Targeted Benefits Help Baby Boomers Stay at Work, Prepare to Retire

Flex Arrangements Help

To keep valued older workers on board, some employers allow them to change positions, for example by stepping down from a managerial role into an individual contributor role, and shift to part-time or part-year employment opportunities. Others offer phased retirement programs.

"Employers are offering part-time work or the opportunity to come back as a contractor for older employees they want to keep," said Jeanne Thompson, head of workplace solutions thought leadership at Fidelity Investments in Boston. "If [older workers] want to continue to work, they may be offered the opportunity to do so for three days a week from home or with a reduced, 30-hours-per-week schedule."

Hoeck suggested, "Employers can also modify working conditions to conform to preferences of older employees by looking at things like ergonomic workspaces."

When to Hold, When to Fold

However, helping other aging workers prepare for the next phase in their lives may be about "helping them see that maybe it's time" to retire, Thompson said.

Sean Nehlsen, Cleveland-based regional managing director of HR consulting services with OneDigital, pointed out that "older workers have a wealth of knowledge and experience and often will outwork younger colleagues. But when they reach the point where they're working only to make a paycheck or to keep their benefits, they can lose that drive and productivity at work. Employers need to be aware of that and to provide tools, resources and advice to help them retire."

That's often not what employers are doing, however. Some 66 percent of retirees said their most recent employers did nothing to help with their transition to retirement, and another 16 percent were not sure how their employers helped, according to a 2018 survey of more than 2,000 retirees conducted by nonprofit Transamerica Center for Retirement Studies (TCRS).

[SHRM members-only toolkit: Designing and Managing Flexible Benefits (Cafeteria) Plans]

Savings Checkups

Employees won't retire if they're uncertain they can afford to do so, and their fears are significant.

A new study from American Century Investments of 1,500 full-time workers found that among their concerns about retiring, workers are most worried about outliving their money.

"Despite the all-too-real challenge of saving, many workers are overlooking opportunities that could help improve their long-term financial situation," said Catherine Collinson, CEO and president of TCRS in Los Angeles. "Small steps, such as using a retirement calculator to estimate savings needs, engaging in financial planning, creating a budget, formulating a retirement strategy and learning about retirement investing can make a big difference in the long run."

If employees are staying in the workforce longer, "it's often because they don't have enough retirement savings," Nehlsen said. He has seen many employees, as their reach their 50s and 60s, "with outstanding 401(k) loans, and their account balances are minimal. They're putting in 2 percent or 3 percent of their paycheck," whereas many retirement advisors recommend a career-long contribution rate of at least 15 percent of pay, which includes the employer's contribution, to save enough for a secure retirement.

Thompson said, "We're starting to see more employers offer retirement income planning, often by holding workshops and one-on-one sessions," to help employees determine if they've saved enough, when they should claim Social Security and how to set up a plan for drawing down assets to create retirement income. (This topic is addressed in the next installment of this series, "Helping Employees Turn Retirement Plan Savings into Lifetime Income.")

Many of the firms that provide services to 401(k) plans offer this aid, along with online calculators and other tools to gauge retirement savings and develop account withdrawal strategies, Nehlsen said. "Even at small to midsize companies, these benefits are available to employees, but often older workers don't know about them and so aren't taking advantage of them."

A Last Chance to Transfer Knowledge

Workers who retire may later find they're bored and want to go back to work. "They're not looking to get back into their previous roles and work 40 hours, 9 to 5," Nehlsen said. "They're asking, 'Is there a project I can help with or a couple weeks' work here and there?' just to stay involved."

Returning on a limited basis is also a chance to let older workers pass along their knowledge and experience, Nehlsen said. "If you can get them back into the office for five to 10 hours a week, just having that knowledge in the workplace can be critical."

PART 3: Lifetime Income Prospects