Aging, Work, and Retirement PDF

Chapter 11: Aging, Work, and Retirement Copyright © Springer Publishing Company, LLC. All Rights Reserved. Overview  Defining work  Ageism  The older adult workforce  Retirement ‒ History of retirement ‒ Defining retirement ‒ Retirement patterns and options ‒...

Chapter 11: Aging, Work, and Retirement Copyright © Springer Publishing Company, LLC. All Rights Reserved. Overview  Defining work  Ageism  The older adult workforce  Retirement ‒ History of retirement ‒ Defining retirement ‒ Retirement patterns and options ‒ Factors related to the decision to retire ‒ Retirement planning Copyright © Springer Publishing Company, LLC. All Rights Reserved. Defining Work  A job can be any activity performed for pay and may be temporary or transient. ‒ An occupation may refer to a regular or relatively permanent field of work or means of livelihood. ‒ A profession typically refers to an occupation that requires college or postgraduate training.  Jobs end but work is always present.  Many older adult workers are continuing to work and plan to work longer than prior cohorts. Copyright © Springer Publishing Company, LLC. All Rights Reserved. Defining Work (cont’d) Figure 11.1 Participation rate at older ages levels off and begins to rise. Source: Bureau of Labor Statistics, http://data.bls.gov/PDQ/outside.jsp?survey=ln Copyright © Springer Publishing Company, LLC. All Rights Reserved. Defining Work (cont’d)  Organizations need to understand legal obligations that protect older workers as well as the skills that older workers can bring.  Organizations may have to consider modifications to ensure appropriate work conditions. ‒ Ergonomic alterations ‒ Accommodating health conditions Copyright © Springer Publishing Company, LLC. All Rights Reserved. Ageism  Because older adults are more different than alike, reporting “older workers” as a single group can distort the reality of health and aging.  Three aspects of ageism: ‒ Prejudicial attitudes toward older people ‒ Discriminatory practices against older people ‒ Institutional practices that perpetuate stereotypes about older people Copyright © Springer Publishing Company, LLC. All Rights Reserved. Ageism (cont’d)  In the world of work, the way in which managers and younger coworkers communicate with older adult workers may have the potential of being demeaning.  Ageism affects employer attitudes regarding advancing, training, retaining, and hiring older adults. Copyright © Springer Publishing Company, LLC. All Rights Reserved. Ageism (cont’d)  How to define an older worker? ‒ Chronological age Age Discrimination in Employment Act (ADEA) defines an older worker as older than 40 ‒ Functional age Focuses on individual’s performance to define the person’s age Copyright © Springer Publishing Company, LLC. All Rights Reserved. Ageism (cont’d)  How to define an older worker? (cont’d) ‒ Psychosocial definitions Focuses on the age at which society perceives a worker to be older, the societal attitudes regarding older workers, implications in employment settings when a worker is labeled “older” Older workers today are viewed as having less flexibility, less energy, lack of interest in training, and greater health problems They are also viewed positively as more loyal and reliable Copyright © Springer Publishing Company, LLC. All Rights Reserved. Ageism (cont’d)  How to define an older worker? (cont’d) ‒ Organizational approach Understanding the roles of individuals in an organization and the impact of the mix of ages Emphasizes expertise, seniority, and tenure rather than age ‒ Life-span orientation Emphasis in this approach is the recognition of substantial individual differences as people age. Each worker begins with different potentials and each person will improve and decline uniquely. Copyright © Springer Publishing Company, LLC. All Rights Reserved. Ageism (cont’d)  How to define an older worker? (cont’d) ‒ Psychology of work perspective Considers the impact of social barriers that prevent individuals from fully achieving their potential. This perspective is particularly helpful for understanding those individuals who are challenged by a poor regional economy, disability or addictions, or work limitations due to care of children, spouse, or older loved ones. Copyright © Springer Publishing Company, LLC. All Rights Reserved. The Older Adult Workforce  Workers are increasingly responsible for managing their own careers and retirement.  Age-related deficits that older workers need to overcome include: ‒ Changes in cognitive capacity ‒ Sensory decline ‒ Musculoskeletal decline ‒ Motor deficits ‒ Changing roles at home (caregiving) Copyright © Springer Publishing Company, LLC. All Rights Reserved.  The Older Adult Workforce (cont’d)  Prior to the ADEA, the expected age to exit the workforce was late 50s or early 60s. ‒ ADEA has provided a legal basis for older workers to remain in the workforce as long as they are able and choose to do so, except for in the occurrence of a bona fide occupational qualification (BFOQ). ‒ BFOQs allow organizations to establish an age limit if the case can be made that certain age-related changes would impair an employee’s ability to perform the required skills of the job. Copyright © Springer Publishing Company, LLC. All Rights Reserved.  The Older Adult Workforce (cont’d)  Older adults are also working longer due to amendments in the Social Security Act. ‒ 1983: Gradual increase in “full retirement age” from 65 years of age if born in 1937 or earlier to 67 for those born in 1960 or later. ‒ Individuals can choose to retire as early as 62 with a reduction in payment to offset the longer time they will receive payments. ‒ Social Security was never intended to be the only income in retirement. Copyright © Springer Publishing Company, LLC. All Rights Reserved.  The Older Adult Workforce (cont’d)  The world of work has evolved from one that incentivized early retirement to one that, in many cases, discourages it.  