An Anti-Retirement Advocate

Posted Wednesday, August 20th, 2014| Comments (2) rule
The following is reprinted with permission from Squared Away Blog.
Kimberly Blanton
Writer
Boston College Center for Retirement Research

Email: kimberly.blanton@bc.edu

At 89 years old, retirement is one of the few things that has not made it onto Robert E. Levinson’s vita.
book cover
Levinson almost single-handedly seems to be trying to start an anti-retirement movement. He feels so strongly that he once wrote a book titled, “The Anti-Retirement Book.”

“I just feel very strongly that one should never retire, or if they’re forced to retire they should try to find something productive to do,” he said.

Though not wealthy, Levinson is one of the lucky Americans. The long-time businessman and fund-raiser for a Florida college is college educated and said he is comfortable financially. But when he looks around his luxury senior community in Delray Beach, he sees pain and regret. Many residents seem idle. For example, a retired physician sits in the lobby waiting for people to drop by and consult him on their ailments.

“If you made a survey of all these guys who are retired, you would find that probably 75 percent would say to you , ‘I retired too soon,’ ” Levinson says.

On Tuesday, Squared Away profiled two older Americans who, after retiring, were pulled back into the work world by their desire to re-engage. But Levinson has simply blown past the traditional retirement age range chosen by most Americans—the 60s—and just keeps working.

He doesn’t really need the money he earns in a late-life career built on his varied interests. He’s just always been driven to work hard, and that did not change simply because he got older.

After college and a stint in the U.S. Navy in the mid-1940s, he and his brother ran an Ohio manufacturing company they eventually sold to American Standard. While continuing to work as a group vice president for the corporation, he bought one hotel in Pompano Beach—later, he built two more in southern Florida. He lost the hotels due to financing difficulties, he said. For the past 25 years, he’s been working as a development officer at Lynn University in Boca Raton. He’ll leave that job next spring.

That won’t slow him down. He plans to work more with his son at a consulting company he founded back in 1969, in addition to writing books, which have included “Full Circle, A Love Story,” about his relationship with Zelda Luxenberg, and the forthcoming “Management Savvy.”

Words of wisdom from a man who will turn 90 in March: Retirement “ain’t what it’s cracked up to be.”

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Moving from Ideas to Action: Growing Interest in Encore Careers

Posted Wednesday, August 6th, 2014| Comments (8) rule

Jim Emerman

Executive Vice President, Encore.org
Guest Blogger, Sloan Center on Aging & Work, Boston College

Email: jemerman@encore.org

There is growing evidence to show that people are warm to the idea of encore careers—post-midlife work or pro bono service to meet community needs. Yet despite that interest, people aren’t easily moving from thinking to doing. What will it take to move more people from ideas into action? That’s the urgent question that surfaced in Encore.org’s 2014 national survey, which asked people 50 to 70 years old about their post-midlife plans, aspirations and concerns.

Interest in encore careers rose by 17% from 2011 to 2014, according to national surveys conducted by Encore.org and Penn Schoen Berland. These gains are coupled with demonstrably less concern about encore income and threats to personal flexibility, both identified as major obstacles in 2011—and relatively minor concerns three years later.

Nevertheless, the view that post-midlife is a time to use one’s personal skills and experience to help others is still held by twice as many people (55%) as are ready to take action to make an encore the defining feature of their own next stage (28%). Society needs the contributions of that other half. What will it take to better convert this belief into action?

Lowering perceived barriers to encore careers is one important step and it looks like there’s been some progress on this front in the last three years.

For example, fewer people with a high level of encore interest say that the economy would make it hard to move into encore work. That could make sense. After all, the job market has been strengthening, albeit slowly. As the economy continues to gain strength, we might hope that the options for people to move into work that speaks to their need for purpose and social impact will also improve.

Further evidence: In 2011, 30% of those interested in an encore career had significant concerns that a next act focused on social impact wouldn’t provide the income they needed. This concern was among the top barriers just three years ago. In 2014, it dropped to one of the least significant obstacles.

In 2011, fear that moving into an encore career would mean a loss of flexibility in taking care of other important needs, like family care-giving, was quite high. Three years later the percentage of those most interested in an encore career and who were quite concerned about this dropped by two-thirds. It’s possible that this relates to the diminishing concerns around income since people may believe that they can now afford to have jobs that allow them the flexibility they need. It’s also possible that there is a growing perception of greater workplace flexibility, perhaps especially in the nonprofit sector.

Fear of age discrimination remains a significant concern, although it dropped too. The continuing concern wasn’t a surprise. At Encore.org, we sometimes feel inundated with horror stories of older people shunned in their job searches. They are no doubt true and the stats about people over 50 who have been out of work the longest remain depressingly high.

