Millions of Americans have worked hard their entire lives in order to enjoy a peaceful and relaxing retirement, but longer life expectancies and Social Security struggles mean many people may face an older retirement age than they thought. We’ve compiled a list of 18 changes society would face if 70 became the new retirement age.
Workplace Adaptation and Ergonomics
An aging workforce may mean businesses have to invest in more ergonomic tools and adaptive workplace designs to accommodate physical changes in their older employees. There could also be a need for more flexible working arrangements, including part-time, remote, or consultant roles.
Extended Career Opportunities
Older adults will have to stay in employment for longer, and companies may see benefits such as reduced turnover. According to Forbes, there’s no need to look for another job “as long as you continue to have opportunities to learn, be challenged, enjoy what you do, connect with the values and culture of the company and like the people you get to do this with.”
Shift in Workplace Demographics
With retirement plans changing, the average age of the workforce will increase, and employers will have to implement more age-friendly workplace policies, such as flexible working hours and ergonomic adaptations. This diverse age range could also help to create a blend of experience and fresh, new ideas if they work well together.
Career Development and Training
Technological advancements are constant, and as a result, employers may need to invest more in ongoing professional development and training to ensure older employees are able to keep their skills up-to-date. Lifelong learning programs could also become more important in order to support career growth well into later life.
Financial Planning Adjustments
Individuals will need to change their retirement savings plans to ensure they have enough funds for their planned retirement age. According to the Center on Budget and Policy Priorities, raising the retirement age to 70 “would effectively cut currently scheduled benefits by nearly 20 percent.”
Economic Implications
Delaying the retirement age could potentially boost economic growth as the workforce increases and may lead to higher overall wages. However, older employees staying in management positions for longer could also delay career growth for younger people, which would affect their lifelong earning potential.
Generational Wealth Transfer
A later retirement means that older adults accumulate more wealth before they stop working, which could lead to larger inheritances for the younger generations. However, as they are building this pot up for longer, the transfer of wealth could be delayed, which may affect young people’s ability to invest in homes or other opportunities early on in their lives.
Social Security System Reforms
Raising the retirement age could help stabilize the Social Security trust fund by delaying payouts and increasing the amount of time people spend contributing to the scheme. According to CNBC, currently, only 10% of Americans plan to wait until 70 to start claiming social security, even though 72% know they could get bigger payouts if they wait until they reach that age.
Changes in Consumer Markets
With more adults in the workforce, there may be an increase in spending when it comes to health, leisure, and wellness as older people have more disposable income for longer. This might result in businesses adapting their marketing strategies, and the real estate market may change with less demand for retirement housing.
Psychological and Social Impacts
Extending the working life of Americans may lead to an increase in life satisfaction as older adults benefit from a sense of purpose, but, on the other hand, the prolonged years of work could lead to an increase in stress and health issues. There may also be shifts in social dynamics; for example, grandparents may be less able to provide childcare.
Impact on Health Insurance and Benefits
Employers may need to extend their health benefit programs for older workers, which could be a large cost. Science Direct has published a study that found an “increase in the retirement age negatively affects health outcomes as the prevalence of several diagnoses, e.g., mental health, musculoskeletal diseases, and obesity, increases.”
Retirement Planning Education
A later retirement age means society will need re-education on long-term financial planning, and this should be done from an early age. As a result, employers and financial institutions might offer more resources and tools to help employees plan for a longer work life. There could also be more public awareness campaigns.
Legal and Policy Adjustments
There would need to be changes in laws when it comes to age discrimination in the workplace to protect the aging workforce, and this would need to align with retirement policies across the public and private sectors. There may also need to be updates to pension plans and other retirement benefits.
Housing Needs for Older Workers
Currently, there is a big market for retirement homes outside of urban areas, but the housing market may need to adapt to give older adults the ability to live closer to business districts or public transportation accessibility. There could also be a rise in demand for home office spaces to accommodate older adults who work remotely.
Transportation and Infrastructure
If people are commuting for longer, public transportation systems might need improvements to cater to older workers, with a focus on accessibility and comfort. There may also be an increase in investments in infrastructure to ensure that older citizens are able to travel in a safe and convenient manner.
Changes in Retirement Culture
While many older people may still want to slow down before they reach 70, there may be a more gradual transition from working life to retirement rather than completely stopping work. As a result, there will be new cultural norms surrounding aging, and society will see older people as more productive.
Impact on Healthcare Services
Healthcare providers might need to adapt their services to meet the needs of an older working population. For example, there could be an increased focus on preventative healthcare in order to allow older people to remain productive in their older years. Employers might also need to invest more in health programs and benefits that cater to older people.
Volunteering and Community Engagement
At present, society benefits from older people who volunteer their time for community and charity work. This, however, could change if people are forced to stay in the workforce for longer. One solution could be that employers integrate volunteer work into their corporate social responsibility programs, which allows employees to give some time back to worthwhile causes.