Ever since the Social Security program was created back in 1935 we have come to accept 65 as the age we can expect to retire. Many companies followed suit, and 65 was typically viewed as the end of the road for corporate careers and the trigger for pensions, gold watches, and retirement parties.
But today, reaching age 65 does not automatically mean it’s time to retire. The promise of a relaxing and stress-free retirement has been replaced in many cases by the reality that people are not prepared to retire. Some employees cannot afford to retire or are just plain afraid to retire. Age 65 is now just another year in an ongoing career, and retirement has no set time frame.
The reasons people are extending their work life are varied. For some individuals it is not a matter of choice but rather survival. Many Americans do not have sufficient funds to support a retirement life, and therefore must continue to work. Other workers find the interaction and engagement with co-workers to be a major benefit of continuing their job. Many people experience a feeling of worth and self esteem resulting from the important role they play at the company. Finding such recognition outside of the working world may not be that easy.
Staying in the workforce past traditional retirement age will have broad implications for employers, younger workers, and the economy. Here’s a look at how delayed retirement is likely to impact the workplace:
Younger workers may have fewer opportunities. When existing employees stay on the job longer there will be fewer opportunities available for younger workers in search of a career. In an already tight job market this could prove frustrating to younger job candidates who are forced to wait in the wings. In some cases there may be enough space for older and younger workers to work together, and both may benefit from mentoring efforts. But if there is only room for one, employers may be forced to choose between retaining an older worker and hiring a younger one.
Challenges as younger supervisors manage older workers. Not all older workers are comfortable with reporting to someone significantly younger. New bosses tend to come with new ideas and changes that can be met with resistance from the existing staff. It is important that both the older employee and the younger manager work together and learn to communicate effectively if they hope to make this situation a success. Progress will require sensitivity, building trust, and mutual respect.
Corporate culture conflicts. It is not uncommon for companies to have to reinvent themselves due to changes in the competitive landscape or economy. Long-term employees have generally adapted to the existing corporate culture, but how will they fit in if the business needs to go in a different direction? Companies need to be fast on their feet to survive and cannot afford to be slowed down unnecessarily. Older workers set in their ways can make an already difficult situation even more challenging.
In addition, older workers tend to have different motivations in the workforce. While younger employees are driven by money and the ability to rise in the corporate ranks, older workers often want more emotional rewards, such as feeling needed, learning new skills, and contributing to the common good. If you want to get the most out of employees, you need to speak their language and understand what makes them tick.
Additional costs of maintaining older workers. Health care expenses are on the rise, and older employees often cost companies more to provide coverage. But on the flip side, older workers do not have dependents because their families have largely been raised, so that cost is eliminated. But it’s still not cheap to provide for the insurance needs of elderly workers.
Dave Bernard is the author of Are You Just Existing and Calling it a Life?, which offers guidelines to discover your personal passion and live a life of purpose. Not yet retired, Dave has begun his due diligence to plan for a fulfilling retirement. With a focus on the non-financial aspects of retiring, he shares his discoveries and insights on his blog Retirement–Only the Beginning.