America’s Other Retirement Crisis - InvestingChannel

America’s Other Retirement Crisis

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America’s Other Retirement Crisis

At The Juice, we read and listen to everything we can get our hands on about retirement. Because, as you might have heard, we’re focusing on all things retirement in 2024. We’ll get back to how to invest for retirement in future installments, but today we deal with an interesting juxtaposition we suppose.

We all know about the primary retirement crisis. The conundrum millions of people face of not having nearly enough money saved to retire at all, let alone enjoy a comfortable retirement without work. The one we try to address in The Juice.

There’s another crisis well underway that could help alleviate the main one. While we don’t think how we address this crisis is the answer, it can help. And, if you have no other choice, as the saying goes, beggars can’t be choosers

A tip of the hat to Harvard Business Review for their excellent article, Redesigning Retirement: It’s time for a new deal between employers and older workers.

First, some numbers from the piece:

  • More than three-quarters of companies report staffing shortages at an all-time high.
  • As of fall 2023, the United States had 9.5 million job openings, but just 6.5 million unemployed workers.

At the same time, HBR notes that 10,000 Americans hit age 65 each day. Of the older crowd, close to 60% say they’re open to the idea of working in retirement. 

Without considering complications, this seems like the perfect marriage. There’s a ton of work and a bunch of older people who need work, as they face a retirement crisis on some level. 

However, all else isn’t equal here. 

Some issues come to The Juice’s mind. 

  • One, age discrimination. Sometimes, companies want what they call fresh (and young) talent and these are the only people they’ll talk to. We don’t quite get this. Using a sports analogy, the best teams have a mix of this and veterans who not only contribute, but use their experience to help groom younger workers. It’s not like every “old person” looking for work doesn’t know how to use a computer. 
  • Two, skill gaps. There are certainly some “old people” who don’t know how to use computers. If the gig requires a knowledge of AI, social media or cryptocurrency, the 59-year old whippersnapper who spent 30 years working for an insurance company might not be all that attractive — or useful — to a tech company or a company that uses technology.

HBR addressed this competing issues:

We need to overcome lingering ageist stereotypes and start thinking of older and retired workers as a large, versatile, and valuable labor pool—one that’s significantly underutilized … If employers can get better at hiring, retaining, and engaging older workers—redesigning the employment deal—they’ll discover countless options for mutually productive matches.

This doesn’t directly address this issue. But it does bring up something obvious that needs to become more obvious to today’s employers. It’s about how you use older workers. How you take what they offer and appropriately leverage it. 

The same thing happens in reverse every single day. You put entry-level workers in positions commensurate with their skills. And you have older, more experienced employees help them climb the ladder. 

Why can’t we put older people in positions where we can utilize their strengths and have younger people help them fill in some knowledge gaps? 

HBR put it this way, referring to older employees:

They also possess the emotional intelligence that’s key to relating to customers, especially if the customer base itself is aging. In 2022 nearly a quarter of U.S. consumer spending came from people age 65 or older. Given that older Americans constitute such a large and growing market, their perspectives are essential to product development, marketing, and customer service.

The direct business case for engaging older workers is that they’re capable, experienced, and productive; relatively easy to onboard and get up to speed; and willing to work in flexible ways—part-time, hybrid, on demand. The broader business case is that they can transfer their knowledge and experience to their colleagues, help maintain organizational coherence and continuity, and add diversity (especially cognitive diversity) to work teams and organizations.

HBR goes on to challenge the myths that older workers are slow to learn and bad with technology. They also point out something The Juice recently highlighted in Has Retirement Had Its Day? 

That, come mid-life, lots of people are seeking new professional challenges. To avoid a mid-life rut, people need to change how they work and consider this new phase of life a new and exciting chapter. Working better, less-demanding schedules and using the skills you developed to find your place during a time when, like it or not, your mind works differently:

The good news is there’s a second kind of intelligence that increases in your forties and fifties and sixties and stays very high well into old age called crystallised intelligence. That doesn’t require working memory, thank God, because things get harder to recall … What it requires is pattern recognition, teaching capacity and the ability to recognise quality in others. In other words, you’re good at building teams, you’re better at being a manager, you’re better at using metaphor and teaching people how to do things. So that’s the second phase of the best career, is to move from the individual problem-solving cowboy to the great professor later on, whatever that means in your specific profession.

The Bottom Line: As is often the case, it all ties together. The research on how we function psychologically and, subsequent to this, professionally as we age and how we can best use older workers to deal with the problem of filling important roles in our nation’s workforce. 

We’d love to hear your experience — as a younger or older worker — in this regard. Both in navigating work and dealing with a retirement shortfall that makes employment later in life a necessity. As always, use the feedback link at the bottom of this page to send The Juice your thoughts.

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