The lesson here is that we need to combat age discrimination more vigorously by raising awareness of the value experienced workers bring. More broadly, we need to make the case that people in encore careers need to be part of the human talent mix in any organization tackling big challenges where experience is an asset.

What about the obstacles that socio-economic concerns pose for those interested in encore careers?

I was pleasantly surprised to see that perceived barriers dropped across all income levels.
Still, there is greater concern among the lowest earners than among those in higher income brackets. And some issues pose greater challenges to those with lower educational levels. Those with only some college expressed more concern than those who had completed college about their own confidence in trying something new, the need to learn new technologies, their health, age discrimination and the state of the economy.

Clearly, investing in those who haven’t yet completed college needs to be a priority for the encore movement. The growth of programs addressing the 50+ population in community colleges is a positive sign, but there is much more that can be done in this arena. There’s a role for four-year colleges and universities here, too, as they bring encore-type programs to their continuing education offerings. Completing college is often a step in social mobility that can happen at any age.

Perhaps the biggest lesson is that work allowing people to use their talents and decades of experience to improve their communities cannot be limited to any single socio-economic stratum. The desire to make a difference spans the gamut from those with low income and few assets to those with more resources.

With some of the most significant concerns that have held people back from pursing their encores appear to be lessening, we need to do everything we can to make sure that the opportunities are there for those who want them. It’s a human resource our society cannot afford to waste. Please comment. We welcome your thoughts.

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How Social Security Reforms Could Affect Employers

Posted Wednesday, July 23rd, 2014| Comment (1) rule

Philip Moeller
Contributing Writer, Money
Author, book on Social Security, under contract with Simon & Schuster
Speaker, on retirement and successful aging
Journalist and Editor, American History of Business Journalism
Research Fellow, Sloan Center on Aging & Work, Boston College

Social Security payroll taxes are a major expense for employers and employees alike. Each party now must pay 7.65 percent on the first $117,000 of covered wage earnings, with that amount split between Social Security (6.2 percent) and Medicare (1.45 percent, with the proceeds going to the Medicare trust fund that pays for hospital expenses under Part A of the program).

These taxes are nearly universal in private workplaces and, increasingly, in government jobs as well. It’s easy to see them as an immutable cost of business, which over time becomes a forgotten fixed cost. The same is true for employees, especially younger ones.

But in an aging nation, the importance of retirement in general and Social Security in particular will only grow. And if employers looked at the program with fresh eyes, they might be able to fashion better benefit programs and strengthen relationships with their employees in the process. Here’s a quick primer on Social Security and a look at the impact of changing payroll taxes.

Social Security reform has been just around the corner for years. The last major reforms in the program were enacted in 1983 by the Greenspan commission, headed by economist Alan Greenspan, who would later chair the Federal Reserve Board for nearly 20 years. Creating an authoritative commission was necessary because even 30 years ago, Congress could not muster the consensus to make changes in the program. Today, of course, Congress has trouble mustering a consensus that today is even today.

But cracks in the program’s finances have been evident for a long time. Changes billed as ensuring solvency for 75 years, it turns out, will endure for fewer than 50. The program did build up big surpluses but they are now being spent down, with benefits exceeding revenues at an accelerating pace.

The overall fund for OASDI (Old Age Security and Disability Insurance) is split into separate OAS and DI funds. The latter is in especially bad shape and will run out of money in about two years.

Congress could authorize that more money be siphoned into the DI fund from the much larger OAS fund. This has happened once before, and allowed Congress to defer broader reforms. Doing so again is possible but the time for fixing broader issues without causing major problems with people’s retirement plans has run out.

Common wisdom, while perhaps an oxymoron inside the Washington beltway, holds that people aged about 55 and older should be spared from any major negative changes in Social Security. They are close enough to retirement that they do not have enough time in their careers to adjust to any Social Security cuts.

With OASDI projected to be unable to pay all its scheduled benefits in only 15-16 years, the need for a 10-year lead time means that the program’s cushion will get much, much smaller before reforms begin to reduce annual deficits.

The menu of possible reforms includes extending the retirement age, reducing annual cost of living adjustments, means-testing benefits for high earners and other benefits tweaks. But there is no way to come close to balancing Social Security without changing payroll taxes.

While it’s called a payroll tax, Social Security taxes are not regarded the same way as income or sales taxes. Generally, people feel like their payroll taxes are a fair price to pay for their future Social Security benefits. Last year, the National Academy of Social Insurance found that people were willing to pay more in payroll taxes to preserve the program.

