That’s the trend in the United States, where fewer births and longer lives are resulting in lots of tense conversation about retirement savings. Will we make it? Some experts say it’s time to push back the retirement age. Indeed, more people are continuing to work into their seventies, or even to return after retiring, despite the prevalence of ageism.
Rethinking Age in the Workplace
Much of the current conversation at the National Association of Plan Advisors (NAPA) is revolving around the implications of longer lifespans, and recently, Mauro Guillen, of the Wharton School, underscored some of the trends that point to the urgent need for new strategies:
53% of retirees in the United States go back to work either part-time or full-time….Guillén emphasized that it’s not just a money management issue—it’s retirees wanting to feel useful and busy.
“In the United States, the average number of children born to college-educated women is exactly one, whereas those who dropout of high school average three and a half children,” Guillén explained, highlighting recent generational trends for a joint career-oriented household. The conversation then shifted to the aging population, a phenomenon leading to more grandparents than grandchildren in the U.S. According to Guillén, this demographic shift will have significant implications for social security systems and the labor market. “We used to have five people of working age for every retiree, and now we’re down to almost three,” he noted, forecasting more dramatic declines over the next two decades.
Longer, healthier lives are indeed inspiring some business owners and professionals to keep going through their sixties and into their seventies, giving retirement a new meaning. For those who enjoy the purpose and connectivity of their work, retirement may focus on flexibility, working less, or concentrating on favorite projects—but is no longer centered merely on the concept of “not working.” Of course not everyone who opts to stay employed can afford to make that decision purely based on achieving happiness: many employment extenders are “working longer because they need the finances to cover expenses….” Whether or not working into older years is a choice or necessity, experts, including Guillen, underscore that change in upon us:
“We are living longer and staying healthier, which means the traditional model of retirement needs to be adjusted….” Guillén suggested recalibrating retirement ages to allow people to work longer, alleviating some financial pressures on pension systems….
“We must recalibrate our societal structures to embrace the longevity revolution,” Guillén asserted. “The future belongs to those who can integrate the wisdom of age with the dynamism of youth. Let’s redefine the meaning of a productive life.”
Indeed, as employers strategize for the future, making room for older workers looks like a major key to success: data from the Bureau of Labor Statistics predicts:, “one-third of individuals ages 65 to 74 expect to be working in 2030 and the greatest growth in our labor force will come from workers aged 75 and over.” Among the related hurdles to overcome? Persistent ageism in the workplace: “Research shows that about two in three adults ages 50-plus in the labor force (64%) think older workers face age discrimination in the workplace today.”
Tailored Benefits
Given the trends, sponsors of employee retirement plans find themselves busy tailoring and communicating options for older workers, including the provision of relevant financial education and opportunities to make catch-up contributions. While working on benefit package designs that attract and retain a diversity of employees, plan sponsors are also taking precautions for their own security, given the heightened scrutiny, regulation and litigation facing retirement plans. Protection is essential, and at Colonial, a whole year of Fiduciary Liability Insurance for plan sponsors costs less than a few dollars a day.
To further shield the business and retirement plan, Cyber Liability Insurance is included at no extra cost. Armed with Colonial’s liability insurance package, if you face claims of alleged or actual breaches of duty in connection with the employee retirement plan, you’ll be protected with defense costs and penalty limits up to $1,000,000.
Colonial offers a simple and affordable way to protect yourself and your business: just upgrade your ERISA bond to include Fiduciary and Cyber Liability insurance. You can even choose a 1, 2, or 3-year package.If you already have an ERISA bond package with Colonial, you can even lock in your rates by upgrading to the 2 or 3 year package.
Protect yourself, your business and your plan for the go forward:
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