Redesigning Retirement

Today’s workforce and workplace are in unprecedented flux. Organizations have serious talent gaps to fill, for all sorts of reasons: high employee turnover, low employee engagement, the dramatic shift to remote and hybrid work, the continuing Baby Boomer retirement wave, rapid advances in technology. Many of the most critical positions require sophisticated skills, experience, and social acumen. Those needs can’t all be met simply by hiring and training inexperienced workers or leveraging AI.

Since the Covid-19 pandemic began, labor-force participation has gone down—and job creation has gone up. According to the America Works Data Center, last fall the United States had 9.5 million job openings but only 6.5 million unemployed workers. Many industries, including manufacturing, wholesale and retail trade, education, and nearly every kind of health services, have far more openings than candidates with relevant experience—in some cases twice as many. The shortage of health care workers, for example, is projected to reach 3.2 million by 2026 in the United States. And the problem is global. A recent ManpowerGroup survey of 39,000 employers worldwide found that the share of companies reporting talent shortages rose from 35% in 2013 to an all-time high of 77% in 2023.

Meanwhile, the age wave continues to crest, with roughly 10,000 Americans a day reaching age 65. By the end of this year, every Baby Boomer will be 60 or older. Employers are increasingly aware that valuable skills, experience, and connections can walk out the door with each retiree. The aggregate impact on institutional knowledge, organizational cohesion and continuity, and, ultimately, shareholder value can be profound.

People who represent large portions of important workforce segments are on the cusp of retirement. For example, Mercer has estimated that from 2021 to 2026 the number of primary care physicians over the age of 65 will nearly double, from 18,000 to almost 33,000. NBC News has reported that nearly 6,000 pilots a year are hitting the FAA-mandated retirement age of 65, and airlines have seen their pilot ranks shrink significantly since the pandemic began.

If it’s unsettling news that so many Boomers are reaching the traditional retirement age, the corresponding good news is that many of them are looking for ways to spend their time meaningfully and productively, including by continuing to work after “retiring” from their regular jobs.

In fact, an older workforce is already here. Altogether, more than 10 million Americans who are 65 or older are currently employed, and that number is projected to rise to nearly 15 million by 2032. Today 27% of Americans ages 65 to 74 work or are actively looking for jobs, up from 20% in 2002. And people who are 65 or older now represent the fastest-growing segment of the labor force—by far. It’s projected that by 2032 one in four U.S. workers will be 55 or older, and close to one out of every 10 will be 65 or older. In Germany, Japan, and Italy, workers 55 or older already account for a quarter or more of the workforce. A Bain & Company study forecasts that 150 million jobs worldwide will shift to workers over 55 by 2030.

All those changes are part of a broader and deeply significant transformation in the shape of people’s lives—and in what it means to “age” and “retire.” Seventy-one percent of Americans who are 65 or older say that the best time of their lives is not in the past but right now or still in front of them. And 83% say that feeling “useful” is more important to them than feeling “youthful.” Working longer can make them feel both. This has a powerful implication: If “retirement” means completely ceasing work and devoting two or more decades to 24/7 leisure, it’s increasingly impractical, unappealing, and obsolete.

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. Nearly 60% of people who are in or nearing retirement say they would be open to working during their retirement. That includes some 20 million retirees under the age of 75. 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.

We’ve been closely following these topics—changing workforce demographics, the evolution of retirement, and the effects on employers and employees—for decades. Having surveyed more than 100,000 people in 20 countries, we believe that now more than ever it is time for businesses to recognize and capture the value offered by older workers.

Why Older Workers Want to Work

Americans are living longer than they did in previous generations. A majority of today’s 65-year-olds will live well into their eighties—and many considerably beyond. That can be a lot of time to fill. Two-thirds of older Americans now view retirement not as a time of pure rest and relaxation but as a new chapter in life, with plenty of room for new ambitions and renewed purpose.

Working is often on the agenda. Many “working retirees” (no longer an oxymoron) are happy to have part-time jobs in familiar roles—often with their former employers. Others want to try something entirely different, sometimes related to an avocation they put aside earlier in their lives. Many are ready to say so long to managerial responsibilities but keep their hands in as individual contributors. And others enjoy the freedom and flexibility of working for themselves as entrepreneurs, consultants, or contractors.

If older people have more years to enjoy purposefully, they also have more years to fund. Many Americans approaching or in retirement do not have nearly enough savings. The Boston College Center for Retirement Research has found that nearly half of working-age households are at risk of not being able to maintain their current standard of living in retirement, even if the people in them work to age 65. Our recent research found that more than 40 million workers were thinking of retiring later than planned (by an average of five years), most often for financial reasons. Working longer is prudent for many—and necessary for some.

