Why 70 Is the New 50


July 11, 2007

by Marshall Goldsmith

Author and management consultant Bill Byham’s new book, 70: The New 50, discusses an issue that I am seeing with my coaching clients as they near what used to be thought of as retirement age. I can also relate to this column myself!

Read on for edited excerpts of our conversation:

Many writers are saying that the retirement of baby boomers will cause skilled labor shortages in the U.S. Do you agree? 

Not necessarily. Companies can manage retirements rather than letting retirements manage them. They can be proactive in determining which older workers they want to keep and then take appropriate action, such as redesigning jobs and changing work hours, to make it attractive to people to stay longer. If they do manage retirements, companies can avoid the pitfalls that people have been projecting from the retirement of baby boomers (e.g., labor shortages in key jobs and loss of knowledge and contacts from organizations).

Why is 70 the new 50? 

In terms of health, longevity, and view of life, baby boomers in their sixties and seventies will be more like their parents and grandparents were at 50 – thus people can work longer if they want to.

How many people want to work into their sixties and seventies? And why do they want to keep working? 

Some 60% to 70% say that they want to work into their sixties and seventies because they will miss the camaraderie and the challenge of work, or because they can’t afford to retire. Companies are switching from defined-benefit pension plans to defined-contribution pension plans, personal savings rates are low, and there’s a lot of anxiety about paying for retirement health care – all these things are also causing people to rethink the age they stop working. But most want to work differently.

How do you make a job attractive to people who want to keep working? 

Adjust working hours and schedules and change job content; for instance, get rid of part of a job such as the leadership or management components, or make an individual a coach so he or she can pass on accumulated knowledge and skills. Organizations need to find out what specific people want and try to accommodate their unique desires.

What happened to the trend of people retiring earlier? 

It’s turned around. The average age when people actually retire has been going up for the last few years and is expected to accelerate dramatically.

What’s the U.S. government’s view relative to people working longer? 

The government is encouraging people to delay retirement because this would go a long way toward overcoming Medicare and Social Security deficits, and would solve most of the manpower skill shortfalls caused by the massive retirement of baby boomers. They are doing this by:

Gradually increasing age of eligibility for full Social Security benefits

Letting people over 65 or 67 (depending on when they were born) get full Social Security benefits and still earn any amount of money (new in 2000)

Allowing companies to change their defined-benefit plans so that individuals can start collecting their pensions while still remaining in their career company (new in 2007) – people will feel they are getting a 50% pay increase if they continue to work

In your book, you talk about wisdom. What is the difference between wisdom and competence? 

Wisdom is acquired through experiences and it allows individuals to more accurately predict the future. Wise people are not always right, they’re just right more often. We see examples of wisdom every day. Very highly paid lawyers are brought into situations because they are thought to have “good judgment.” They’ve seen how things play out most of the time, and they can share their insights so clients can anticipate problems and prepare for them.

Jack Welch is traveling around the world being paid a phenomenal amount of money to share the wisdom that he accumulated over his years at General Electric (GE). He’s very free about sharing the mistakes he made and what he learned from them. He can talk to a businessperson for just a short period of time and share wonderful insights into the problems that the person is facing and what should be done.

Competence is related to skills and abilities – things that are learned through education and training. The half-life of a skill competence (for example, new computer language) is short; the half-life of wisdom is long. All older people do not acquire wisdom. The ones that do are very valuable and should be considered for retention, if they want to continue to work.

What’s holding organizations back from actively retaining or rehiring older workers? 

There are two reasons: 1) inadvertent discrimination and misunderstanding about the skills, motivations, and attitudes of older workers, and 2) fear that they won’t be able to get rid of poorly performing older workers. This is the big unspoken issue. Up until now, organizations have let many poor performers “coast to retirement.” Given the chance to continue to work, organizations fear that many will want to stay longer and that organizations will have to face up to poor performance.

How are progressive organizations dealing with older workers? 

They’re getting select older workers to stay on longer. They are rehiring select people after they’ve retired (sometimes necessary because of how their benefit plan is structured). They are hiring select older workers who have retired from other organizations.

I am emphasizing “select” people – the people who have the critical skills, knowledge, contacts, or wisdom; the people who are successful in their current jobs and wish to continue to work. I am not suggesting that organizations should try to get everyone to work longer. For organizations, retaining successful people is a good bet because it is highly likely that their past success will continue on in extended employment.

How do you select the right people for retirement management. 

In retention or rehiring situations, the company has to rely on its performance management system and the good judgment of people who know the individual. When a person is basically retaining the same job responsibilities, then the decision should not be difficult – past job performance should predict future job performance. When a person is going to assume new responsibilities such as becoming an internal coach, then the unique characteristics of those jobs must be matched with the personal characteristics of the individual.

Selecting older workers from outside the organization is more difficult because, like any hire, you don’t have as much information about the individual. Companies have to do a thorough job of interviewing, particularly emphasizing motivation. Certain tests are quite effective in identifying competence but I highly recommend the use of job simulations, because they allow individuals to demonstrate their acquired wisdom.

It will be very difficult to generalize about baby boomers because of the large diversity represented. There will be boomers in their seventies who are truly like their parents in their fifties and there will be people who look old and act old. The diversity must be recognized by organizations in making selection decisions and in making policies.

Thank you for this valuable information. If this trend continues, I wonder if 70 will become the new 40! I am feeling younger already! How do our readers contact you? 

I’d love to hear from them. They can reach me at bill.byham@ddiworld.com