Age-Friendly Employers and Your Financial Wellness
By Michael Hodin
Aegon’s 2020 Retirement Readiness report on work, finances, and longevity, The New Social Contract: Age-Friendly Employers, enters an economic and employment landscape radically different from just a year ago — and suggests that new approaches to retirement have only become more important. Indeed, the “new social contract” first proposed by Aegon in 2018 stands the test of Covid-19, with even more urgency now from workers and employers to develop shared solutions for lifelong health and wealth.
The 2020 report focuses on the critical role of employers in this social contract — not just to provide 401(k)s and other financial tools, but also to fundamentally transform outdated retirement norms and help workers extend their careers. It is these “age-friendly employers” — with an inclusive culture, flexible work policies, lifelong learning programs, and wellness initiatives — who will attract, retain, and empower the vast majority of people who want to work past traditional retirement age, for both personal and financial reasons.
This bold, big-picture perspective is exactly what’s needed at a time when many are anxious about their financial futures. As examined in a recent report from Aegon’s Transamerica Center for Retirement Research, workers across generations are experiencing employment impacts due to Covid-19 and seeing their financial confidence decline. In the new Aegon Retirement Readiness report, just 25% of people globally believe they are on track to meet their goals for later-life income.
The scale of the challenge requires employer innovations tuned for 21st-century longevity. As Catherine Collinson, CEO and president, Transamerica Institute and Transamerica Center for Retirement Studies, puts it: “Age-friendly employers are integral to a new social contract for retirement. By collaborating with other social partners, employers can help mitigate the retirement-related risks workers currently face and pave the way for a better, stronger retirement system for future generations.”
Based on a survey of 16,000 people across 15 countries — Wow, no one else in the private or public sector has a set of research and data like Aegon, consistent over years — the report examines the main ways employers can help workers thrive over the course of their lives:
· Rethink traditional approaches to retirement. Workers are rejecting the antiquated idea that work should end — full stop — at 60 or 65. Just 34% of workers envision retiring this way, compared to 57% who envision a phased transition and continuing to work in some capacity in their later years. And with all we are learning about “working from home,” online work, and digital applications, you can bet this will reach 70% in a blink of an eye. By supporting this approach to different work across our life course, employers can help workers to fundamentally shift the financial calculus, with more income continuing later in life.
· Create workplace policies and an environment that supports older workers. To facilitate longer working lives, businesses must put the right policies, infrastructure, and culture in place. However, only 32% of workers say their employer has an age-neutral workplace, and 33% feel their employer is doing nothing on this front. Further, just 28% say their employer gives older workers the option to shift to part-time work, and only 24% believe their employer offers work suitable for older adults. Surely, as the Decade of Healthy Ageing launches globally, we can add to employer perspectives the idea of active aging — including work — aligning to healthier aging. Win-Win-Win.
Yet, even now there are bright spots the research revealed: 74% of workers are offered training to refresh their skills, supporting lifelong learning. Further, 50% report flexible working hours, which can be an important option for older workers with care responsibilities. The Global Coalition on Aging has published a set of Guiding Principles for the Multi-Generational Workplace that can help employers continue this progress.
· Provide financial education, services, and portable benefits. Employers are making progress in offering workers the tools to better save, invest, and manage their own financial wellness. More than half of workers globally are offered a retirement plan, and 41% have been prompted to save due to the actions of their employer or an event related to their job or career. However, there is still an outstanding need: 36% of workers say their employer or retirement plan does not offer services to help them prepare for retirement, and only 17% of workers have a written retirement plan.
· Offer tools for health, wellness, and prevention. Physical health and wellness are directly linked to financial wellness, helping to prevent the costly, chronic, age-related diseases that can quickly drain savings. Workers recognize the need, with 86% interested in workplace wellness programs. As highlighted in another recent Transamerica report, employers should also consider how health challenges and system gaps are especially pronounced for workers in rural areas.
Even before Covid-19, organizations and individuals were already shifting towards a new approach to work, finances, and longevity. Now, given the pandemic’s disruptions and financial impacts, the need is more apparent and pressing than ever. Only by joining together can businesses and workers find, adopt, and refine the manifold solutions needed for lifelong financial and physical health in a dawning era of 100-year lives. Thanks to Aegon for this guide, encouragement, data, and inspiration.
