Viewed through the prism of the current Social Security debate, the private triumph of Americans living longer and healthier lives looks like an economic disaster. That's because as people hit retirement age, we move them over to the liability side of the national ledger. We don't give much attention to the potential asset side -- to the talent and experience that are being prematurely shelved at great economic and personal cost. Instead of just arguing over the costs of caring for an exploding number of baby boomers, we should be thinking about how to keep older workers on the job longer.
A few critical policy changes could turn the tide, easing pressure on the Social Security system and reaping a historic experience dividend that would benefit present and future generations. For starters, Congress and the president should:
Remove disincentives for continued work. Existing federal policies discourage employers from keeping older adults on their payrolls and employees from sticking with their jobs. For example, current laws prohibit most employers from giving part-time pensions to older people who choose to downshift to part-time jobs. To collect any pension, employees have to stop work entirely, which means they stop paying into Social Security.
Current regulations require employers with health insurance plans to cover older employees under their private plans, even if the employees qualify for Medicare. That's a big dollar disincentive for employers who want to keep older workers.
What's more, Social Security and tax rules often combine to make it hard to justify continued work. Those who continue working beyond normal retirement age continue to pay into the Social Security system. When they do eventually retire, they don't get proportionally more in Social Security benefits. There's little financial incentive to keep paying in at a time when they could start collecting.
Develop an education policy for people over 50. Many older adults would be willing to work beyond retirement age if they could pursue a new career direction. They have the time to make it worthwhile; what they don't have is the education or training required.
Congress is moving backward in this arena. Legislators recently dropped federal requirements that certain job training programs include funds specifically for older workers. The federal government needs to do more here, not less.
Create incentives for work in areas of labor shortage. A set of flexible incentives could attract older people to fill workforce gaps in education, homeland security, health care and nonprofit organizations.
For instance, for many older adults, health costs are the single biggest expense. How about providing fully or partially paid health care for older adults who continue to work in vital jobs? Or making a certain amount of income tax-free for older adults working in the nonprofit sector?
(Congress should also pass education benefits, such as President Bush's proposed Silver Scholarships, which would give older adults who tutor kids for 500 hours a $1,000 scholarship they could pass to a family member or a student they've helped. Even a small cash benefit -- as little as $150 per month -- has proved to be a strong incentive to serve.)
Forty years ago, in the midst of the battles over Medicare, social reformer and then-Secretary of Health, Education and Welfare John W. Gardner said, "We are all faced with a series of great opportunities -- brilliantly disguised as insoluble problems." The Social Security debate, however complex and divisive, provides an opportunity to think about how to make the most of our extended life spans. We can encourage people to work longer and contribute more to society at a time in their lives when they still have much to give. Yes, it costs more to live longer, but with careful nurturing, it can pay, too.
By John Gomperts, CEO of Experience Corps, a national service program that engages Americans over 55 as tutors and mentors in urban elementary schools.