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Introduction to the Book

70: the New 50®

As a large percentage of its workforce nears retirement age, American business now has an opportunity to both save billions of dollars by effectively managing baby boomer retirements and, at the same time, offer many older boomers what they want in terms of a happy and fulfilled life in their 60s and 70s. This book tells how.

The oldest of the 76 million people who make up the baby boomer generation are reaching ages where retirement is an option. In many companies 50 percent of managers and key professionals will be eligible to retire by 2010, and 70 percent by 2015. If these and other members of the boomer generation choose to leave the workforce en masse over the next few years, organizations will be facing a severe loss of key leadership knowledge, skills, and contacts. Talent is already scarce for many organizations, and the imminent boomer exodus will make it even more so. Companies will not be able to rely on the next generation to pick up the slack—the Generation X cohort following the baby boomers is one-quarter smaller and not nearly as experienced. With suitable replacements sparse, many open jobs will go unfilled for long periods or be outsourced. Recruiting and training costs will rise sharply because finding experienced candidates will be more difficult, and many new hires will require considerable time to ramp up and become productive. 

Little known to most people is that, concurrent with the potential boomer retirements, three other scenarios are unfolding that will have a powerful impact on American businesses in the near term:

  1. In terms of life expectancy and health, baby boomers at 70 will be like their parents and grandparents were in their 50s.
  2. Full retirement is not in the cards for most baby boomers. 
  3. Many boomers will be able to collect pensions and still work for their career companies, which will provide an end-of-career bonus for those who stay on the job.

Let's take a closer look at each of these scenarios:

  1. In terms of life expectancy and health, baby boomers at 70 will be like their parents and grandparents were in their 50s.

    The projected life expectancy of a baby boomer who is 60 years old is 83.1 For a married couple at 65, there is a greater than 50 percent chance that one spouse will live to be 90 or older.2 Medical research consistently predicts that 75 to 80 percent of baby boomers will be healthy enough to continue working well into their 70s due to better health care and less physically demanding work.3 Of course, boomers will experience the usual problems associated with aging: reduced strength and endurance, slower reflexes, and a decline in sensory functions. But they should be in substantially better physical shape than their parents were at the same age because they likely have taken better care of themselves. For example, research by the Ipsos MORI Social Research Institute (a large U.K. survey research organization) found that people in their 70s today are as active in sports and other outdoor activities as were people in their 50s, 30 years ago.4

    And that's not all. For the last several decades, businesses have modified their work environments to become more physically accessible by replacing or supplementing stairs with walkways or ramps, improving lighting, and installing doors that open automatically. Also, today's computers and modern communication technologies afford older employees the opportunity to do some or all of their work from home. In addition, modern medicine has enabled older people to restore their bodies with new hips and knees and by medical treatments that keep arthritis and other ailments under control.
  2. Full retirement is not in the cards for most baby boomers.

    Forty-three percent of baby boomers don't have sufficient savings or pension income to retire at anything approaching the lifestyle they would like.5 For almost all boomers, retirement income will be less secure as more organizations switch from defined benefit pension plans to 401(k) and other defined contribution plans. Even people with a seemingly secure retirement income will be asking themselves, "What if my company goes bankrupt and dumps my defined benefit plan onto the federal government, where the payouts won't be as much as I have planned for?" Many baby boomers will seek additional security simply by working longer. 

    The fear of rising health care costs and of the possible cancellation or downscaling of retirement health care plans will force many older boomers to work longer to maintain and save money for health care coverage for their retirement.

    In addition to financial and health care issues, many individuals will miss the challenge and camaraderie of the work environment.6 Between 60 and 80 percent of baby boomers say they plan to continue to work into their 60s and 70s, in either a full- or part-time position, in their career organization or elsewhere.7
  3. Many boomers will be able to collect pensions and still work for their career companies. 

    Currently, less than 14 percent of people working past 65 do so in their career companies.8 This lack of employee retention has often been the result of defined benefit pension plans that have forced people to leave their career companies in order to collect their pension benefits. But things are changing. People over 65 now can collect their Social Security pensions while they continue to work in any job, including their current one. Those in organizations with defined contribution plans, such as 401(k) plans, often can start drawing cash when they reach 59½ while staying in their current job. Retirement-eligible people in organizations that have amended their company's defined benefit plans (an option available January 1, 2007, under provisions of the Pension Protection Act) are able to collect their pensions upon reaching age 62 while they continue to work with their career employers.

    People who collect their company's defined benefit pensions and Social Security benefits while they are still working will feel as if they've received a big pay increase, just in time to help them top off their personal retirement funds. This 2006 law will allow more people to accept part-time employment with their career organization because they will suffer no loss of total income as Social Security and/or their company pension will make up the difference. People's view of staying full-time or part-time with their career companies will change significantly.

