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More Employees Working Beyond 65
Published Wednesday, February 21, 2018

While generations now have grown up believing that age 65 is some be-all, end-all goal where work ends and retirement begins, more boomers are rejecting that notion. Not only are they living longer, healthier lives, they are choosing—whether out of necessity or desire—to stay in the workplace and continue their careers.

Moreover, employers experiencing a talent drought in a tight labor market want them to do just that. While there are still companies that look askance at an older person’s resume, others are creating programs and accommodations to keep them in place longer.

According to Todd Fahey, state director of AARP NH, only about 10 percent of people plan to retire at 65 and never work again. Further, AARP research shows that about 82 percent of people are staying in the workforce because they need extra income. “And that’s not a bad thing,” he’s quick to add.

Older Workforce Growing
Whether it’s to extend the life of retirement savings, staving off boredom or other factors, there’s no mistaking there has been an significant increase in the number of older workers during the past 20 years in NH, says Bruce DeMay, director of the Economic and Labor Market Information Bureau at NH Employment Security.

According to labor and census statistics, since 1994, the workforce participation rate for those aged 55 to 64 has gone from just over 60 percent to about 75 percent in NH. For those aged 65 to 74, their numbers jumped from 20 percent to 35 percent in the same time period, while those aged 75 and older went from 6 percent participating in the workforce to just over 10 percent.

In fact, the state had the third highest workforce participation rate in the country for people aged 65 and older in 2016. That trend began quickening in the past decade. DeMay points out that in 2004, workers aged 65 and older were the smallest segment of the NH workforce at 3.4 percent, even though the population in that age range was large. However, by 2016 that number nearly doubled to 6.3 percent, surpassing the three youngest age groups—14-18, 19-21 and 22-34—in their shares of the workforce.

Further, DeMay says, between 2010 and 2015, the largest increase among all of the five-year age brackets was in the 65 to 69 age group, which added almost 20,000 people to the workforce. And people aged 65 to 74 in the labor force are almost as likely to be working full time as they are to be voluntarily working part time. As for where they are working, DeMay says retail trade, health care and educational services account for 45 percent of workers age 65 and older.

Economic Realities
These might-have-been retirees are typically healthy enough, both mentally and physically, to continue their careers and they want to contribute, Fahey says. That good health is leading to longer life expectancies—81.2 years for women and 76.3 for men—which for some means trying to find ways to finance those extra years of retirement, says Andrew Eschtruth, associate director for external relations at the Center for Retirement Research at Boston College.

“So if you were retiring in 1960,” Eschtruth explains, ”you were looking, on average, at 13 years of retirement. This is now up to about 20 years today, mostly because of the increased life expectancy.

People have obviously been starting to work a little bit longer, so that would have the effect of narrowing that span of retirement. But the growing life expectancy, which of course is a very good news story, is growing faster.”

Based on research about the way people save and plan for retirement, Eschtruth is concerned. “If people continue to retire in the early to mid-60s, most of them will not have enough for their whole retirement,” he says.

There are several benefits to working longer including more time to save, delaying the need to draw on Social Security and reducing the ratio of work years to retirement years. Working longer means higher monthly benefits for every year a person delays taking retirement, he says. If you retire at 62 you are getting 75 percent of Social Security’s benchmark amount, but Eschtruth says, if you retire at age 70, you are getting 130 percent of Social Security benchmark amount.

“So your monthly benefit is going up roughly 75 percent and potentially even higher based on your work history and your earnings during those years,” he says. “So it’s a huge boost in your monthly Social Security benefit, and that’s of course guaranteed income for life, and it does have an inflation adjustment so it’s a very valuable kind of income to have.”

Delaying retirement gives people more time for their personal savings and assets to grow. A 401(k), for example, would nearly double over this period, both because you are putting more money into the account and you have more time for that money to compound and grow, he says, resulting in a big boost to financial assets.

Finally, you’re increasing your ratio of working years to retirement years from two working years for every retirement year to four working years to every retirement year, so you have a much shorter span to finance than if you retired earlier, he adds.

