Ageless ambitions in an ageing world: Reimagining work for later life 

On average, our lives will be ten years longer than our parents and twenty years longer than our grandparents.¹ In 1920, 1 in 20 Americans were over the age of 65; today, that figure is 1 in 6.² 

But a longer life doesn’t guarantee a healthy one: Healthy life expectancy is approximately 65.5 years for Americans. And longevity also has implications for an individual’s finances, with many outliving their savings and 1 in 5 Americans aged 50+ having no retirement funds at all.³

Businesses are seeing these shifts play out in real-time within their workforce. According to our Global Workforce Longevity Practices Survey, one-third of employers do not believe their employees are prepared for financial shocks. Clearly, there is work to be done to support older workers; 80% of executives believe leadership could be doing more to address the potential risks associated with the aging workforce.⁴

So how can businesses reimagine work to empower employees in later life?

The principles outlined in the Longevity Economy Principles report, a collaboration between the World Economic Forum and Mercer, offer a framework for how governments and employers can create a financially resilient future.

The Six Longevity Economy Principles:

1.  Ensure financial resilience across key life events

2.  Provide universal access to impartial financial education

3.  Prioritize healthy aging as foundational for the longevity economy

4.  Evolve jobs and lifelong skill-building for a multigenerational workforce

5.  Design systems and environments for social connection and puropse

6.  Intentionally address longevity inequalities

Enable longer careers with up/reskilling

Many employers are upping their game to better support their workforces as they age. But while 82% brand themselves as supporting all life stages as part of their Employee Value Proposition, only half provide career & skill development for older workers.⁵ There is a clear unmet need, as mid-career and older workers call out for training opportunities. This need will grow in the coming years, with the US Bureau of Labor Statistics estimating that approximately a quarter of the US workforce will be aged 55 or older by 2033.⁶

Opening up career pathways for older workers starts with understanding the distribution of skills in your organization. First, identify sunset skills (those that are slowing in demand), sunrise skills (emerging skills set to rise in demand), and evergreen skills (those that have always and will always be important). Based on this skills data, learning and development plans can then be incorporated into strategic workforce planning with the impact of longevity in mind. To potentially unlock new career opportunities for older workers, invest in them: Develop their sunrise skills, or make connections with ‘adjacent’ skills to enable employees to transition into new roles based on business needs.

The longevity economy is also an opportunity to reassess the work itself. For instance, some roles may require a degree of physicality that employers need to carefully manage as workers age. Considering work design in the context of the longevity economy is about enabling people to continue working in a safe and sustainable way. This may include ergonomic considerations to minimize the potential for injury, which may force people into early retirement if left unaddressed.

Secure talent strategies with workforce planning

The aging population will impact employers across industries, but those that have a larger proportion of employees with longer tenure will feel the biggest impact. Without careful preparation, those organizations with a higher average employee age may face a talent cliff as a high proportion of their workforce will retire within a similar timeframe.

With the workforce becoming less stable, companies must create a built-in coping mechanism to attract and retain the future workforce, especially given the labor market is set to become tighter. In a time when many businesses are challenged to do more with less, rigorous strategic workforce planning may help them navigate changing demographic tides.  

An effective strategy starts with data to understand the workforce and the economy it operates in. This includes: analyzing organizational churn to understand the proportion of workers leaving via retirement, layoffs, or natural turnover; how people enter the business, and who stays. Contextualizing this data within the external labor market is key as these trends continue to evolve.

Embed flexibility in the transition to retirement

Increasing workplace flexibility in later life, whether through phased retirement or other means, opens up doors for employees and can act as an incentive to stay even as they reduce their working hours over a given timeframe.

Some employers are doing just this, as well as offering work redesign or improved rewards to maintain vital skills and aid knowledge transfer over the transitionary period. A phased retirement program is a win-win; employers maintain vital skills and knowledge, while workers can keep contributing to their retirement plans. But it is far from the norm, with only 32% of employers currently offering such a program.⁷

Location-based flexibility is also highly valued by older workers. According to our 2024 Inside Employees’ Minds US study, 38% of workers aged 55+ would prefer to work remotely, yet this is a reality for only 23% of them. Almost half (46%) of older workers want a hybrid model, but only a quarter have this flexibility currently. While location-based flexibility could help to retain older workers for longer, from a health perspective, employers need to also factor in how working from home may impact physical and mental health. Whether it’s a structured routine that encourages regular connections with colleagues or promoting regular breaks for exercise, there are simple ways employers can meet the needs of the aging population while protecting their physical health and well-being.