“Eighty-two percent of those surveyed agreed that it is critical to preserve Social Security for future generations even if it means increasing Social Security taxes paid by working Americans,” says Elisa A. Walker, a NASI policy analyst. “Responses were remarkably constant across political parties, age, income, and race/ethnicity. For example, those who agreed it is critical to preserve Social Security for future generations even if it means increasing Social Security taxes for working Americans include 74 percent of Republicans, 88 percent of Democrats, and 83 percent of independents.”

There are two major ways to boost payroll taxes: 1) raise the wage ceiling on which taxes are owed, and, 2) raise the percentage rate of the payroll tax. The impact of both were laid out in a recent report from the Congressional Budget Office.

Historically, 90 percent of wages were captured by payroll taxes. In recent years, wages have stagnated for the middle class but continued rising for higher earners. Today, as a result, only about 83 percent of wage income falls at or beneath the ceiling, which is $117,000 this year and rises each year by the rate of consumer price inflation.

Raising the ceiling back to 90 percent would be a logical first step toward boosting program revenues. If this were done (and it would need to be phased in over years), the wage ceiling would more than double, the CBO said. If the change were made all at once, the ceiling in 2015 would be $241,600. People earning between the current and new ceilings would get a boost in their eventual Social Security benefits in exchange for their higher taxes. But it would be a very modest boost. Social Security has a very progressive benefit formula that credits a high percentage of lower-earners’ wages but a very small percentage of high-end wages.

This increase would, by itself, close 30 percent of the program’s projected financial shortfall during the 75-year window from 2014 to 2089 (program solvency projections are based on a 75-year time span). Some people would like to load even more of the financial burden on wealthier earners.

Eliminating the ceiling and making all wages subject to the payroll tax would close 45 percent of the projected shortfall, the CBO estimated. And if higher Social Security benefits for high earners were limited more than under current law, it would be possible to eliminate nearly two-thirds of the system’s financial problems solely on the backs of the wealthy. For many reasons, I oppose this.

Increasing the OASDI part of the payroll tax to 7.2 percent from 6.2 percent (for both employee and employer shares) would close 60 percent of Social Security’s 75-year financial shortfall, the CBO projected. So if this were done and the annual tax ceiling were increased to capture 90 percent of wage earnings, 90 percent of the shortfall would be addressed.

Of course, solving Social Security’s problems is much easier on paper than in reality. Conservatives tend to oppose any tax increases and often seem especially against higher taxes for the wealthy. Liberals recently have rallied to the notion that Social Security reform must include higher revenues that would fund more benefits for lower-income earners.

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Encore Entrepreneurs to the Rescue

Posted Wednesday, July 9th, 2014| Comments (5) rule
Solopreneurship and the End of “Retirement”

Jackie B. Peterson

Author of Better, Smarter, Richer | Business
Coach/Mentor for Solo, Creative, and Encore Entrepreneurs

Portland, Oregon Area | Professional Training & Coaching
Email: jackieb@jackiebpeterson.com

I think we can all agree: the later years of life—those decades formerly known as “retirement”—are changing rapidly… and radically. The Baby Boom gifted 21st-century America with a graying population: there are 78 million Baby Boomers, the first of whom turned 65 in 2011. Today, we’re turning 65 at a rate of about 10,000 a day, and 65+-year-olds make up about 13% of the U.S. Population.

Meanwhile, traditional pensions are dwindling and Social Security is in trouble. The recession and painfully slow recovery mean that retirement savings are in short supply, while many near-retirees have also lost home equity or a job. And because the population is growing older so quickly, programs for the elderly are expected to consume an ever-larger percentage of federal dollars (the projected statistics for 2015 put federal spending for the elderly at nearly half the federal budget).

Pretty bleak, huh?

But then there’s the upside! Americans are living longer, healthier lives than ever before. My friend Bill Zinke of the Center for Productive Longevity calls it the “longevity bonus”: “The gift of the 20th century to the 21st,” he says, “was 30 extra years of life!” Quality of life is important to us, and we’re learning more and more about how to get healthy, stay healthy, and make our later years better than ever.

So where does that leave us? A huge chunk of the population is approaching (or surpassing) “retirement age,” but retirement—in the traditional sense—seems out of reach … and the economic situation means that we really can’t afford to have people just sitting around. But even though all people want is JOBS, a staggering 78.5% of businesses never hire employees. These businesses are one-person ventures. Meanwhile, however, even if there were jobs, getting one would be another thing entirely: rampant ageism in the workforce has left a disproportionately high percentage of workers aged 50 and older unemployed for the long-term, draining their savings and forced to rely on government services.