Bottom Line: American businesses can survive and thrive during the deflation of the baby boomer bubble by retaining or rehiring select older individuals. 

Of those who want to continue working, 43 percent would like to continue at their career company if arrangements can be made.9 If boomers stay with their career company or return to it after formal retirement instead of giving up paid work altogether or taking a job with another organization, American businesses will reap many benefits. They will:

  • Gain time for succession management programs to grow backups with the skills, knowledge, and experience to successfully assume higher-level or key contributor positions. 
  • Retain key people with critical knowledge, contacts, and experience until those assets can be shared with others or documented.
  • Keep people in difficult-to-fill jobs, saving considerable capital by delaying recruitment, selection, on-boarding, and training costs.
  • Meet the needs of the growing number of people who either don't want to or can't afford to retire.

There also would be important benefits realized by the U.S. government in the form of substantially reduced deficits in Social Security and Medicare.

However, organizations will be faced with some tough tasks. They will need to:

  • Identify select older employees with unique skills, knowledge, and contacts, and then offer them special encouragement to either stay at or rejoin the organization.
  • Create positions and working conditions that will be attractive to older workers and tailored to their needs and abilities. This means creating transition-to-retirement jobs that will give older workers more flexibility, different challenges, and other similar incentives.
  • Foster a work environment that is conducive to the success, safety, and health of older workers.
  • Ensure that leaders have the skills to meet older workers' special needs and to understand their unique situations.
  • Deal with the under-performance of a small percentage of older workers who otherwise would have been allowed to coast to retirement under defined benefit plans. Because there soon will be no "normal retirement age," these older underachievers will have to be either remotivated or culled from the organization. Unquestionably, this will be quite difficult for most leaders and most organizations. 
  • Make themselves more attractive to older workers by providing benefits that will meet their special needs.

Organizations that can successfully manage baby boomer retirements in a cost-effective, legally acceptable way will wield a significant advantage over their competitors. The key to the success of these organizations will be Retirement Management®.

Retirement Management®

For years, organizations have been concerned about succession management (i.e., growing their own backups for positions) and retention management (i.e., concentrating on keeping key employees at all ages and levels from moving on to other organizations), but they haven't spent much effort on doing anything about retirement-age workers, particularly trying to get select older workers to stay on the job longer. Historically, most companies have felt this was a waste of time, given the strong economic incentive to leave provided by defined benefit plans.

Retirement Management is not about talking people out of retirement or starting their own business. It is about giving the large number of potential retirees who would like to continue contributing to their present organization's success the opportunity and the accommodations to do so. And, it's about organizations growing more successful through better utilization of their seasoned talent.

Admittedly, Retirement Management is a new concept; most organizations have never tried it. Because they've basked in a steady supply of replacement workers, they've often overlooked current and recently retired older workers as a valued resource. However, given the imminent demographic shifts, they no longer will have this luxury. 

Why Now?

In 2000 Development Dimensions International, Inc. (DDI), published Grow Your Own Leaders, a book that examined the projected impact of baby boomer retirements at senior management levels and implored organizations to take immediate action to prepare an in-house cadre of individuals (known as an Acceleration Pool®) to assume the soon-to-be-vacant executive positions. The availability of a "ready to go" Acceleration Pool would keep organizations from trolling for senior leadership talent in an increasingly tight and expensive job market.

While "grow your own" remains a solid strategy—at all levels and at all times—most organizations won't be ready in time to meet the boomer retirement years. They'll need more time for this strategy to take root. I feel that companies can acquire this time by retaining certain people beyond their normal retirement age and, in some situations, by either rehiring individuals who have retired or hiring older workers from the open market.

Research Basis for 70: The New 50

In addition to published research studies on issues related to older workers, 70: The New 50 is based on the following unique research done by DDI. 
(A description of this DDI research is presented at the end of this book.)

Chapter 7, which projects what baby boomers will be like as employees in their 60s and 70s, is based on a series of large-scale studies from a wide variety of U.S. organizations. In these studies DDI collected supervisor ratings of thousands of their direct reports and obtained test and questionnaire responses from more than 23,000 job incumbents and job applicants. 

Chapters 8, 9, and 10, which deal with leading and managing older individuals, are based on questionnaire responses from more than 100,000 individuals throughout the United States as well as on DDI's experience in providing leadership training to more than 8 million leaders.

Chapter 11, which examines selection issues, is based on research over a 37-year period involving thousands of organizations and DDI's experience in training more than 5 million supervisors, managers, and executives in interviewing and selection skills. 

