In the iconic 1985 film “Back to the Future,” Marty and Doc ride a time machine built from a Delorean car 30 years back in time. They end up in 1955 – the middle of the Baby Boom – where they save the past, and then blast off again to an impossibly distant future – the year 2015.
As Chairman of the Senate Aging Committee, that film came to mind as I chaired a recent hearing on the increasing trend of seniors working past retirement age, and the positive impact this has on their own financial security and on economic growth here in Maine and across the nation.
In many ways, the Baby Boom generation is leading us “Back to the Future,” where seniors stay actively engaged in the workforce, contributing their years of wisdom and experience to employers and colleagues, while shoring up their own financial security. For most of the last century, seniors had been withdrawing from the workforce as Americans came to view retirement as a time of uninterrupted leisure that could last for decades. By the year 2000, only 32 percent of Americans age 55 and older were still working, and the average age of retirement had dropped to just 63.
But the Baby Boom generation has reversed this trend. Today, 40 percent of workers 55 and older remain in the workforce – a ratio not seen since the Eisenhower Administration.
The Baby Boomers are remaining in the workforce longer for many reasons, but one leading reason is the need for financial security. Previous Committee hearings have explored the issue that many Americans today don’t have the resources they need to live comfortably in retirement without working.
It used to be said that retirement security was a three-legged stool – the first leg being an employer-provided pension, the second being Social Security, and the third being retirement savings. But with the estimated $7.7 trillion gap between what Americans ages 32 to 64 have saved and what they will need for retirement, that third leg has become “wobbly,” and a fourth leg – continued work – has been added.
Experts tell us that the reengagement of seniors in the workforce could not have come at a better time for our economy. According to human resources professionals, 40 percent of U.S. employers are struggling to fill jobs with qualified workers and could face a crisis if they lose their older workers.
But employers don’t need these workers just to fill positions – they need their talent, their institutional knowledge, and especially their strong work ethic. Workers 55 and older are significantly engaged in their work, a key characteristic of a high-performing workforce. In fact, an engaged workforce is so important to the bottom line that a Fortune 1000 company could improve its profits by $150 million per year if its entire workforce were as engaged as older workers tend to be, according to the AARP.
Despite the strengths seniors bring to the workplace, some face unspoken – and misguided – bias that is difficult to prove, but widely reported. Whatever the reason, it takes twice as long for a senior to find a new job as it does for a younger person, and the job hunt can be especially tough on workers laid off late in their careers.
As this generation heads “Back to the Workforce,” employers who want to attract and keep older workers should recognize that many return to work because they want to, not because they have to. These workers are looking for flexible workplaces where they can continue to contribute and where their skills will be valued.