Address age bias and inequalities

Despite a growing commitment to supporting all life stages, 4 in 10 employers do not incorporate age into their inclusion initiatives.⁸ But ageism persists: 76% of employees globally have witnessed age discrimination at work, according to our 2024-2025 Global Talent Trends Study. Change is urgently needed.

By recognizing age as a protected category, employers can foster an age-inclusive work environment. To effectively combat age discrimination, it is essential for employers to leverage their data to identify potential biases. For instance, examining pay equity is vital; older workers often face disparities in compensation, as organizations may offer new hires higher salaries, leading to what is known as the "loyalty penalty" for tenured employees. In part, this practice may be potential evidence of the misconception that age correlates with declining performance. However, research indicates that tenure can potentially enhance an employee's value to the organization.⁹ By actively working to dismantle age-related bias, employers can create a more equitable workplace.

Protect workers from financial vulnerability

Financial worries have a ripple effect on an employee’s health and well-being, and ultimately your bottom line. Approximately 60% of full-time employees report being stressed about their finances, impacting their work performance.⁷ And over half of Americans aged 50+ worry they will not have enough money to last in retirement.¹⁰ This issue is likely to grow in light of the longevity economy.  

 While the focus on workers nearing retirement is understandable, improving financial resilience across all life stages requires a holistic approach. After all, finances are the top concern keeping employees of all ages up at night.¹¹ Employer support may compass initiatives such as emergency savings programs and student loan debt support. This helps employees to manage short-term financial needs without sacrificing their retirement contributions (which would see them miss out on the potential benefits of compounding returns).

Promote healthy aging while optimizing costs

Employers increasingly recognize the costs that financial stress places on their companies in terms of productivity losses, absenteeism and low morale. Financial distress generally leads to higher medical claims, while financial wellness programs contribute to reduced medical claims. A targeted financial well-being strategy may support financial wellness and close equity gaps. This reiterates the importance of viewing health and well-being holistically, and understanding the interconnections between physical, mental and financial well-being, as well as social, digital and work well-being, to name a few.

Yet claim costs are rising and benefits cash flow is limited: 7 in 10 companies report concerns about rising health insurance costs for older employees in particular.¹² Therefore, determining what employees value the most is important when developing a benefits strategy. Focusing on high-value care is one action that can help both employers and employees reduce medical spend through the use of high-quality, low-cost providers.

Interested in gaining additional insights tailored to your organization? Talk to a Mercer representative.

Authors/contributors:

Vikki Walton, Sr. Principal, Health Equity Leader
Will Self, Partner, Workforce Strategy & Analytics Leader
Holly Verdeyen, Partner, US DC Leader
Yvonne Sonsino, Total Well-being and Longevity Lead
Lin Shi, Project Fellow, Longevity Economy, World Economic Forum

_{¹World Economic Forum, 2024}

_{²Source: US Census Bureau. (2023, May 25). U.S. older population grew from 2010 to 2020 at fastest rate since 1880 to 1890. Census.gov.}

_{³Source: New AARP survey: 1 in 5 Americans ages 50+ have no retirement savings and over half worry they will not have enough to last in retirement. (n.d.). MediaRoom.}

_{⁴Mercer’s 2025 Executive Outlook Study}

_{⁵Mercer Global Workforce Longevity Practices Survey}

_{⁶Source: Civilian labor force, by age, sex, race, and ethnicity. (2024, August 29). Bureau of Labor Statistics.}

_{⁷2024-2025 Global Talent Trends Study}

_{⁸Mercer Global Workforce Longevity Practices Survey}

_{⁹ Source: Guzzo, R. A., Nalbantian, H. R., & Anderson, N. L. (2023, January 24). Don’t underestimate the value of employee tenure. Harvard Business Review. https://hbr.org/2023/01/dont-underestimate-the-value-of-employee-tenure}

_{¹⁰Source: In collaboration with Mercer - Longevity Economy Principles: The Foundation for a Financially Resilient Future. (2024, January 15). World Economic Forum. https://www.weforum.org/publications/longevity-economy-principles-the-foundation-for-a-financially-resilient-future/}

_{¹¹Mercer’s Inside Employees’ Minds US Survey}

_{¹²Mercer's National Survey of Employer-Sponsored Health Plans}