Oh, and don’t forget! We have three extra decades of health to enjoy our retirement … or lack thereof.

It seems like a frustrating bundle of insolvable puzzles and Catch 22s, doesn’t it?

The good new is that it doesn’t have to be. Introducing one of the most interesting trends in the business world: encore entrepreneurship.

Encore entrepreneur
noun

  1. Someone who is 50+ and excited about their “next act”
  2. Part of the fastest-growing segment of the American workforce

The U.S. Small Business Administration has a whole campaign directed specifically at encores, and for good reason: among working Baby Boomers, more than five million run their own businesses or are otherwise self-employed.

Encore entrepreneurship solves a number of problems in one fell swoop: staying productive is a great way to stay healthy, and running a business (especially if it centers around something you love doing) is a great way to stay productive for those of us who can’t afford to spend our entire “next act” volunteering or pursuing a hobby. Furthermore, encore entrepreneurs can keep working without having to get all worked up about the JOBS issue … and that “keep working” bit is just what our economy needs right now (not to mention our wallets!)

In short, the encore trend is paving the way for an increasingly vibrant economy full of healthy people (and saving the government money on social services and elder care costs!)

Welcome to the Age of the Solopreneur.

Solopreneurs are entrepreneurs who work alone. They might be writers, coaches, consultants, or artists. They might be massage therapists or CPAs. They are outsourcing the help they need, treating their time as the precious commodity it is, and using their passion and talents to make a living (and a good one—successful solo businesses can make $100,000 or more a year). Whether they call themselves “freelancers,” “home-based businesses,” or “self-employed,” they are predicted to make up 50% of the labor force by the year 2020.

And yet everyone—from the highest-ranked politicians in the federal government to local Small Business Development Centers—is obsessed with the same old questions: Why aren’t there any jobs? How can we get more of them?

You see, I believe we’re measuring the wrong thing: we’re wasting our time talking about JOBS. What we need to be measuring is work. Given the huge percentage of solo ventures out there, we need to figure out how to teach solos to be successful, and stop agonizing about the lack of good old 9-5 JOB-jobs. My decades of working with small businesses have made me realize that traditional business wisdom, which focuses on the “pyramid model” of hiring employees, is simply not applicable to solo ventures. Solos need to BE the business and DO the work they love—not hire other people to do it for them. I’ve developed some tools to help solos on their path to financial success, and I’m convinced it’s possible for everyone.

But what brings this all full circle is that I’m convinced that it’s especially possible for Boomers and seniors. As we’ve already discussed, we’re seeing more and more encore entrepreneurs, and solopreneurship is the easiest way for encores to be in business because of its flexibility. So if the idea of starting a business makes you want to run the other way, hang on a second! The internet and all of the e-tools we have available have made solo businesses scalable; geography no longer matters. You can sell your product or service anywhere, anytime.

In addition, many encores already have the basic requirement, the very first principle for successful solopreneurship: they have a lifetime of learning in one particular area, meaning that they have a focused passion for a deep and narrow niche. Bill Zinke of the Center for Productive Longevity calls it “Double ESP”: Boomers and seniors have Experience, Expertise, Seasoned judgment, and Productivity. Doesn’t that sound like a recipe for a successful business?

Now, I don’t want to paint too rosy a picture: solopreneurship has it’s own unique set of challenges. But that, after all, is why I wrote my book, Better, Smarter, Richer: 7 Business Principles for Encore, Creative, and Solo Entrepreneurs … and started my own solo-encore venture! I would love to hear your entrepreneurial stories and help make your next act better, smarter, and richer—drop me a line or visit me on the web!

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Social Security at 62 but Fairly Healthy

Posted Tuesday, June 24th, 2014| Comment (1) rule
The following is reprinted with permission from Squared Away Blog.
Kimberly Blanton
Writer
Boston College Center for Retirement Research

Email: kimberly.blanton@bc.edu

Are people who claim their Social Security retirement benefits when they’re 62 too sick or impaired to work?

Fast forward three years, to when these early claimers turn 65. They’re about as healthy as those who decided to wait until age 65 to start receiving their Social Security retirement benefits, according to preliminary findings from a study using Medicare spending data as a proxy for health. The early claimers are also far healthier than people who left the labor force early to go on federal disability.

Some 8,500 older Americans were in the study’s sample, and they fell into four different groups: those who claimed a reduced Social Security pension soon after turning 62; those who claimed a larger pension at 65; those who were awarded a Social Security disability benefit before turning 62; and those who applied for disability but were denied and then claimed their retirement benefit after age 62.

