Longevity Planning Needed for Aging Workforce
Longevity Planning for an aging workforce has become the new retirement planning for an aging workforce. Retirement plan advisors and plan sponsors spend a lot of time coaching both young and experienced employees on the topics of ‘how to save’ and ‘how to prepare’ for post-work years. What only a microcosm of companies has focused-on-to-date is Longevity Planning for an aging workforce. Longevity Planning for an aging workforce does not limit the planning process to just saving an appropriate amount or making certain retirees do not outlive their money. Longevity Planning is about making sure retirees have the necessities to maintain a good quality of life during a period many describe as the golden years.
InvestmentNews recently highlighted importance of Longevity Planning for the entire workforce. Plan sponsors should consider the benefits of partnering with a financial advisor who is talking to older employees about longevity planning. Question your retirement plan advisor on, how they are handling specific topics around aging workforce longevity planning issues? Longevity Planning should include transportation, communications, housing, aging in place and career management.
InvestmentNews pointed out, the senior population in the U.S. is rapidly growing by the day – with one American turning 73 every seven seconds. In addition, worldwide, seniors will control an increasing share of global assets. To put numbers around that, according to Joseph Coughlin, founder, and director of the Massachusetts Institute of Technology AgeLab, people over age 60 worldwide will control about 30% of global spending, or $8 trillion, by 2020, as quoted in the InvestmentNews article.
Obviously, the landscape, and the conversation around retirement planning — and what comes after one’s primary career years have passed — is changing. And it is changing quickly. While economics and technology certainly play a role in helping today’s aging workforce, a lot of the solutions are going to come down to an individual’s personal needs. The needs of the aging workforce are changing.
People are on a trajectory of living longer than ever. Individuals born today have a life expectancy close to 80 years (average life expectancy in the U.S.) So the American worker’s expectations around life during retirement are quite different than they were even a generation ago. Many individuals are choosing to remain in the workforce longer because they feel good about contributing to something larger than themselves. The aging employees can feel fulfilled by the work they are producing. Aging workforce Longevity Planning incorporates a sense of purpose that comes with contributing to an organization. While for some organizations it may be challenging to maintain an aging workforce on the job, but it does not have to be. Learning how to work with an aging workforce through proper Longevity Planning it is a reality that employers should consider adjusting to as more workers are choosing to delay retirement.
In addition, aging workplace longevity planning should incorporate a “second act,” where seasoned professionals contemplate how they will be spending time after their current career draws to a close. Today’s aging workforce is looking forward to longer, healthier retirements than they have seen their parents enjoy. Many choose to pursue hobbies, travel the world, spend more time with family, get an education, etc. In today’s longevity-laden connected-world, the possibilities are endless. The conversation around retirement, and around Longevity Planning is changing!
In light of these evolving trends, Mr. Coughlin offers four different topics for engaging in deeper, more significant conversations with the aging workforce as outlined in the InvestmentNews article:
1) Managing Ambiguity (i.e., do clients plan to go back to school, volunteer or start a business?);
2) Managing Big Decisions (i.e., should clients downsize or stay in their current home, quit their job or move?); 3) Managing Complexity (i.e., managing multiple medications, caring for partners); and
4) Managing End-of-Life Decisions.
Looking toward the future, if a plan sponsor has not engaged in conversation with their retirement plan advisor concerning Longevity Planning, then now is time to do so! (Or, consider a Retirement Plan Advisor who can). It behooves all involved to analyze the impact of maintaining an aging workforce beyond normal retirement age. The retirement planning needs of the aging workforce are changing, and Longevity Planning is now important to every employer and every employee. Prepare to adjust accordingly.