Thirty percent of U.S. workers ages 60 and older don’t plan to retire until age 70 or older, according to a recent CareerBuilder survey. Another 20 percent don’t know if they will ever be able to retire.
Financial reasons typically are the top reason workers are postponing retirement, as older workers try to ensure a sufficient nest egg. However, 34 percent of those surveyed aren’t even sure how much money they need to retire, and many of those workers might not be prepared. The survey found that 26 percent of workers age 55 or older don’t participate in a 401(k), IRA or other retirement plan.
“Faced with the expectations of living healthier for longer, older adults may opt to remain in the workforce for longer and defer savings, pensions, and Social Security for older age,” said Rosemary Haefner, chief human resources officer for CareerBuilder, in a statement.
“This increased workforce participation for older adults has implications for retirement policy, health care financing, Social Security and the behavior of employers and employees alike.”
It’s important to remember that, in general, employers can’t discharge or force an employee’s retirement just because the employee has reached a certain age. Separations from employment must happen for reasons other than reaching a certain age. California’s Fair Employment and Housing Act (FEHA) and the federal Age Discrimination in Employment Act (ADEA) both prohibit retirement plans with a mandatory age of retirement. A few limited exceptions apply (2 Cal.Code of Regulations sec. 11084).
Be mindful that comments regarding when an employee plans to retire may be considered evidence of age-related bias. You can still provide factual information to employees about your company retirement plans, just don’t press employees about when they are going to retire or engage in uninvited discussions about voluntary retirement plans.