By Kathryn Kretschmer-Weyland
June 2, 2008

If, in the next 18 months, you feel the earth move, it might not be an earthquake. Rather, it might be a stampede — or, at least, the beginnings of one. Within the next two years, the first wave of baby boomers will become eligible for early retirement benefits from the Social Security system, and if they continue the trends of the past half-century, they’ll take it — even if today they don’t expect to. USCM has launched a national program to help you help your employees prepare for retirement, because we believe it is a growing problem that will only get worse.

What’s clear from research is that people often retire earlier than they originally said they would. The Employee Benefit Research Institute has found that the typical worker expects to retire at 65 or 66 but actually leaves the workforce when Social Security benefits become available at 62.

Comptroller General David Walker recently told Congress that this nation’s “culture of retirement” encourages people to stop working as early as possible. And once they claim retirement benefits, he said, they’re discouraged from continuing to work.

The Center points out that when those workers walk out the door for the last time, they’ll take with them years of experience, talent and expertise and leave fewer new workers available to take their place. Generation X is only three-fourths as large as the boomer generation it follows.

Most of the studies we’ve seen focus on the private sector, but the trends do not appear to be confined to it. A recent presentation at the Marketing Meeting of the National Association of State Procurement Officials makes clear that it expects state and local governments to do “more and more with less and less” as an “aging workforce (is) retiring and not being replaced.”

What is clear: There’s a change coming.

Dive into the details of these studies and a couple of undercurrents become clear:

1. You may be able to stem the negative effects of a retirement exodus through creative worker programs. The Center on Aging and Work suggests that something as simple as flexible hours can make a big difference; and

2. Whether they’re planning to or not, your older employees are likely to retire before they’re financially ready for it. You can help them get ready by not only offering a comprehensive retirement-planning education and investment program but also strongly encourage them to participate in it.

• Join with the other mayors and sign the pledge to help your employees save for retirement.

• Actively participate in the USCM Save for Retirement Campaign.

• Visit the website at usmayors.org, click on Save for Retirement.

• Check the site often for Best Practices, educational materials and much more.

The USCM deferred compensation program is provided by Nationwide Retirement Solutions. If you have questions about deferred compensation, contact Kathryn Kretschmer-Weyland at kweyland@usmayors.org or call 301-460-5251 or Louie Watson, Vice President – Strategic Relationships, Nationwide Retirement Solutions at 614-858895.

The USCM Save for Retirement Campaign is an ongoing effort of the Conference and Nationwide Retirement Solutions. This year the federal government declared October 19-25 National Save for Retirement Week.