Delayed retirement good for the mind and probably the economy
Posted June 27
NEW YORK CITY — Workers who long for an early retirement may want to ponder this before they decide whether to stay on the job or go: Following retirement, life satisfaction initially increases — for a short time. After about a year, it starts to droop.
In fact, if they could do it over, on average workers would wait another 1.8 years to retire, said Axel Börsch-Supan of the Munich (Germany) Center for the Economics of Aging at the Max Planck Institute for Social Law and Social Policy.
That's just one of the points that make decisions about retirement complicated, according to experts who discussed inequalities in retirement and work life recently during the 2017 Age Boom Academy for journalists held at Columbia University.
As employers and workers ponder their retirement plans and what would alter them, they have to consider the fact that people are healthier and living longer, so retirement can stretch over decades, though social policies surrounding retirement are largely unchanged and employers do not always make adjustments as worker demographics shift.
"The world has changed. The biology of people has changed," said Börsch-Supan, who noted that employers would do well to adapt.
The decision to work longer or retire usually belongs to the employee. What's decided may not take into account the pluses and minuses of an individual's continued employment for both worker and employer. Employers have to consider the reality that fewer young people are entering the workforce.
“I have sat in so many meetings where the issue of retaining the (older) workforce is simply not on the radar screen,” said Kathleen Christensen, director of the Alfred P. Sloan Foundation’s Working Longer program. Employers are much more likely to be working on the “gradual exits” of older workers than on keeping them or adding more, she said.
But some employers — from universities to clothiers to automakers — see the benefits of retaining and recruiting older workers and embrace them as a vibrant part of their work crew.
Who's leaving early?
Bosses sometimes wish that older workers would retire because they tend to earn higher wages than recent hires. Some also have a common misperception that older people cost the company because they make mistakes. While older people do make more errors, Börsch-Supan said, the severity goes down. The bigger, more costly mistakes are usually made by inexperienced workers.
Nor is it true that productivity dives when one is older. "If you get an interesting job, productivity goes up," he said.
That's one reason employment experts and those who study aging issues both tell employers to find ways to provide variety and stimulation for their valuable older workforce. They often also recommend some accommodation for personal issues like physical ability and a desire by older workers to work fewer hours and transition into retirement.
Lower-paid workers retire earlier than those with higher pay, even though Social Security payments reward those who work longer, said Gary Burtless, senior fellow in economic studies at the Brookings Institution. There are several reasons for their earlier exit from the job force, including poorer health, that they are more likely to be laid off than those who make more money and the misperception that making less money means it won't matter that claiming benefits earlier reduces them.
People don't all love their jobs, either, which likely impacts how they feel about leaving the workforce earlier or staying in, said Ruth Finkelstein, associate director of the Robert N. Butler Columbia Aging Center, which runs the academy. "Survey research suggests a lot of people have jobs they don't like. They are eager to stop doing them as soon as they're able to stop doing them."
It goes back, she said, to how tasks on the job are accomplished and to employer practices. While improving those might not make each job "fascinating," opportunities for training, as well as health and safety protection "might make it less odious," she added.
Among people who most likely want to retire as soon as possible are those who feel they don't have much control over their jobs, that they just do what they're told. If employees are rarely rewarded or praised for efforts, they are apt to want out earlier, too.
Bad health and bad working conditions also strongly predict older workers will choose to retire, said Susann Rohwedder, associate director of the RAND Center for the Study of Aging.
Tension can also exist between younger workers and older ones.
“I am concerned we not pit generations against each other," said Boston University's Ernest Gonzales, who suggested social justice and intergenerational cohesion as guiding principles for dealing with workplace issues for older workers, including questions of ageism.
Changes that help
Finkelstein has a list of "age-smart practices and policies" for employers to keep skilled older workers in their jobs. Those include the ability to advance within the company and improve skills through education and professional development.
Workers need and want a positive, healthy environment. She called flexibility "the essence" of aging well at work and noted that cross-training so workers can do each other's jobs ensures work is not disrupted when someone wants more flexible hours or needs personal time for health or caregiving. Her list also includes the ability to restructure jobs if needed and the option to transition into retirement in phases.
Crafting a work life that fits one's needs as one ages is often not as easy as simply taking advantage of policies and options available somewhere in a company, she added.
"I am often struck by the extent to which each individual is on their own to ingratiate themselves to their employer in order to be among the privileged who have access to the policies and practices that are theoretically available but not tangibly available to everybody," said Finkelstein.
Employers can make small workplace changes that make a big difference for workers, especially older ones, said Ursula M. Staudinger, psychology professor and one of Finkelstein's colleagues at the center. She said allowing workers a short period each workday — say 20 minutes — for targeted physical therapy to counterbalance physical exertion pays off and doesn't ding productivity.
"The workability of a person at age 60 is not in the genes of that person. The workability of a person at age 60 is a highly malleable thing," she said. "It is a result of what this person was exposed to," voluntarily or not, in previous decades.
"Let's relax a bit in the sense that we have these longer lives. How do I plan my energy? How do I distribute my motivation? Let's plan mindful breaks and get into a conversation with the (human resource) manager and bring it to the table and say, this is what I'm suggesting."
Besides more flexible hours, older workers also want more professional development. The extent of that desire is something Jürgen Deller, professor of business development at Leuphana University of Lüneburg, Germany, said surprised him. Even 80-year-olds said they wanted to keep learning on the job.
An aging workforce is not an inconsequential consideration. By 2020, one-fourth of American workers will be 55 and older, according to the The National Institute for Occupational Safety and Health.
Some companies adapt well to changing needs of their experienced older workers and create a culture where they continue to thrive to the benefit of themselves and their employers.
Automaker BMW is often cited as an example of basic retooling that pays big dividends in productivity and retained employees. Deller said the company spent a small amount — less than $60,000 — on physical changes that made a huge difference to older workers, such as replacing a concrete floor with a wood one on an assembly line. The company started what has become an ongoing process a decade ago.
An article in Harvard Business Review provides more detail about the changes Deller referenced. Managers at a BMW plant in Bavaria altered a particular assembly line that wags at the plant called the "pensioner's line" because of the older employees who worked it. Employees were encouraged to contribute ideas, then they got to vote on the ones they thought would make the most difference and management implemented the winning changes. Besides the wood flooring, they got ergonomic chairs and tabletops adjustable to their heights, among other things.
Productivity increased 7 percent and the so-called pensioner's line performed as well as those with younger workers. Absenteeism fell from 7 percent to just 2 percent —better than among the younger workers. So the company implemented the changes to other lines and to its plants in the United States and elsewhere.
Columbia University each year recognizes businesses that value older workers. In 2015, the Brooks Brothers tie factory in Long Island City won an Age Smart Employer Award. In announcing it, Columbia wrote that besides making more than 1.5 million ties a year, the factory tailors clothing for the clothier's stores. Because tailoring requires years of experience, older workers are valued and people 50 and older make up more than half of the 228 full-time workers.
The company recruits older workers and welcomes diversity. It restructures tasks as workers age, so an older employee might be taken off the assembly line and given custom work. Brooks Brothers also engineers work space to create a healthy work environment for older workers and young alike.
In addition, it cross-trains, allows schedule flexibility, and retired workers can come back and make money during the company's busy times if they want, among other age-friendly practices.
Universities also tend to be age-friendly places, said Steven Reiner, 68, an associate professor at Stony Brook University and a former "60 Minutes" producer. He said he became a teacher because it is a career he can remain in "as long as I'm healthy and interested — a profession where one could be my age and still flourish."
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