The 6th annual Aegon Retirement Readiness Survey, released this week by the Aegon Center for Longevity and Retirement, includes a landmark finding: 57 percent of those surveyed envision that they will continue working, in some form, into retirement. And, for the first time, over half of the countries surveyed achieved a 6.0 or better “readiness for retirement” status, with an overall average “readiness” of 5.92 across Australia, Brazil, Canada, China, France, Germany, Hungary, India, Japan, The Netherlands, Poland, Spain, Turkey, the UK and the US. In other words, on a scale of 1 to 10, where perfect financial readiness is a 10 – according to such metrics as savings – we’re doing better across the 15 societies. And, because Aegon has surveyed over 86,000 workers and retirees since 2012, the data set for measuring the level of readiness is pretty solid. Nor is it inconsequential that longer working lives are as good for our health as for our pocketbooks, the former also having a positive impact on our financial health.
Welcome to the 21st Century! And a profound paradigm shift with impact on every level of society and the economy. This is as true for individuals and employers, both, with the Survey providing guidance on shifting work and retirement norms related to savings and health.
For governments still faced with outdated 20th century models of retirement – where work ends abruptly and fully at 65, or younger – the Aegon data can inform health, pension, and savings reforms. For the WHO, given the Survey’s focus on the relationship between health and wealth, it can help to inform the implementation of the new Ageing and Health Strategy, which is based on the idea that global public health in an era of longevity must attend at least as much to our “functional ability,” – or our ability to maintain capabilities as we age – as disease or illness itself.
For individuals, the Survey underscores the importance of a comprehensive, concrete longevity plan that includes health, wellness, and financial planning elements. Such a plan can make a life-changing difference: 74 percent of those with a written retirement plan are always saving for retirement, versus just 19 percent of those with no plan. And in addition to saving, individuals must also plan for flexible work arrangements and extended employment, including by accepting their part of the bargain on issues like pay and promotion.
For employers, the results identify the growing talent pool of older workers; the majority of whom expect to continue past traditional 20th century retirement age. Tapping this immense talent resource will require flexible work arrangements, such as part-time work, on-demand jobs, and tele-commuting, as well as programs to support the increasing number of employees caring for older relatives. This also means helping workers maintain their own health so they can stay in the workforce, as 91 percent of those surveyed say they would be interested in health- and wellness-related offerings from their employer.
For governments, the Survey highlights the urgency of designing programs that help individuals to navigate the new retirement landscape. These include awareness campaigns focused on planning and saving for retirement, incentives for “phased retirement” and longer working lives, and working with employers to articulate the ROI of recruiting, hiring, and retaining older workers. Forward-looking governments – such as Norway, which recently raised its national retirement to the mid-seventies, and Singapore, which now gives employers incentives to hire back older workers – will seek out and assess a variety of programs from around the world. All this is opening a new period of global policy innovation for today’s challenges and opportunities related to later-life work, saving, and health.
For the WHO, the findings show how the promotion of health and wellness can, and must, be integrated into wellness strategies where the metric is functional ability. According to the Survey, 29 percent of those who retire sooner than planned are forced to do so because of ill health. Indeed, financial and physical wellness are inextricably linked, and together they require joint strategies to help older adults maintain their functional ability and work as long as they want, which also provides the resources necessary to afford medical needs. Therefore, the Survey’s results should help to guide the implementation of the WHO’s Ageing and Health Strategy, recognizing and leveraging these connections.
From a broader perspective, the Survey reveals the need for a wholesale cultural shift to support later-life work. The retirement models and assumptions of mid-20th century are not effective for today’s needs. Individuals are already realizing this and planning for our new 21st century reality; we now need employers, governments, and global institutions to catch up. This means promoting perceptions of older workers as contributors, leaders, entrepreneurs, and prized talent, and then translating this shifted culture into new policies and strategies. Workers no longer expect or want their careers to end at 60 or 65 – our solutions can’t end then, either.