Aging Workforce Issues Transition into Retirement
Aging workforce issues impact the employee’s transition into the retirement years. In America, the aging workforce plans to stay on the job past the traditional retirement age. By 2024, 25% of the aging workforce in the U.S. will be over the age of 55, and a third of those will be over age 65. Some in the aging workforce category plan to keep working since they don’t have adequate savings to retire, while others are daunted by rising healthcare costs. By some estimates, the average retired couple in America will need $285,000 annually to pay for medical expenses in retirement, excluding long-term care.
The rising cost of retirement isn’t just impacting the aging workforce. It’s also hitting employers: the aging workforce issues are costing companies up to $50,000 a year, including the difference between an older worker’s salary and hiring a younger one, according to a Prudential Financial report cited by BenefitsPro.
The aging workforce issues and challenges provide an incentive for employers to care for older employees and keep them in good health to provide them with a smooth and timely transition into retirement. BenefitsPro offered up three ways for employers to meet that challenge:
- Engage the aging workforce in staying healthy: Employers who actively engage in helping their aging workforce to stay healthy have a better opportunity to create scalable and positive outcomes. The aging workforce had a higher chance of health complications; however, preventive services and screenings that catch conditions and diseases early can help. The key is to motivate and engage the aging workforce to keep them focused on preserving their health. “Building a culture of wellness in the workplace promoting healthy food options, increased physical activity, opportunities for socializing and connection, and appropriate life balance — can help to reduce the number of health issues and related absences, which could force them to dip into retirement savings,” BenefitsPro observed.
- Educate employees about healthcare costs: The aging workforce needs financial education to help them prepare for retirement. In addition, it’s important to help foster a culture of wellness for employees of all ages, not just the aging workforce. The aging workforce can expect their healthcare expenses and out of pocket costs to rise as they age. Employers should have candid conversations with the aging workforce about their healthcare plans leading up to and in retirement. Do they have family and friends who can support them if they develop a health condition? If not, do they fully understand their financial responsibilities? Medicare and Social Security are two other points of confusion for the aging workforce; employers can play an integral role in educating older workers on how these benefits work and helping them navigate the sign-up process.
- Help an aging workforce understand their mental health risks: Research has shown that the aging workforce finds a sense of purpose in their work. However, many in the aging workforce don’t understand the potential for increases in anxiety and depression once they’ve retired. According to BenefitsPro, “it’s important to help them understand what they are ‘retiring into,’ rather than just what they are ‘retiring from,’ and the real benefits of retirement — one of which is time. Staying active in the community, such as volunteering in schools or at a local charity is one way to stay involved and motivated.” Consider having open conversations with the aging workforce about the risks of depression in retirement. Educate the aging workforce concerning community resources available to new retirees.
The thought of retiring can be daunting based upon the aging workforce issues. However, by providing the right tools, in the way of education and resources, employers can help the aging workforce make a smooth and timely transition into a long, active, healthy retirement.