Upper level workers reconsider retirement plans
Financial executives may stay on the job longer than they had originally planned, mostly due to the blows the economy has dealt them over the past five years, including hits on the stock market and in their 401(k)s.
Some 52 percent of chief financial officers recently polled indicated they are either putting off or reconsidering retirement because of economic uncertainties that didn’t exist five years ago, according to a survey developed by Robert Half Management Resources that surveyed more than 1,400 CFOs nationwide.
Of those surveyed, 43 percent said their retirement plan had not changed in the last five years; 27 percent said they plan to spend more time working than they had planned on five years ago; and 25 percent said they were less certain about retirement today and couldn’t predict when they might retire.
Sixty-two percent of respondents who had rethought retirement said the economy was the primary reason, while 11 percent blamed social security concerns, 10 percent cited health care system concerns, and 9 percent indicated they’ve changed their plans as a result of changes in family needs.
While the U.S. economy has been in a recession for more than a year, tenured employees in the marketplace have seen large decreases in their home values, the stock market, their 401(k) plans and some other personal investments, observed Don Gavagan, regional vice president for Robert Half Management Resource’s Michigan operations.
“In lieu of the large declines that have taken place during the recession, the nest egg they had put away, unfortunately, has diminished, so they have no choice but to remain in the work force,” Gavagan said.
The flip side of the coin, he said, is that 43 percent of survey respondents said they were not making changes in their retirement plans.
Gavagan said he has seen from personal experience in working with tenured workers in Michigan that several people who had retired or were planning on retirement now have reentered the work force as consultants or plan to remain in the work force as consultants because of the decrease in their 401(k)s or personal retirement plans.
“One of the reasons they were seeking retirement anyway was to have a little bit more work/life balance — a little bit more freedom to do what they would like, so the consultant lifestyle actually affords them the opportunity to maintain their current standard of living while increasing their work/life balance,” Gavagan said.
Some return to the work force because they have no alternative and others return because they want to stay engaged. One individual, for instance, retired but found that his retirement investment plan was deteriorating, so he had to return to the work force to provide for his wife and their retirement. Another individual who retired from the financial sector got back into the work force to help some of the smaller banks that might benefit from the industry expertise he had.
Paul McDonald, executive director of Robert Half Management Services, said employers might reap unexpected benefits from these delays in retirement, because retaining tenured staff means the extensive knowledge, experience and skills of those employees remain available to the company.
“Even in a weak economy, companies must be mindful of retaining tenured staff by offering benefits they value, such as greater scheduling flexibility or part-time employment,” McDonald said. McDonald not everyone who plans to stay in the work force will want to work 40 hours a week.