What the Changing World of Work Means for Your Retirement
Robert Powell, CFP®
The way people work today is being disrupted by the pandemic and megatrends in the global economy, such as advances in digital technology and aging demographics, as well as changes in family life and working patterns, according to a new study recently published by Aegon.
According to the study, The New Social Contract: Age-Friendly Employers, the concept of a “job for life” is becoming a thing of the past, thereby increasing the need for more portability of employment and retirement benefits.
In an interview, Catherine Collinson, the executive director of the Aegon Center for Longevity and Retirement, as well as the CEO and president of Transamerica Institute and Transamerica Center for Retirement Studies, said the world of work is changing and it was changing even before the pandemic.
And there are a number of major trends driving that change, she said.
One, people have the potential of living longer, more than any other time in history. And longer lives imply, Collinson said, either we’re going to spend more time in retirement or more time in the workforce.
“And what we see is people want to do both,” she said.
According to the study, only 34% of workers envision immediately stopping work and entering retirement. Yet, one in three workers (33%) feel that their employer is not doing anything to facilitate a multi-generational workplace, which could help them continue working later in life.
The study also noted: “In this changing world, if employers want to retain the best talent, they must support their employees in achieving their life goals.”
Two, almost three in five workers (58%) “somewhat” or “strongly” agree that a “job for life” is becoming a thing of the past. And if that’s the case, Collinson predicts that many workers will be taking some time out of the workforce to parent and/or become a caregiver, or become part of the gig economy. “There are all sorts of possibilities,” she said. “And even more possibilities now that we're in the pandemic and many people's employment situation has been disrupted.”
Collinson also addressed the degree to which workers who want to stay employed or re-enter the workforce will experience ageism. “In our research and other research, it manifests itself in different ways,” she says.
According to Collinson, it may take longer for older workers who have become displaced to find a job or find a job at the same level or at the same level of pay as they were earning before.
And there are other subtle differences in the workplace. “Older workers are potentially less likely to get raises or promotions,” she said.
And some industries, like the tech industry, are notorious for being youth-centric.
But Collinson also sees these revelations as an opportunity to change, “especially now, as we're talking about inclusion and diversity on the broadest possible scale.”
“Ageism,” she said, “is something that also should be addressed.”