In addition to this data, my associates at DDI and I interviewed more than 300 people over 60 about retirement and work issues, 20 managers with experience in leading older workers, and 50 HR managers with experience meeting the needs of older workers.10

A surprising finding of our interviews with executives and HR professionals was the reluctance of most organizations to go on the record about what they're doing for their older workers. They often were very proud of their efforts but reluctant to share their experiences in print. The Conference Board has experienced a similar reticence.11 I believe this anxiety stems from a fear that organizations might be breaking a law with their special efforts to help older employees work longer. Legal issues are discussed in several parts of this book. We were able to obtain data from more than 50 companies because most of the respondents were DDI clients, and we promised anonymity. 

Who Will Benefit from Reading This Book?

70: The New 50 particularly focuses on the retirement of executives, managers, supervisors, and key contributors such as big-ticket salespeople, engineers, and scientists; although research data is presented that makes a strong argument for hiring and retaining older, nonmanagement employees as well.

70: The New 50 is written for executives and professionals who don't want to sit back and do nothing when faced with a unique set of interrelated organizational challenges—people who want their organizations to manage retirements rather than just accept an ongoing drain of valuable talent, knowledge, and contacts as a fact of work life.

Why This Book Is U.S. Centric

When starting to write this book, I intended to take a worldwide view—because the issues discussed are truly global. However, I soon discovered enough differences among countries to make worldwide coverage impossible. I point out, though, that the basic solutions presented in 70: The New 50 are applicable around the world. Every industrialized country must face up to a wave of retirements that will coincide with a relatively small cohort from which to draw replacements. Some countries, like Japan, are ahead of the wave, and other countries, such as China, will experience the problem a little later; but, all will feel the impact eventually.

End Notes

  1. From “98—Expectation of Life and Expected Deaths by Race, Sex, and Age:  2002,” presented on The 2006 Statistical Abstract (The National Data Book) web site by the U.S. Census Bureau.  According to this table of data from 2002, a 60-year-old is expected to live 22 more years; a 65-year-old, 18.2 more years to reach 83.

  2. From Cracking the Consumer Retirement Code (p. 8), by McKinsey & Company, 2006, New York:  Author. 

  3. From “Old. Smart. Productive.” by Peter Coy, 2005, BusinessWeek, (3939), pp. 78–86.

  4. From “Britons Are Living Longer, but They Face an Unhealthy Old Age,” by Nicola Smith, 2006, The Sunday Times, p. News 5.

  5. From Retirements at Risk:  A New National Retirement Risk Index (p. 11), by the Center for Retirement Research at Boston College, 2006, Boston:  Author.  This statistic was also highlighted in a CNN online feature, available at:

  6. From The 2006 Merrill Lynch New Retirement Study:  A Perspective from Individuals and Employers (p. 5), by Merrill Lynch, 2006, New York:  Author.  This report is available online at:

  7. From Baby Boomers Envision Retirement II:  Survey of Baby Boomers’ Expectations for Retirement (p. 24), by the AARP (as prepared by Roper ASW), 2004, Washington, DC:  AARP.    See also Staying Ahead of the Curve:  The AARP Working in Retirement Study (p. 15), by S. Kathi Brown, 2003, Washington, DC

  8. From a Micro-Level Analysis of Recent Increases in Labor Force Participation Among Older Men (p. 33), by Kevin E. Cahill, Michael D. Giandrea, and Joseph F. Quinn, 2006, Washington, DC:  U.S. Bureau of Labor Statistics.  This report is available online at

  9. From Voices of Experience:  Mature Workers in the Future Workforce (p. 22), a research report by Deborah Parkinson, 2002, New York:  The Conference Board. 
    Also see “Phased Retirement:  A Retention Strategy Whose Time Has Come,” a 2004 article featured in the Watson Wyatt journal Insider, 14, p. 6.

  10. This research is included in a soon-to-be published manuscript, Age Effects on Competency-Based Job Performance, by Evan F. Sinar and William C. Byham of Development Dimensions International.

  11. From Managing the Mature Workforce:  Implications and Best Practices (p. 7), by Lynne Morton with Lorrie Foster and Jeri Sedlar, 2005, New York:  The Conference Board.  While many corporations agreed to speak to The Conference Board on the record for this study, the majority requested anonymity.  Many issues preclude corporations from having open dialogue with their employees about their retirement or future plans, including benefits, the Age Discrimination in Employment Act (ADEA), and the Employee Retirement Income Security Act (ERISA).  Both corporations and employees expressed a desire to have effective, legal ways to openly discuss future plans and work options, particularly when an employee’s decision would affect organizational plans.
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