Working longer has also been linked to lower mortality and greater well-being, in no small measure because it enables people to stay mentally, physically, and socially active and purposeful. The exception, of course, is work that is highly stressful or physically demanding, which can be detrimental to people’s health.

The Value of Older Workers

What older workers bring to the table is well documented and yet highly underappreciated. They have knowledge and skills, both functional and organizational. They offer commitment, loyalty, and engagement—valuable traits often in decline these days. They can serve as mentors and role models of resilience and emotional maturity to younger colleagues struggling with the increasing demands of their jobs and lives.

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.

To capture the value of older workers, companies may first have to shed some wrongly held assumptions. Among the most prevalent myths about older workers are these:

They’re out of touch, set in their ways, and slow to learn.


Our research finds that most older workers are curious and eager to learn (though often denied the opportunity). They aren’t so much out of touch as differently in touch, because of how cognitive abilities mature. Older adults tend to have higher levels of “crystallized intelligence,” which enables them to make connections and informed decisions, whereas younger workers tend to have higher levels of “fluid intelligence,” which involves abstract thinking and new ideas.

They struggle with technology.


Older workers are obviously not digital natives, but they’ve been learning and adapting to new technologies throughout their lives and to new business systems throughout their careers. During the pandemic they made the technological transition to remote work far more capably than many employers assumed they would.

They’re blocking younger workers from getting jobs, responsibility, and promotions.


The “lump of labor” theory, disproved by economists, is based on the misconception that there is a finite amount of work in an economy, when in fact the amount of work and the size of the labor force are dynamic. With more workers comes business growth. And as we’ve noted, older workers, when given the opportunity, can share their experience and foster the development and success of their younger colleagues.

They cost more.


This may be true if workers can be easily replaced, but most cannot. Older workers are typically worth a premium because they have skills and experience that add value—and they stay in their jobs longer, which reduces turnover costs. Part-time or project-based roles for experienced workers can also be a very cost-effective way to supplement an organization’s workforce.

The Commonwealth of Massachusetts has become a leader in acknowledging the value of older workers. The state was the first in the country to attain certification as an “age-friendly” employer. Forty-four percent of its 43,000 employees are over age 50, 16% are over 60, and hundreds have returned to part-time work after retiring. Early in the pandemic the number of state employees working remotely jumped from 2% to 51% (customer-facing employees continued to work on-site) in a few weeks. Some doubted that seasoned workers could make the technological leap to remote work. But they did. In fact, as Jeff McCue, formerly the state’s chief human resources officer, explains, “They were the ones holding things together. And we have to hold on to these trusted folks, who remain curious, industrious, and focused on customer service. They also serve as examples and mentors to their colleagues. That’s our business case for being age-friendly.”

Filling Talent and Experience Gaps

If you are experiencing labor and talent shortfalls and have found that many of your valuable employees are exiting into retirement, it’s time to act. We recommend that you take five steps: Preserve experience, replenish experience, share experience, offer flexibility, and leverage age diversity.

Preserve experience.


Attentive organizations encourage good employees in hard-to-fill positions to postpone retirement. One way to get them to stay on is to allow them to phase in to retirement, downshifting in terms of hours and responsibility. That may involve making adjustments to compensation and benefits but typically not to health coverage or retirement-plan payouts. Our recent research shows that 68% of workers age 50 or older would like the opportunity to move into retirement gradually, but Mercer reports that only about 36% of global employers offer phased retirement to everyone on staff.

Several measures can rejuvenate older employees and prolong their careers and contributions. Training in new fields can inject invigorating variety into their jobs and introduce them to new perspectives. Lateral moves to other parts of the organization can allow them to apply their skills in new ways while learning new things, making new contacts, and assuming new responsibilities. Rotational assignments on project teams let them share their expertise and multiply their contributions. Sabbaticals (which are good for employees at all career stages) offer them chances to unwind from their jobs, engage in other pursuits, and restart work with renewed focus and enthusiasm.

Two-thirds of older Americans now view retirement not as a time of pure rest and relaxation but as a new chapter in life, with plenty of room for new ambitions and renewed purpose.

Principal Financial Group preserves the experience of tenured pre-retirees (employees who are 57 or older and have 10 or more years of experience) by offering an “easy ramp into retirement” with reduced time commitments and responsibilities. It also encourages retirees to “boomerang” back to work after a six-month break to fill specific roles, often bringing retired executives back to coach newly promoted executives. In addition, the company has created a global program that uses an online market to match seasoned employees with colleagues looking to be mentored.

Jon Couture, the chief human resources officer at Principal, explains the strategy this way: “First, we’re in the retirement business, so we should be good at enabling people to transition into retirement, and we appreciate the value that people put on flexibility. Second, we know the value of long-tenured wisdom, institutional knowledge, and mentoring. We want to tap into it as much as possible, and our retirement-eligible staff have a phenomenal desire to share the wisdom they have.”

