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Working Longer: Evidence and Implications for a Heterogeneous Workforce

Over the last two decades several factors have contributed to an increase in the number of retirement-age workers who continue to work. Americans are living longer and many welcome the opportunity to keep earning a paycheck later in life while doing a job they enjoy. Yet for individuals who find themselves without adequate savings to sustain a secure retirement, working longer may be the only path to financial stability.

Research funded by NEFE addresses one possible solution to some of the challenges faced by retirement-age workers who wish to remain in the workforce: phased retirement programs. Phased retirement programs offer employees who want to extend their years of work greater flexibility as they approach and pass the age of traditional retirement. For employers, these programs serve as a valuable workforce planning tool that can help retain talent and prevent future labor shortages. Despite these benefits, formal phased retirement programs are offered by as few as 20 percent of U.S. employers.

This study identifies barriers to implementing phased retirement programs through an analysis of the 2014 Health and Retirement Study, a survey of the relevant literature, and in-depth interviews with employers and workforce retirement experts. The study also points to several policy changes that can be used to support successful implementation of these programs, including revising workplace laws and regulations that are out of step with the late-retirement trend and adding a financial education component.

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