The researchers, from the University of Michigan and Johns Hopkins University, examined Medicare claims from 1991 through 2008 for the four groups during the year following their 65th birthdays. They found no evidence of persistent health problems that would have kept the 62-year-olds from continuing to work for a few more years.

Controlling for race, sex, education and other factors that have a bearing on health, the $287 annual difference in Medicare claims between people who started receiving retirement benefits at 62 and at 65 was not significant. Similarly, the healthcare spending of people who received disability benefits and those who were rejected was virtually the same.

But there was a large gap between the group who claimed a retirement benefit at 62 and the group on disability: Medicare claims for disability recipients were $4,400 more annually than the claims for early pensioners.

It’s important to note that this analysis doesn’t capture any differences in healthcare spending that may’ve occurred prior to age 65. That’s the age of Medicare eligibility for everyone in the sample except those who qualified for Medicare sometime prior to turning 62, because they were receiving Social Security disability benefits.

When the researchers repeated the analysis using Medicare claims at age 70, however, the story was the same: poor health seems to play a fairly small role in the decision about when to claim Social Security retirement benefits.

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Full disclosure: The research cited in this post was funded by a grant from the U.S. Social Security Administration (SSA) through the Retirement Research Consortium. The opinions and conclusions expressed are solely those of the blog’s author and do not represent the opinions or policy of SSA or any agency of the federal government.

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Three Steps to Survive a Healthpocalypse

Posted Wednesday, June 11th, 2014| Comments (2) rule
How to take cover when the sky is falling
Scott's photo Kenneth Scott, MPH
Outreach Director
Colorado School of Public Health
Research Fellow
Sloan Center on Aging & Work
James' photo Brian D. Williams, MD
Colorado School of Public Health

Is anyone else feeling overwhelmed? The popular news media is full of apocalyptic scenarios that have the two of us feeling pretty exhausted. Everywhere we look the world seems to be teetering on the edge of a cliff—the economy, the environment, even honeybees. Our areas of expertise—medicine and public health—are no exception. For instance, workers managing one or more chronic diseases will be more and more common as the workforce ages and as a younger, less healthy generation joins the workforce. But instead of adding to the general anxiety by recounting doomsday statistics about the rising costs of medical care or the high rates of obesity and diabetes, we have suggestions that may bring some relief. Here are some practical things that employers can do to promote the health and wellness of their aging workers. These three steps will help keep your organization’s sky from falling.

Step 1: Promote preventive screening tests that have been proven to be a good idea.

The Affordable Care Act of 2009 requires that all private insurance policies pay for (at no additional cost to the patient) a list of recommended services, including certain screening tests and vaccines. Employers can promote the use of these services by simple and inexpensive means such as posters, electronic communication, and worksite wellness meetings. Employers can help older workers (and younger workers) know how their preventive service schedules change as everyone ages at work. When you can, offer and promote tests on site.

Step 2: Commit to chronic disease management programs, either by developing them within the company or hiring a third party to run them.

The quickest way to realize cost savings from worksite wellness activities is by helping employees with existing chronic diseases to keep their conditions in check through disease management programs. A study by the RAND Corporation found that Pepsico experienced a return on investment of $3.80 from its disease management programs, compared to a $0.50 return on its lifestyle management programs that focused on physical activity and diet among all employees, regardless of health status. The majority of the cost savings from Pepsico’s disease management programs came from a 30-percent reduction in hospital admissions. Notably, RAND clearly stated that organizational commitment is important for a program’s success. Simply having a program on the books is not enough to realize financial benefits. Employers and employees need to be engaged in order to maximize program effectiveness and minimize the potential for discrimination. The most common chronic conditions among workers 55 and over are arthritis, hypertension (that is, high blood pressure), heart disease, and diabetes.

Step 3: Introduce universal design solutions that work for everyone.

The total cost attributable to arthritis in the United States was estimated to be $128 billion as of 2003 (the most recent year for which figures are available). Nearly half of the workforce age 55 and over has some form of arthritis. We’ve written about universal design in general terms before, but there is no better example of universal design for arthritis than the OXO Good Grips brand of kitchen tools. Sam Farber invented the first OXO tool when he noticed that his wife (who had mild osteoarthritis) was having difficulty peeling apples for a tart. His designs proved to be immensely popular among people with and without arthritis. This is the essence of universal design–maximizing the number of people who use a product, place, or service with a design that works well for as many people as possible. A company that doesn’t have a human factors engineer or ergonomist on staff can hire one as a consultant to identify workplace barriers and solutions. In the meantime, a company can start with simple steps, like replacing door knobs with door handles. In addition to the physical environment, organizational policies can be universally designed. Workplace flexibility works for older workers with elderly parents, as well as employees who have young children.

