. After 47 years in the workforce, I have had enough.