Some companies prioritize the experience of trusted, aging employees and want to keep many of them on board. Others look at the higher compensation and health care costs associated with older workers and favor helping at least some of them to retire on schedule or earlier.
Either way, companies should factor in that one in three U.S. workers over age 50 wants to phase into retirement, according to Willis Towers Watson’s new 2024 Global Benefits Attitudes Survey. The research revealed that 15% of such employees have already started phasing into retirement by reducing their work hours or job responsibilities, while 19% want to do so.
“Phased retirement can be a win-win for both employees and employers,” said Jonathan Sterbanz, senior director of retirement for WTW. “Working fewer hours even with reduced pay can help employees transition into retirement, both financially and emotionally.”
He added, “Workforce planning remains a critical component to achieving business objectives, and the opportunity cost of inefficient staffing or worker disengagement can have a direct impact on a company’s bottom line.”
At the same time, Sterbanz noted, companies want to hang onto experienced employees and encourage them to pass on their wealth of knowledge to younger colleagues.
Still, only 30% of 1,700 responding employees (all age 50 or older) rated their employer as highly effective at using the skills and knowledge of older workers. A perhaps surprising 67% of those polled said it’s important for them to be a mentor and help train less-experienced co-workers.
The overall findings about the retirement wishes of so many aging employees might also be considered curious, given that millions of older working Americans are delaying plans to retire amid mounting financial concerns.
Indeed, 66% of survey respondents said their said their employer retirement plan is more important to them than ever before. Also, 72% said the plan is the primary way they save for retirement.
Additionally, the share of employees expecting to work past 70 has risen significantly among the over-50s. Just two years ago, 36% of such workers said so, according to WTW. This year, it’s 46%.
Further, the gap between what workers think they should save and what they do save has increased in the past few years. In 2019, the gap was five percentage points (14% ideal savings, 9% actual savings). By this year, the gap has grown to 7 percentage points (17% to 10%).
Overall, about half (52%) of employees think they’re on the right track for retirement. However, women and lower-salaried employees see things differently.
Among those who have already begun phasing into retirement, 61% have reduced their work hours, and 41% have shed some job responsibilities.
Somewhat fewer employees want to change to a different role or job in their industry, or where or how (more or less remote) they work.