While these three steps may not prevent a healthpocalypse, they may ensure that you and your employees are among the last ones standing.

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It’s Time for Some Bold Strokes to Support Older Employees

Posted Wednesday, May 28th, 2014| Comments (3) rule

Philip Moeller
Contributing Writer, Money
Author, book on Social Security, under contract with Simon & Schuster
Speaker, on retirement and successful aging
Journalist and Editor, American History of Business Journalism
Research Fellow, Sloan Center on Aging & Work, Boston College

Research and anecdotal evidence find that workplaces often are not welcoming or friendly to older workers, and may be condescending if not actively hostile to them. Employers may be unwilling, unable or simply clueless about the well-established needs of older employees.

Meanwhile, mounds of research also have solidly established that older employees bring a wealth of experience to their jobs. They can be an organization’s most stable and loyal employees, are very trustworthy, great mentors, enjoy work more than younger cohorts and can be every bit as productive as workers in younger generations. If—and it’s a big one—if they are intelligently managed and supported by employers.

Now, hold this thought for a moment and consider a bit of irrefutable demographic information. The United States is running short of workers. Yes, lots of older Baby Boomers are extending their working lives, leading to alarmist stories that they are taking work from younger jobseekers and stalling efforts to begin and establish career paths. But the bigger picture here is that millions and millions of other Boomers are retiring, and their numbers will not be replaced over time by younger and smaller generations. Short of a large and totally unlikely flood of new immigrants into the U.S., many employers will have increasing trouble finding enough new employees, let alone qualified ones.

The happy solution, of course, would be for employers to close this manpower gap by embracing their older workers, retaining the ones who want to stay and putting out the welcome mat for new employees who are in their 60s and even 70s. They would get a great reception from older people who either want to keep working because they enjoy it, or need to keep working because their retirement portraits look like Dorian Gray.

There is a lot that education could do to produce better matches for older employees and workplaces. Often, reading about employer concerns regarding older workers seems like a story written in a foreign language compared with the narrative about how valuable a resource older employees can be.

Even so, the main spoiler to a happy ending to this story is—simply but profoundly—money. Older employees often represent higher expenses to employers. They may make higher salaries than comparably skilled younger persons. Their healthcare costs are higher. In many work settings, they are more likely to become injured and their rehabilitations are longer and costlier. Older employees may receive less training for skills maintenance and upgrading because they are viewed as sunset workers for whom such spending would be a bad investment.

What to do?

More studies and mindfulness strategies are nice thoughts but do we really need more research here? Experience suggests that employers with sizable older workforces will develop effective ways to handle them. The key is to encourage them to develop such workforces. And the best way to do that is to make it worth their while financially.

The biggest levers that exist to effect large-scale behavioral changes among employers are retirement and healthcare costs. These are big employer expenses.

If there’s any good news here it’s that they also are enormous public expenses. Social Security and Medicare have huge price tags that are only going to rise as Boomers get older. Less visible, perhaps, are the sizable hits to the U.S. Treasury from the breaks for tax-deferred retirement accounts and the tax deductibility of employer healthcare premiums.

Obamacare already has caused big attitudinal changes toward employer healthcare funding and, of equal importance, the notion that employers even are the best places to offer healthcare in the first place. It is not hard to see a future where employees go directly to a public or private healthcare exchange for their insurance.

As this likely evolution occurs, healthcare and retirement benefits are more and more likely to be viewed as coming from the same expense bucket. They will be managed as part of a single expense pool and employee costs will be looked at accordingly. Employers would pay “X” dollars for each employee’s benefits. And they shouldn’t care whether those dollars are spent in retirement security or healthcare. Nor where they are spent.

This is all by means of suggesting that changes could be made in Medicare and Social Security that would save employers enough money on the older members of their work forces to greatly reduce if not eliminate any added costs posed by them.

To name one example, why couldn’t Medicare be redesigned to accommodate older persons who are still working? Employers could shoulder some of these healthcare costs, although far less than they’d pay for a non-Medicare employer. Medicare would save money as well. Employees shouldn’t care whether their premiums go to a private insurer though a marketplace or to a private insurer participating in Medicare.

Further, older employers—and their employers—today continue to pay Social Security payroll taxes even if such taxes will add not a single penny to their eventual Social Security benefits. What about creating a payroll tax reduction or exemption for employees of a certain age? This might cost Uncle Sam some payroll tax dollars but wouldn’t the income tax benefit of keeping an older worker on the job more than make up for that hit?

Removing the reality and perception that older employees are a cost burden would lead to the retention and hiring of more aging Boomers. They would be better off and so, likely, would society.

