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What Could Help Americans Work More Years

Employers, the government and workers have key roles to play

By Richard Eisenberg

Millions of American workers in their 50s and 60s want, or need, to keep working past the traditional retirement age of 65 — either part-time or full-time. But after attending Columbia University’s 2017 Age Boom Academy program for journalists, Exploring Inequities in Health, Work and Retirement, I’ve learned how difficult (if not impossible) that can be for many of them.

But I also learned from the international Age Boom Academy experts that there are a few things employers, the U.S. government and older workers could do to make staying employed for additional years of our longer lives a more likely reality. The time is right: By 2020, one in four American workers will be over 55.

The adaptations will take some doing, though. “Institutions have not yet caught up with the demographic transitions in society,” said Kathleen Christensen, director of the Alfred P. Sloan Foundation’s Working Longer program. “Employers are more focused on gradual exits of their workers than retaining or recruiting older people in the workforce.”

But just imagine the payoffs if the nation made it easier for people who are physically and mentally able to continue working to do so.

The potential dividends?

For those staying in the workforce: better health (cognitive and physical) and finances, more social engagement and higher life satisfaction  Early retirement appears to have a significant negative impact on the cognitive ability of people in their early 60s,” wrote Age Boom Academy speakers Susann Rohwedder, associate director of the RAND Center for the Study of Aging and Robert J. Willis, a University of Michigan economics professor, in a 2010 academic article. And “complete retirement leads to a 23 percent to 29 percent increase in difficulties associated with mobility and daily activities,” according to a paper by Ursula Staudinger, founding director of the Robert N. Butler Columbia Aging Center; Age Boom Academy director Ruth Finkelstein and other researchers.

The financial payoff — from additional years of salary and, ideally, retirement plan contributions — is obvious, if sometimes overlooked. “We too often frame the conversation about finding purpose in later life, rather than economic survival,” said Finkelstein, who is associate director of the Robert N. Butler Columbia Aging Center.

Working longer, said Axel Börsch-Supan of the Munich Center for the Economics of Aging, also may make you happier. He cited research showing that people who retired early wish they’d retired 1.8 years later, on average. “People regret retiring too early,” he noted.

For employers: more workers with critical job skills and expertise  Extra years in the workforce provides increased knowledge and problem-solving history. And contrary to popular wisdom that productivity inevitably declines as workers age, Börsch-Supan said productivity increases with age for workers whose jobs are “complicated intellectually.”

For the U.S. government: more income taxes, Social Security and Medicare payroll taxes and a stronger economy  The longer people continue working, the more they provide tax revenues and the more they're likely to spend.

“We have longer lives, so let’s use them,” said Staudinger, a Columbia professor of sociomedical sciences and psychology.

What follows are a few things that would help Americans work longer and delay full-stop retirement, if they want and can, based on research and insights dispensed at Age Boom Academy. In coming weeks, you’ll see more about work, health and retirement from my Next Avenue colleagues Emily Gurnon, Kerry Hannon and Chris Farrell, who also attended the program.

What Employers Could Do

Let workers retire gradually. “People want to phase into retirement and stay with their companies but maybe downshift their responsibilities or cut their hours,” said Christensen. Specifically, 55 percent of employees 55 and older want to retire gradually, according to Transamerica’s Aegon Center for Longevity and Retirement. “The reality,” said Christensen, “is there aren’t that many opportunities to do so.”

Only 5 percent of U.S. companies offered a formal phased retirement program, according to the 2016 Society for Human Resource Management survey.  Phased retirement is one of the 10 “age smart policies and practices” on Finkelstein’s list of them. “Flexibility” is another.

Make jobs less routine and more interesting for older workers. “Small changes in repetitive jobs can make a big effect in the cognitive health of older workers,” said Staudinger.

“It’s very important for employers to keep motivation up by giving workers interesting jobs. That makes you more productive as you age,” said Börsch-Supan. “Productivity declines for people with routine jobs, like opening letters.” Let the robots do those tasks; increasingly, they can. In Germany’s auto and insurance industries, Börsch-Supan said, employers intentionally retool their workers to keep them current and enthusiastic.