Cohort effects and the older worker: ‒ Employers may overgeneralize certain characteristics of a generation instead of treating each employee as an individual. ‒ Different values across generations may create conflict during team interactions and collaborations. Copyright © Springer Publishing Company, LLC. All Rights Reserved. Retirement  History of retirement ‒ In most countries, the idea of retirement is of recent origin, introduced during the late 19th and early 20th centuries. ‒ Previously older adults were valued for wisdom and experience. Forced retirement would have been contrary to the social values at the time. ‒ Germany was the first country to introduce retirement in 1889. Copyright © Springer Publishing Company, LLC. All Rights Reserved. Retirement (cont’d)  History of retirement (cont’d) ‒ The rise of labor unions in the late 19th century created conflict between seniority and management’s perspective that older workers were less able and more expensive. Mandatory retirement became a mechanism for removing older workers. Introduction of Social Security and company-sponsored pension plans made retirement more attractive. Now there are no required retirement ages except in the case of BFOQs. Copyright © Springer Publishing Company, LLC. All Rights Reserved. Retirement (cont’d)  What is retirement? ‒ Increasingly identified as more than a one-time event; instead, conceptualized as a life-span/life course transition Adjustment to retirement is variable and nonlinear More of a gradual retreat than a total withdrawal ‒ The nature, timing, and appearance of retirement have changed More of a blurred definition that involves multiple exits from and re- entries into paid and unpaid work Copyright © Springer Publishing Company, LLC. All Rights Reserved. Retirement (cont’d)  Retirement patterns and options ‒ Previously viewed as “the final exit from employment” or “the movement from the midlife to old age.” ‒ Currently retirement may be less an exit from the workforce and more of a process that is phased, complex, and dynamic. ‒ Multiple exit patterns have replaced the traditional, one-time transition. Copyright © Springer Publishing Company, LLC. All Rights Reserved. Retirement (cont’d)  Retirement patterns and options (cont’d) ‒ Researchers have defined crisp and blurred exit patterns. ‒ Crisp transitioners tend to be younger. ‒ Blurred transitioners are more likely to have limited financial resources and more likely to be in poor health. ‒ Those with the poorest health tend to be crisp transitioners or not work at all. Copyright © Springer Publishing Company, LLC. All Rights Reserved. Retirement (cont’d)  Retirement patterns and options (cont’d) ‒ Bridge employment is more common now Involves a person leaving a primary career role and entering in to another paid employment position ‒ Encore careers are also increasing The person may leave a traditional career to work in a position that is more gratifying than his or her first career Copyright © Springer Publishing Company, LLC. All Rights Reserved. Retirement (cont’d)  Factors related to the decision to retire ‒ Role of health Individuals in poor health generally retire earlier than those in better health. The presence of active depression in late middle-aged workers significantly increases the likelihood of retirement for both men and women. Early retirement can have a negative impact on physical and emotional health. Involuntary job loss worsens mental health and reemployment can reverse the decline. Copyright © Springer Publishing Company, LLC. All Rights Reserved. Retirement (cont’d)  Factors related to the decision to retire (cont’d) ‒ Role of finances Retirement decisions may be driven by financial needs and preparedness for exiting the workforce. People aged 50 and older with less than $50,000 saved felt significantly more anxious about their retirement savings. How to help individuals prepare financially for retirement? Access to employer-sponsored retirement plans, using home equity for retirement income, promoting longer worker lives (delaying retirement) Copyright © Springer Publishing Company, LLC. All Rights Reserved. Retirement (cont’d)  Factors related to the decision to retire (cont’d) ‒ Role of finances (cont’d) Older adults living at or near the poverty line have considerably less freedom in choosing to work. These individuals are more reliant on Social Security payments though Social Security was never intended to be the sole source of financial support for older adults. Copyright © Springer Publishing Company, LLC. All Rights Reserved. Retirement (cont’d)  Retirement planning ‒ Life span of a person in retirement has increased from 13 years in 1960 to about 20 years today. ‒ Preparing financially for this increased amount of time will require new ways of financial planning. ‒ Income after retirement can come from state pensions, occupational pensions, private savings and investments , donations (e.g., by children), and social benefits. Employers are moving from defined benefit plans (pensions) to defined contribution plans (401k and 403b). With defined contribution plans, employers expect employees to contribute and will often “match” their contribution. Copyright © Springer Publishing Company, LLC. All Rights Reserved. Retirement (cont’d)  Retirement planning (cont’d) ‒ Planning for known and expected future-care needs (such as retirement) may only be done by a slim majority of the population. ‒ Workers are now expected to be more active in planning for their own future. ‒ Planning for retirement and voluntary retirement improves adjustment to the retirement transition. ‒ Preretirement counseling may help people develop more realistic expectations about necessary lifestyle adjustments. Copyright © Springer Publishing Company, LLC. All Rights Reserved. Conclusions  As the population ages, the nature of work and retirement needs to adjust accordingly.  Some older adults choose to delay retirement either due to financial necessity or because they enjoy their work role. ‒ Bridge employment or encore careers may allow older adults to retire while still staying engaged in the workforce.  Education and retirement planning is key to a successful retirement transition. 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