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The Logics of Change

Posted Wednesday, May 14th, 2014| Comments Off rule

Stephen Sweet, PhD
Associate Professor of Sociology
Ithaca College
Research Fellow
Sloan Center on Aging & Work, Boston College
617.552.9195 | ssweet@ithaca.edu

Many good reasons exist to promote age-responsive workplace policies, but different logics underpin the arguments advanced.

First, consider the logic of economic productivity. This rationale for age-responsive workplaces focuses on the risks of losing talented staff and makes the most of a multigenerational workforce. For example, an all-in or all-out retirement policy can lead some workers to exit their jobs sooner than their employers might desire, and hamper knowledge transfer between generations. Because such a policy can cause recruitment costs to escalate, productivity to fall, and profit to suffer, the option of bridge jobs looks like a better bet by comparison.

Second, the logic of social justice can be applied. This rationale focuses on the issue of inequity and how age or life-stage discriminatory practices create disadvantage. Applying this logic focuses on unfairness in the blunt use of age and parental status as markers of employability. Social injustice can result in the disillusionment and debasement of those who have been treated unfairly. It can also create entitlement for those advantaged by the status quo. The logic of social justice presents equity in workplace policies as an uphill battle of the weak against the strong, and its effectiveness is enhanced by social organization.

Third is the logic of collective interests. This rationale considers the health of society as a whole as the primary concern. Plato discussed this rationale in his treatise The Republic, showing that some types of unfairness or inequity can actually serve to create a more powerful society. For example, in the realm of retirement policy there may be very good reasons to encourage an older generation to exit the workforce in order to make room for the entry of a younger generation. Similarly, collective interests might also be served by policies that promote shorter work weeks and more vacation time as ways to reallocate work and reduce unemployment.

Weighing the arguments

If one is seeking to catalyze discretionary change within organizations, economic productivity is the logic that will have the greatest force. Can age responsiveness improve brand reputation? Will it facilitate recruitment and retention of the best workers? Will it enhance a company’s capacity to serve an age-diverse client or customer base? These are all relevant questions, which in turn beg for some type of cost-benefit analysis. The reality is that sometimes it makes economic sense for employers not to be age-responsive, and when that’s the case, those who fight for reform must fall back on the logics of social justice and collective interests.

The civil rights and gay rights movements reveal the remarkable sway that social justice arguments can have on workplace policy. How the Baby Boom generation will change the terms of employment for older workers is an open question. If its impact on the anti-Vietnam War movement, the sexual revolution, and popular culture are indicators, the effect is likely to be substantial but even so, it is not inevitable. Social justice may align with demands for nondiscretionary labor protections, but political will and political organization are necessary to back those demands up.

Owing to the individualistic orientation of American culture, the logic of collective interests might be more difficult to mobilize into action. However, remember that a shared spirit was a foundation of the commitment to World War II and underpinned many of the policies for returning soldiers (such as the GI Bill). The application of the logic of collective interests to age-responsive workplace policies requires considering not only what is best for older workers but also what is best for workers at all stages of life, as well as for those who are outside of the workforce. Ultimately, this question asks us to think about why age-responsive workplaces are important not only for securing the interests of older workers and their employers but also for the interests of a remarkably diverse society.

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Stephen Sweet, Associate Professor of Sociology at Ithaca College, author of The Work-Family Interface (2014 Sage), and Research Fellow at the Sloan Center on Aging & Work

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Downturns Fuel Bridge Jobs, Retirement

Posted Wednesday, April 30th, 2014| Comments (2) rule
The following is reprinted with permission from Squared Away Blog.
Kimberly Blanton
Writer
Boston College Center for Retirement Research

Email: kimberly.blanton@bc.edu

Older workers may have every intention of deciding when they’ll retire, but economic conditions can undermine their well-laid plans.

A new study investigating whether macroeconomic events “leave workers with less control over their retirement timing” found that various transitions from career jobs into retirement sharply accelerated during periods when more Americans, including more older workers, were losing their jobs.

The researchers analyzed whether periods of rising unemployment over the past 50 years have affected three specific retirement transitions made by older workers: 1) from full-time work to “bridge jobs,” which pay less; 2) from bridge jobs to full retirement; and 3) from full-time work to full retirement.

These transitions were tracked based on changes in individuals’ employment earnings documented in U.S. Social Security Administration data from 1960 through 2010. An individual was considered to have shifted to a bridge job after he experienced at least a 50 percent decline in his earnings with an existing or new employer – the earnings floor on this group was $5,000 per year. When earnings fell below $5,000, the worker was considered fully retired.