Recruiting Older Workers
Companies across the country and especially in NH are having trouble finding skilled workers to fill open positions. In fact, according to a 2015 AARP study, 40 percent of U.S. employers report difficulty finding candidates for jobs. But Trawinski argues that if employers considered hiring or even recruiting older people, they would be getting experienced workers who also are statistically more engaged than their younger counterparts.

“When you think about it, they work 40 years at 2,000 hours per year,” Fahey says. “Do the math. That’s an incredible amount of experience of going to work and experience of being an employee.

But they also have judgment and skill sets and a wisdom to show people.”

Hiring and retaining older workers also helps to diversify the workplace and can lead to some interesting programs that can benefit a company as a whole, such as cross generational mentoring programs, says Lori Trawinski, director of the Financial Security Team for the AARP Public Policy Institute.

Many companies realize they are facing an aging workforce and they may be losing incredible knowledge and talent in the coming years, she says. It’s important for companies to think of ways to facilitate that knowledge transfer, and mentoring programs can do that.

“We are also seeing an increase in reverse mentoring programs where younger people will share tips on using technology with the older people, and it really works out well,” she says.

Another way to integrate older workers is involving them in apprenticeship and “returnship” programs. The latter, which is a variation on an internship, is a way to help train anyone who has taken a leave from the workforce, including older workers.

And, Fahey says, employers should look for creative ways to best use the expertise and talent. “Decide who your players are, what positions they can play and what they can do,” he says. “Maybe they can’t play a full game, maybe only half a game, maybe that’s all you need. Or maybe you just need someone to come in and be a mentor or a coach.”

For example, Fahey says there may be an older worker who can no longer work in the trades but is an expert in how to do the job. “That person can surely pass that information down,” Fahey says. “And that’s incredibly valuable to a company that wants to train the next generation of workers.”

Clearing Roadblocks
In order to create that dynamic workforce, Fahey says employers, and even the older workers, need to recognize their own biases and get past them, as age discrimination is a hurdle to getting an older generation into the workplace.

Trawinski says one way to do this is for employers to include older workers in their inclusion and diversity policies. She says in her travels, she’s found few companies that actually do this.

Employers also may need to be more mindful of what image they are portraying in their recruitment materials. “This can be something as simple as looking at your recruiting website and seeing what kind of photo you display,” she says. “If you’re showing people in their early 20s and you don’t show anyone over 50, it’s not quite as welcoming, and you’re less likely to get other applicants.”

Trawinski also says it’s a good idea to create a company culture that is aware of age and generational differences, citing communication preferences as an example. “So for instance, just something designed to get people thinking that, ‘well it could be that someone older than myself would prefer that I call them rather than texting,’” she says. “So talking about the way we communicate, the way we prefer to be communicated with. It sounds simple, but if you take the time to address it throughout your organization you probably will end up with a better functioning team.”

Another potential roadblock is the misconception that older workers cost more because of health care costs. “When you really dig into the data,” Trawinski says, “you’ll see that the most expensive employees are people of childbearing years. And in the instance of premature birth, those are the instances that are far higher in the health care system.”

Another misconception is that hiring an older worker will take a spot of a younger worker. “That’s a totally incorrect statement,” Eschtruth says, “but you can see why people think that. Because everyone can point to an example of a company they know, a small business they know, where they can’t just go out and create jobs, they have kind of a consistent demand for their services. So they do have say, five slots.”

But, he argues, that only applies to very small companies. “We’ve looked at this every which way from an economy standpoint, and it’s a win-win,” Eschtruth says. “The more older workers you have and the more money older workers earn, the better it is for the younger workers. It gives the whole economy a boost. So there’s no trade-off of, ‘well, I don’t want to hire too many older workers because then I can’t get the younger workers in.’ It’s just not correct.”

To do any of this, there’s one thing that retirees and prospective employers need to wrap their minds around. “The moral of the story is, they are healthier, they want to work longer and they want to keep contributing,” says Fahey. “The second moral to the story is that 65 is the wrong number…. The fact of the matter is people are living well beyond that age… so the whole thing is tied to the wrong number, and in doing so, we’re not giving the people who are over 65 the opportunities they might need.”

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