Providing Incentives to Delay Retirement Can Benefit Both Employers and Employees
May 29, 2018
Encouraging employees to delay retirement not only improves their financial security in retirement, but also keeps experienced and productive employees on the job. Flexible hours, part-time or consulting-based employment, flexible location, and financial rewards top employees’ list of desired incentives to delay retirement.
While four in 10 current workers expect to work in retirement, current retirees are not showing a desire to work for pay. Only 17 percent of retirees are still working for pay, and only 13 percent of retirees not currently doing so say it’s possible they will return to work. If employers start using incentives, more employees are likely to stay working. Working longer can have significant financial benefits, retirement delays of as little as three to six months have the same impact on standards of living in retirement as saving an additional 1 percentage point of income over 30 years.
Allowing employees the flexibility to work outside of the office is the most valued and could result in those employees working an additional 15 years, on average. The next most valued incentives are having flexible hours and getting financial rewards. Employees who can have flexible work hours or financial incentives to work longer are likely to work an additional 13 years, on average. Allowing employees to drop to part-time or work as a consultant, on average, adds an additional 12 working years to the employee’s commitment to the company.
As employers continue to grapple with managing an aging workforce and all its implications, considering options to keep talented people is a worthwhile strategy. It not only helps the employer, it can bolster employees’ financial security when they finally do decide to retire.