Delaying Retirement (Again)

First, they left. Then they came back. Now they want to leave again... but they can’t.

Tariff whiplash is forcing older workers at or near retirement age to keep working—at least until the market stabilizes and their 401(k)s stop losing money. This group includes those who retired during the pandemic, only to unretire a few years later when high inflation began eating into their savings. Over the course of the two days following the announcement of tariffs, US markets lost a cumulative $6.6 trillion, and despite some recouping, four in ten people have seen their retirement savings decline by between $10,000 and $50,000, according to one study (the market reversed some of those losses over the course of April). “Older people are trying to hold onto their income as long as possible,” says Shanda Mints, vice president of RPO analytics and implementation at Korn Ferry.

The problem for leaders, however, is that younger workers are also hunkering down in their jobs, which is creating succession, promotion, and other issues. At 13.5%, last year’s voluntary-turnover rate among employees was almost half of what it was in 2022. Similarly, job-hopping has lost its luster, with one study showing Gen-Z workers envision staying in one job for seven years or longer—more than double the 3.5-year average cited by workers overall. Elise Schroeter, global head of organization and talent strategies for the Board and CEO Services practice at Korn Ferry, draws a parallel to the Great Recession of 2008, when older workers couldn’t afford to retire as they’d planned. As a result of the logjam, there were lower wages and fewer promotions and job openings. “Everyone is staying in place as they figure out what the economic horizon looks like,” she says.

It's a dilemma for leaders, who value the experience of older workers, but also need to keep pipelines open for rising talent. Indeed, as firms look to use AI to cut costs and improve productivity, leaders must figure out how to train and develop younger employees—while having fewer and fewer positions available to place them in, says Alison Harrigan, head of the Travel, Hospitality, and Leisure practice at Korn Ferry. She notes that younger employees rate training and development behind only compensation in terms of what they value from their employer. Those who feel their career progression is stalling can become disengaged and resentful, she says.

One solution might be for firms to creatively utilize the older workers who are staying put, says Maria Amato, leader of the Employer Value Proposition solution area at Korn Ferry. For instance, she notes, firms laid off layer upon layer of middle management, and they don’t have younger workers with the skills or experience to step up. “There’s a whole missing level of management that older workers can help prepare younger workers for,” she says. To be sure, studies have showed that Gen-Z workers want less responsibility and are happy not to advance beyond their current role.

Schroeter suggests other ways leaders can bridge the transition from older to younger workers, such as mentoring, job sharing, and consultant roles. “Retirement is becoming harder and harder for people to afford,” she says, “so leaders need to find ways to help them fulfill their goals.”

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