A report by the Employee Benefit Research Institute in Washington, D.C., makes the case that older workers are continuing to work full-time for two primary reasons:
- Healthcare benefits
- Retirement savings
The EBRI report finds that the percent of workers over 55 in the labor force has increased from 29% in 1993 to 38% in 2006. For workers in the 65-69 age bracket, only 18% were working in 1985 while 29% are today.
"These trends mark a significant change in behavior for individuals in these age groups, and are likely driven by their need to obtain affordable employment-based health insurance and the need to accumulate savings in employment-based defined-contribution retirement plans," writes the reports author, Craig Copeland.
So much for an engaged work force that finds challenges and rewards in their daily work assignments.
We are now hiring defensive workers, workers who fear for their current and future economic security and are working only because of that.
This is the dysfunctionality of today's workplace and employers ought to be concerned about it.
Making businesses more flexible has been touted over the past 25 years as a way of allowing it to respond to changing economic conditions.
But this simply means that jobs are less dependable, workers are hired and laid off according to economic fluctuations. Because it takes five years to vest in a private pension, it makes it more difficult for individuals to plan for their retirements.
EBRI reports that private pension plans covered 34% of the U.S. work force in 1985 while savings plans such as IRA and 401(k) plan covered 25.2%.
By 2005, those numbers were dramatically different. Private pensions covered just 15.1% of the workers while IRA and 401(k) plans covered 46.3%.
Immediately, we can see that retirement planning puts a heavier burden on individual workers and it's not a big leap to assume that some people will just not handle this well. That is one reason some people are working later in life today.
Meanwhile, is there any more guaranteed way to lose your life savings than to not have healthcare coverage and suffer a catastrophic disease?
Older workers understand the risks and it's revealed in this study as one of the main reasons they continue working. As much as they want to retire, some people can't get adequate healthcare coverage except through their jobs so they continue working.
This doesn't make a lot of sense for employees or employers. Isn't there a way to fix this?
