Modern retirement plans are not what they used to be. Gone are the days when most could expect to retire completely at the age of 65. In the past 20 years, the number of workers aged 65 and over has increased by over 4 per cent. That number is only likely to increase further.
More than two-thirds of baby boomers plan to keep working past the age of 65 and some do not plan on retiring at all.
Benefits of Working Longer:
- Working for a few extra years with a larger retirement-plan contribution can have a powerful impact on retirement goals.
- There is an opportunity to grow the nest egg.
- There may be opportunity to have flexibility in work schedule and tasks through phased retirement.
Phased Retirement
Phased retirement allows full-time employees to work part-time schedules while beginning to draw retirement benefits. The upside to this is that many boomers do not necessarily want to work a 40-hour workweek.
- Depending on the amount of hours worked, boomers may still be able to hold onto any health insurance and retirement-plan perks. Even some part time work can reduce the need to tap into your nest egg too soon.
- There may be a few downsides to phased retirement as the trend is gaining momentum a lot faster than some employers can keep up with. Many employers may not be so quick to jump on the bandwagon and employment practices have not been able to keep pace with the changing times.
- There are some legal obstacles when switching from full-time to part-time work. Employers may have a hard time accounting for insurance and pensions for part-time workers. Some industries are more open to this arrangement, as is the case with health care and mining. Phased retirement might give the employers time to speed up their recruiting process while still benefiting from the talents of boomers.
Intergenerational Conflicts
Staying in the workplace longer can also come with a few hiccups:
- Although it may seem trivial, dress code is an area of conflict. Millennials tend to advocate for casual dress as boomers insist on business attire. Dress code speaks to workplace culture – businesses that insist on formal dress will lose young talent to the companies that do not.
- Communication styles vary between generations. The technology divide is only getting wider and younger people have moved on from email to newer social applications. Issues tend to be most apparent when millennials supervise workers 20 years their senior. Some companies have found a way to remedy this by creating reverse mentoring initiatives. Boomers can get help with technology and communications from their younger coworkers.
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