An acquaintance of mine was telling me she has an employee on her payroll who is just about to celebrate her 80th birthday. These days, I guess that’s not so unusual. Longer, healthier lives and economic forces are prompting more people to stay in paid employment much later than they used to.

Paradoxically, another business person I know is looking at early retirement as a way of trimming his workforce and has discovered a whole set of issues he hadn’t thought about that are likely to influence how to go about this.

THE key point is that you can’t force people to leave on the basis of their age. That would be categorized as discrimination. Any program has to be voluntary so anyone going down this route likely would need to offer a financial incentive. Unfortunately, you might then find that the very people you least want to lose will volunteer. And if you try to veto these, you might again be accused of discrimination!

The second set of problems relate to social security, taxation and retirement plans, like IRAs, 401Ks and annuities. You will need to provide professional advice to retiring employees on their options. Experts reckon a person needs to be able to maintain an income of at least two thirds their pre-retirement level for up to 40 years. Also there are potential tax penalties for anyone making withdrawals from retirement plans before the age of 59-1/2.

There could also be the question of continuing health insurance coverage, and a responsible employer might additionally offer counseling on the emotional and occupational elements arising from loss of the work role.

All-in-all, these and more considerations seem to militate against an early retirement program per se, though it’s a different matter if one of your people independently decides to quit early, though, again you should be prepared to offer them professional guidance.

There’s a lengthy and very helpful online guide to early retirement on the BNET interactive business network that provides further insights into this issue at http://tinyurl.com/bnet-guide.

Incidentally, if you’re in that other situation of having one or more employees considerably above normal retirement age, there’s another set of issues potentially relating to mobility, vulnerability and training. Without wishing to generalize, in the main you must give additional consideration to their needs – for example during an emergency evacuation – and the physical tasks they’re required to perform. Eyesight, hearing, physical strength, reflexes and mental sharpness are all human elements that deteriorate with age.

My own research suggest this is not an area that’s been given much attention outside of academia. But it’s something that’s likely to become more common – probably more so than early retirement. With some exceptions, you can’t force any employee to retire at a specific age (though you can discharge them for inability to perform). Thinking now about the likely issues as your workforce ages likely will pay off in the future.

An acquaintance of mine was telling me she has an employee on her payroll who is just about to celebrate her 80th birthday. These days, I guess that’s not so unusual. Longer, healthier lives and economic forces are prompting more people to stay in paid employment much later than they used to.

Paradoxically, another business person I know is looking at early retirement as a way of trimming his workforce and has discovered a whole set of issues he hadn’t thought about that are likely to influence how to go about this.

The key point is that you can’t force people to leave on the basis of their age. That would be categorized as discrimination. Any program has to be voluntary so anyone going down this route likely would need to offer a financial incentive. Unfortunately, you might then find that the very people you least want to lose will volunteer. And if you try to veto these, you might again be accused of discrimination!