Replenish experience.


When recruiters think of new hires, they’re usually not picturing candidates in their fifties and sixties. These people remain a substantially untapped resource. Your own retirees may be easiest to recruit and bring up to speed rapidly, because they know the organization and its culture, but you should also look more broadly, including at the competition’s retirees. Many willing workers have been moved into premature retirement by layoffs and early retirement incentives.

As you search for new employees, root out any assumptions and language in job descriptions and recruiting methods that may discourage older candidates. Don’t put a cap on the years of experience required or use subtly ageist phrases like “energetic” or “digitally savvy” that may signal a bias against older workers. Field-test your organization’s career site with a small panel of older employees and retirees.

If older hires have been out of the workforce for a time, they may need refresher training on the latest work methods, systems, terminology, and technologies, but because of their experience, onboarding and training them typically won’t take as long as it does for younger workers.

There are many ways to access this pool of older potential employees. You can reach them through referrals and age-friendly recruiting channels such as,, and If your organization has a retiree network, use it for both recruiting and referrals. Helpful ventures with a specific focus are also emerging: Wahve (Work at Home Vintage Experts), for example, provides specialized expertise from professionals with deep experience in the insurance industry. National Experienced Workforce Solutions assists government agencies with recruiting, enrolling, and administering pay and benefits for older contract workers. Path Forward helps organizations recruit and onboard experienced people, predominantly women, who are returning to the workforce after extended periods of childcare or, increasingly, eldercare.

Sometimes older workers are ideal for the job. The University of Colorado Anschutz Medical Campus (designated an “age-friendly university” by the Age-Friendly University Global Network) hires “older adult research specialists” (OARS) and trains them to recruit other older adults to participate in clinical studies. The OARS’ work includes educating people about what participation involves and following up to encourage them to complete clinical trials. OARS help bridge the cultural divides between study participants and research professionals caused by differences in age, socioeconomics, and health literacy. Thus they play a crucial role in increasing representation among historically underrepresented groups—including rural seniors—in research studies.

Share experience.


A key way that seasoned employees can add enormous value to their organizations is by passing their knowledge on to their younger colleagues, helping accelerate their development and improve their performance. If this isn’t happening in your organization, you’re missing a two-way opportunity.

Direct experience sharing takes a variety of forms. Older employees can mentor younger employees in an ongoing way, teach them in formal training programs and informal sessions, and coach them, often as they transition into new roles. Younger workers can shadow their more-seasoned colleagues. And older workers can advise project teams and work groups in need of specific expertise. Phased retirement programs can play an important role here. In Bank of America’s mainframe-technology area, for example, retirements are planned well in advance, and as tenured employees gradually reduce their hours they’re paired with newer employees who become their apprentices.

Older employees can also share their knowledge indirectly by helping develop business information systems that capture and disseminate it. This role is more important now than ever: As new AI systems transform how we gather and distribute information, there’s a growing need for people with the experience and judgment to evaluate the performance of those systems—and to notice when they go awry.

Nowhere is the sharing of experience more important today than in nursing, which may be the most widely understaffed job category in the increasingly understaffed health sector. Allegheny Health Network, part of Highmark Health, has come up with some innovative solutions to that challenge. Nurses returning to work after time away first receive online refresher training through the University of Delaware and then shadow colleagues to get reoriented. The company has also created a new digital program that gives experienced nurses the option of working remotely: Patient rooms are equipped with smart TVs, tablets, and cameras, enabling digital nurses to check in on patients, answer questions, handle documentation-intensive tasks such as admission and discharge, and even provide guidance to in-room nurses. This allows on-site nurses more time for patient care and gives experienced nurses a new option for extending their careers.

Offer flexibility.


More than ever before, engaging experienced employees (and talented people generally) requires work arrangements that are flexible on three dimensions.

The first is timing. Most employees approaching retirement would like to reduce their working hours along the way, and most employees interested in working during retirement are looking for part-time or flextime positions, which allows employers to tap them when demand peaks or special experience is called for.

The second is location. Like employees of all ages, older employees appreciate the benefits of working remotely. But our research finds that they also appreciate the social connections of the workplace and so tend to be happy to work on-site when necessary.

The third is benefits. Older employees need and appreciate life-stage-specific benefits, including those related to caregiving and retirement planning. Retirees working part-time are not so interested in paid time off, but they highly value health insurance (supplemental for those with Medicare) and insurance for dental care (which Medicare does not fully cover). A few organizations are now offering brief leaves for new grandparents. When companies provide such benefits, they send an important signal to older employees that they understand what matters most to them.

Ken Dychtwald PhD: Futurist, Best-Selling Author, Psychologist, Gerontologist, Entrepreneur

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