Hire and retain older workers because of what they know. “When Y2K happened, we [employers] hired people 50 and 55. They had the right competencies” to fix the software problem, said Jurgen Deller, a professor of business psychology at the Institute of Management and Organization. “All of a sudden, they were not too old. If the supply of competencies is limited, companies start to rethink their business models.”

Employers may increase their appreciation of older workers for demographic reasons, with a coming dearth of young workers and plethora of those in their 50s, 60s and beyond. “If fewer young people are entering the workforce, there may be increased demand for older workers’ skills, said Gary Burtless, an economist at the Brookings Institution. “There may not be enough younger workers to get the job done.”

Make workspaces more amenable to older workers, especially blue-collar ones. BMW famously spent just $50,000 to overhaul one of its assembly lines in 2007 and make it more older-worker friendly (adding chairs, enlarging computer screen typefaces, that sort of thing). Productivity rose 7 percent and absenteeism dropped from 7 percent to 2 percent.

“Health and safety protections might make work less odious,” said Finkelstein. Staudinger cited a study where workers in physically strenuous settings were given 20 minutes of daily physical therapy exercises, which resulted in reduced sick days. “The benefit was way more than the investment,” she added.


Begin an end to the time-honored seniority pay structure. Granted, it would be highly controversial not to pay people more for each year they work at an employer. But it may be time to consider this switch, as has been happening in Japan. Perhaps the way to start would be on a pro-rata basis, with older employees who move from full-time to part-time work at their firms or nonprofits.

This change in thinking about pay could help prevent managers from getting rid of otherwise valuable full-time workers in their 50s and 60s merely because they cost more than those in their 20s, 30s and 40s.

What the U.S. Government Could Do

Change the Medicare rules for people working after 65. Under current law, if an employer has 20 or more employees, its group health plan generally pays health benefits for workers 65 and older first and Medicare kicks in for coverage after that. That’s a strong disincentive for employers to retain or hire workers 65 or older. “I’m an expensive employee,” said Willis, 76, noting that the University of Michigan pays for his health insurance.

As Farrell wrote on Next Avenue, Stanford University economist John Shoven says mandating Medicare as the primary payer for people over 65 would encourage them to keep working and “cost the government approximately nothing.”

Pass age discrimination legislation to prevent employers from getting off the hook so easily. As Age Boom participant and ProPublica reporter Peter Gosselin has written zealously lately, a 2009 Supreme Court ruling (Gross v. FBL Financial Services) has made it near impossible to win an age-discrimination case. The Gross decision said an employee who thinks he was a victim of age discrimination must show he wouldn’t have suffered it “but for” his age.

“Age discrimination remains widespread and difficult to challenge, 50 years after the Age Discrimination in Employment Act,” said Ruth Milkman, a sociology professor at the City University of New York.

At Age Boom Academy, Boston University School of Social Work professor Ernest Gonzales called for Congress to pass the bipartisan Protecting Older Workers Against Discrimination Act. It would restore the pre-2009 legal standards for age discrimination claims. “Discrimination has gone from overt to covert,” said Gonzales. “It’s more nebulous to put your finger on what age discrimination is.”

Gonzales and his colleagues have created a Workforce Age Discrimination Scale which determined that age discrimination is significantly related to an increased desire to retire among older workers.

What Older Workers Could Do

Think more entrepreneurial. This doesn’t necessarily mean leaving your employer to start a business, although that could be worth considering. It’s more about reassessing what Staudinger calls your “competency profile” and finding the job that best matches it.

She told the Age Boom audience: “As an employee, you need to start thinking about ‘What are my talents and skills and how do they fare in the current labor market?' You need to make yourself an entrepreneur of your own work ability.” After that, she added, employers “may stop worrying about your hair color and your wrinkles.”

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Photograph of Richard Eisenberg
Richard Eisenberg is the former Senior Web Editor of the Money & Security and Work & Purpose channels of Next Avenue and former Managing Editor for the site. He is the author of "How to Avoid a Mid-Life Financial Crisis" and has been a personal finance editor at Money, Yahoo, Good Housekeeping, and CBS MoneyWatch. Read More
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