Preparing for retirement: How benefits managers can help older workers

More Americans are working longer to prepare for rising retirement costs, largely driven by health care spending. (Photo: Shutterstock)

The U.S. workforce is getting older. By the year 2024, 25 percent of American workers will be over the age of 55, and a third of those employees will be over the age of 65. Declining birth rates and higher life expectancy are contributing to the rising numbers of older Americans in the workforce, but there is also something else: retirement. More Americans are working longer to prepare for rising retirement costs, largely driven by health care spending. It’s estimated that the average American couple will need $285,000 for medical expenses in retirement, and that’s excluding long-term care.

These rising costs are not only falling on the employee, but also on their company. According to a report by Prudential Financial, older workers unable to retire cost employers up to $50,000 a year – this includes the difference between the salary of an older worker and hiring a younger one. Further, annual health care costs for a 65+ year-old worker are twice those of a worker aged 45 to 54.