American workers, employers and the government are going to have to get used to a new definition of retirement and retirement plans, experts say.
Employees in the not-so-distant future will need to work longer and require easy, flexible, automated approaches to savings.
But the topic of working longer is "like the weather," said Joshua Gotbaum, guest scholar, economic studies, at the Brookings Institution. "Everyone talks about it, but few do anything about it, and even fewer prepare for it."
Mr. Gotbaum spoke during one of several discussions on creating retirement models that will meet the challenges of longevity and ensure stability and intergenerational fairness.
In another panel, Catherine Collinson, executive director, Aegon Center for Longevity and Retirement and president of Transamerica Institute, cited research showing that nearly one-third of workers globally say they want a flexible transition to retirement, but only about 25% of employers now have phased retirement programs.
Panelists in both sessions said there is a need for a mindset change about attitudes toward retirement and work.
The idea of working longer is a major challenge for employers, educational institutions and government, Mr. Gotbaum said, and he made suggestions to meet that challenge.
First: Change the retirement age. Mr. Gotbaum acknowledged the idea is "incredibly politically controversial" and that it is difficult to change people's expectations of what the norm is for retirement. Second: Change employment policies so people can work longer with their current employers, even if not in their current position. Employers should be open to a negotiated, phased retirement, he urged.
David C. John, senior strategic policy adviser, AARP Public Policy Institute, said that with people living longer and the promised payout of a defined benefit plan no longer a widespread benefit, what's left "is saving."
That is simpler said than done, because while some countries such as Australia and the U.K. have "solved part of the problem; no one has solved it all," he said.
Mr. John said two things are necessary to boost savings: a workplace opportunity to save and auto enrollment.
But auto enrollment won't be enough. "You have to have a seamless transition" for the assets when people change jobs, he said, so they don't lose or spend their savings, and there needs to be a mechanism to create a retirement income stream.
Mr. John and Mr. Gotbaum both said employers need to open their payrolls and retirement plans to part-time and contingent workers. The industry needs to develop a plan that travels with workers as they change jobs or have multiple jobs so they can contribute to just one plan, Mr. John said.
Mr. Gotbaum proposed requiring employers to transfer – at no fee – retirement accounts of new employees. Those sentiments were echoed by Ms. Collinson, who said a recent Aegon survey recommended employers offer a workplace savings plan and extend it to part-time workers; provide employee education and opportunities to save; adopt auto features in their retirement plans; foster an age-friendly environment; and consider phased retirement programs.