The researchers said that they focused on white men between the ages of 55 and 75, because their labor force participation patterns were more stable during the period studied than those of women and minorities.

They found that a 1-percentage-point rise in the U.S. unemployment rate increased the number of men moving each year from full-time work to bridge jobs by 7 percent.

Rising unemployment also pushed more men into full retirement. A 1-percentage-point rise in the unemployment rate increased the number of men who retired – either from full-time work or from a bridge job – by 5 percent each.

When they investigated whether the retirement timing of high-income Americans might be less vulnerable to economic conditions, they found very little difference among various groups on the income ladder.

Even when individuals carefully prepare for their retirement, a downturn can quickly disrupt their plans.

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Full disclosure: The research cited in this post was funded by a grant from the U.S. Social Security Administration (SSA) through the Retirement Research Consortium. The opinions and conclusions expressed are solely those of the blog’s author and do not represent the opinions or policy of SSA or any agency of the federal government.

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The Ultimate Legacy Challenge for Boomers

Posted Wednesday, April 16th, 2014| Comments (4) rule

Lauren Stiller Rikleen
President, Rikleen Institute for Strategic Leadership
Executive-in-Residence, Boston College Center for Work & Family
Email: lauren.s.rikleen@bc.edu
Twitter: @LaurenRikleen
LinkedIn: https://www.linkedin.com/pub/lauren-rikleen/6/a48/a87

Millennials are entering the workplace with a variety of negative stereotypes attached to their generation. “They are entitled.” They don’t want to work hard.” “They are disloyal.” “They require constant praise.” And on it goes.

That narrative—as inaccurate as it may be—makes it easy for Boomers to disengage. Such a choice, however, would be a lost opportunity for all generations in the workplace.

There are many reasons why Boomers should actively participate in the career development of Millennial employees. The following offers five of the more compelling:

  1. Simple demographics should encourage Boomers to focus on the leadership development of Millennials. The intervening generation—the poorly named Gen X—is simply too small to fill the gap that will be left by the giant population of Boomers. Millennials, therefore, will be stepping into leadership roles sooner than predecessor generations were called upon to do so.
  2. Millennials are willing to work hard, but they want to work smart. Their notions of when and where work can be done are vastly different from the face-time culture that Boomers’ nurtured. Boomers often misread the Millennials’ desire to use their prodigious technology skills to make work more efficient as a challenge to Boomer authority and work practices. This reaction inhibits helpful communications about ways to develop a more efficient workplace with more engaged employees.

  3. The “entitlement” narrative has been part of the Millennials’ reputation since they started school—and it may be the biggest misperception of all. Millennials were raised by parents who studied child development experts so their offspring could be confident and secure. But when these children grew up and entered the workplace, that carefully nurtured self-confidence is viewed as entitlement. The questions Millennials were encouraged to ask as kids are now seen as a lack of respect for senior generations at work, and the desire for success that was imbued in them in their youth is interpreted as an unwillingness to “pay dues” as young adults. It is no wonder Millennials are confused when the adults in their lives at work respond so negatively to the self-respect that their Boomer parents helped foster at home. By pushing past this stereotype, Boomers can leverage the Millennials’ natural confidence in ways that promote their development at work.

  4. Millennials want meaningful feedback, not empty praise. They earnestly seek to learn from new assignments, and recognize that an annual review is not an effective career development tool. Boomers who take time to offer feedback as work is performed are cultivating loyal employees—and fostering retention.

  5. At some point, legacy matters. After decades of working hard, Boomers should be thinking about their own legacy. While there may be many accomplishments in which they can take pride, the gaping hole in most workplaces is the failure to adjust the model to the life circumstances of today’s families. Work-life integration and flexibility are not luxuries, they are workplace imperatives. Millennials will complete this undone work if they must, but do they really need to wait until the Boomers relinquish power to do so?

There are more similarities than differences in the characteristics of Boomers and Millennials. As driven, hard-working generations, opportunities abound to combine their collective energies to reform the workplace. It is the work that Boomers should have done years ago. By letting go of their defensive reactions, and seeing Millennials for who they really are, Boomers can add workplace reform to the list of social changes that have been the markers of their lives.

That should be the lasting legacy of the Boomers’ impact on the workplace. After all, they raised the Millennials – now it is time for Boomers to understand them at work and create an environment that nurtures the link between Millennials’ success and organizational sustainability.

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Lauren Stiller Rikleen is the author of the recently released You Raised Us—Now Work With Us: Millennials, Career Success, and Building Strong Workplace Teams. She is the president of the Rikleen Institute for Strategic Leadership and the Executive-in-Residence at the Boston College Center for Work & Family in the Carroll School of Management.

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