Recognizing that they will quite likely work into their 70s, Gen Z employees are looking for ways to build breaks (aka micro-retirement) into their careers. Meanwhile, Baby Boomers are returning to work. Both approaches reflect the realities of longer, more expensive life spans, as well as the desire to spend time purposefully.
Balancing Acts
Guy Thornton of Practice Aptitude Tests observes that because Gen Z strongly believes in work-life balance, the idea of taking time out between jobs, instead of waiting until older age to pursue personal interests, makes a lot of sense: “Whether it’s time off to travel, to have a well-deserved break from working or to take up other passions, the micro-retirement trend is the latest buzz in the world of corporate work….Younger people prioritize mental health, personal fulfillment and meaningful experiences over a singular focus on career longevity and progression.” Then too, because technology can put job searches, training, or even part-time work at their fingertips, members of Gen Z are not quite as threatened by the prospect of “starting over” after a break from the work world, as past generations.
Meanwhile, at the other end of the age spectrum, un-retiring, as Shanna Milford, at IRIS Software Group points out: “For the 13% of retirees planning to re-enter the workforce in 2025, financial pressures like rising living costs (69%) and non-medical debt (34%) are key drivers. Beyond financial stability, returning to work offers retirees social benefits, a renewed sense of purpose and opportunities to slow down without throwing in the towel.” Indeed, for those able to achieve a sense of agency and connection through their jobs, a retirement defined by “not working” is no longer the paramount objective. For example, a recent “Retirement Happiness Study,” by Mass Mutual found that the new meaning of retirement is “either (1) changing focus to ‘a new type of work or fulfilling purpose’ or (2) working less.”
Shifts toward hybrid work, and preferences for remote work, have helped some workers create improved work-life balance, which reduces the urgency associated with traditional approaches to retirement, and explains why the Bureau of Labor Statistics reports: “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.” Of course not everyone who opts to continue working can afford to make that decision purely based on achieving happiness. For example, among pre-retirees, Voya has identified these three groups of employment extenders:
- Want to Work: The most important reason for the “want to work” group to work longer is that it gives them a sense of purpose.
- Working Longer by Design: Their most important reason for working is that they want to be more financially stable for a better quality of life in retirement compared to just needing it. Retiring later has always been part of the plan.
- Need to Work and Worriers: These two groups are working longer because they need the finances to cover expenses now or in retirement—in fact 92% of individuals in these two groups indicate this need as a reason. The main difference between these two groups is that “worriers” have the resources, tools and opportunity to get prepared to retire, after working longer, while “need to work” employment extenders have an uphill road ahead of them.
Survey data also reminds us that plenty of workers are bringing financial concerns to the job, especially in the face of longer life spans and economic instability. Mass Mutual has found that 34% of pre-retirees are concerned they will outlive their savings, while other researchers see a “boom to bust” trend, as post-pandemic credit card debt hits many Baby Boomers hard.
The Importance of Retirement Plans
Pointing out that employer sponsored retirement plans are more critical for workers than ever, retirement industry leaders are advising employers that older workers especially need financial education, tailored benefit options, and opportunities to make catch-up contributions. Of course it’s also wise for plan sponsors to secure their own futures. Indeed, plans are under heightened scrutiny, and ERISA litigation has continued to rise. Protection is essential, and at Colonial Surety Company, 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 Surety offers a simple and affordable way to obtain this protection for 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, lock in your rates by upgrading to the 2 or 3 year complete package.
Protect yourself, your business and your plan for the go forward:
ERISA Bond+Fiduciary+Cyber Liability HERE
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