Re-thinking Retirement

The Challenge Of Longevity

Reprinted From The February, 1994, Issue Of Contractors Compensation Quarterly

The dramatic increases in health care costs and the on-going debate over national health insurance have over shadowed the equally significant issues of employee education and retirement. In our opinion, the three go hand and hand and will profoundly impact business enterprises well into the next millennium. Here is how.

Assuming an employee has lived into his/her fifties without signs of cancer or heart disease, that employee can expect to live well into his eighties if male and into her nineties if female. Furthermore the quality of life that can be expected for that employee, from a health perspective, is very, very good. That employee can expect to live a vital and active life well into his/her senior years.

We believe this extension of life at a high level of quality poses a significant challenge to today’s employees and businesses. This challenge takes several forms. First of all, a fifty-nine year old employee that is thinking of retiring in the traditional sense of that term is looking at twenty-five years of life expectancy. The baby boomers, now entering their fiftieth year likely can expect thirty years of quality life beyond traditional ages of retirement. This kind of longevity puts enormous pressure on retirement systems that were never engineered to service this many non-income producing years. Put simply, there is not enough money going into retirement plans for current and future retirees to live comfortably for thirty years without income in addition to retirement annuity and social security.

Even if money were not an issue, we believe, that active people won’t just disappear to some golf course for thirty years. As much as we might like to think of retirement bliss in such terms, its not the real world. Healthy people need to be productive. Work supplies a necessary identify and meaning that comes from doing something valued. Furthermore, there are other questions left unanswered. For example, what happens to the GNP when half the population is unproductive? Longevity is not only a social problem it is also an economic problem.

In short, employees must remain income producers longer than many have been led to believe. It is not unreasonable to assume that today’s younger employees must continue as productive workers well into their seventies. Hence, longevity forces us to re-evaluate our retirement plans and our adult education and training programs.

The educational industry both public and private has focused attention and resources primarily upon the young. Technological change and longevity means that our educational focus needs to change more toward the educational needs of the adult population. We believe that the educational needs of the mid-career and senior employee are seriously underestimated. For instance, to maintain current competencies and to train for second and third careers, the older adult workforce will need, demand, and, as importantly, be able to fund programs and institutions equipped to understand and deliver real “adult learning.” It is not at all unreasonable to assume, therefore, that adult education will equal or even surpass the needs of the traditionally youthful college crowd.

Implications For The Construction Industry

Employee longevity has significant implications for the construction industry. Of immediate concern is rethinking and re-engineering retirement vehicles. This will require a combination of working longer and adding savings/investment instruments. Secondly, greater competency requirements in the delivery of construction services, such as hazardous waste, health facilities, computer driven manufacturing, etc., means that construction firms need to retain and retrain its aging workforce. This older workforce is a gold mine of resources. To use these resources, however, will require serious rethinking and investment in company retirement and educational programs. The challenge of longevity is a sticky problem, but one for which there are, we believe, win/win solutions.