The Bureau of Labor Statistics (BLS) estimates that over the next decade, the labor market will continue to age, with the greatest growth coming from workers who are age 55+. Additionally, continued growth is expected in the number of employees working past traditional retirement years (defined as ages 65-74). One-third of those in this age group are expected to be working in 2030, compared with 27% in 2020 and 19% in 2000.
Voya Cares® recently collaborated with Easterseals to produce Employment Extenders: A labor (force) to be reckoned with. The research describes the mindset, motivations, wants and needs of individuals who choose to work past retirement age. The survey results can help you better understand this growing segment of the workforce and how you might support their unique retirement planning needs.
Who Are the Employment Extenders?
The survey notes that overall, the reasons to keep working have increased for many older workers, while the reasons to stop have decreased. For example, the economic impact of inflation and market instability makes this group want to save more before they stop working for good. In addition, they are now experiencing increased flexibility in workplace norms, including greater ability to work from home.
The survey highlights many more different motivations, financial considerations and personal concerns that impact the decision to extend employment beyond the traditional retirement age. To better understand these differences, survey participants were sorted into unique personas:
Want to Work (29%)
This group continues to work because it gives them a sense of purpose, yet they’ve saved the most compared with any other group and may be financially able to retire now.
Part of the Plan (22%)
Those in this segment may always have planned to work longer for an enhanced quality of life in retirement, and they still enjoy working. They also are more likely to have retired once, gone back to work and may already be collecting a pension.
This group is likely working longer because they are afraid they are not ready to cover unexpected expenses. Planning and saving are top of mind concerns for this group, but they don’t necessarily like working.
Need to Work (18%)
This type is working past when they had hoped because they need the money today and when they retire. Even though they don’t necessarily like working, they may continue to work because limited resources make saving difficult.
How Plan Sponsors Can Help
The survey provides a short online quiz that employees can complete to determine if they are an Employment Extender. They can also review recommended next steps to get the support they may need, tailored to each Employment Extender persona. In general, plan sponsors may want to consider these recommended support guidelines:
Provide awareness and education on topics important to Employment Extenders, such as life expectancy and planning for longevity, how Social Security and Medicare work, and community resources available to help access services needed to ensure both their physical and mental wellness.
Make guidance tools available to be used when and where Employment Extenders need them, including personalized decision-support apps emphasizing areas such as transition into retirement, estimating healthcare costs, tax efficiency planning, and maximizing benefits decisions.
Support Employment Extenders who are caregivers by offering opportunities that help them remain in the work force, including remote work and flexible hours, healthcare concierge services, leave management programs, and community-based services available to them and their loved ones.
Offer health and wealth benefits to meet their unique needs, such as Health Savings Accounts for postretirement health needs, emergency savings plans,, managed accounts, and retirement income solutions.
Pensionmark Financial Group, LLC (“Pensionmark”) is an investment adviser registered under the Investment Advisers Act of 1940. Pensionmark is affiliated through common ownership with Pensionmark Securities, LLC (member SIPC).