Updating Employee Benefits to Support Flexible Work for Older Americans

By: Mathew Greenwald | June 4, 2026

For more than three decades, the Retirement Confidence Survey has shown that a significant share of retirees would like to work in retirement. Recent Census Bureau findings and other surveys confirm that periods of high inflation increase this preference. Most retirees have sources of retirement income that are fixed. So, when prices rise, purchasing power is eroded. And retirees often struggle to keep up. Many look to “unretire” to regain financial stability.

The RAND American Working Conditions Survey, a 2023 AARP study, among other studies show older workers overwhelmingly prefer flexible work arrangements. They don’t want a return to the traditional 9‑to‑5 schedule, but more control over when, where, and how they work.

Our Benefit System Was Built for Full‑Time, Career Employment 

Today’s employee‑benefit rules were designed decades ago anticipating full-time, career employment. They were structured to meet eligibility, vesting and non-discrimination rules. Meeting those requirements often results in a benefit structure that is inflexible, precluding adjustments that would tailor benefits to the needs of flex workers, even when the employer and the worker both prefer it.

This mismatch discourages employers from offering flexible and temporary (months to a few years) roles that would leverage the expertise of older workers. As a result, most of today’s job postings still call for indefinite full-time employment, discouraging older adults who prefer flexible and time-bound employment from applying, and all but ensuring those who do apply will not be seriously considered. There simply are no positions that match the needs and desires of older adults, which could be considered a form of ageism.

With inflation still elevated and millions of retirees seeking supplemental income, this is a an opportunity for employers to gain a competitive advantage.

Expanding Flexible Work Can Lower Employment Costs 

There is a straightforward solution that could be effective: remove various statutory, regulatory, and sub-regulatory barriers that were originally designed to combat age discrimination but today serve to limit older adult employment. Clarifying requirements for flexible work may lower taxpayer costs for entitlements and reduce employment litigation risks, while also maintaining all age discrimination protections.

Several new regulations and legislation could make a difference, including:

• Part-time benefit package: Allow employers to create and maintain a distinct benefits package for workers scheduled to work less than 30 hours per week. Update existing tax code and other statutory requirements to separately apply eligibility, vesting, non-discrimination, and other rules – a variant of class-based rules comparable to represented employees.
• Greater employee control over benefit allocation: Permit those who voluntarily participate in flex work to decide how their benefits are allocated among available options. Beyond cafeteria plans, envisioned are features comparable to a current legislative proposal – The Optimizing Participant Tax Incentives Through Optional Noncash Selections (OPTIONS) Act.

• An age‑discrimination safe harbor for voluntary flex workers: Create a narrowly tailored safe harbor that employers can adopt when offering voluntary flex work programs, reducing legal uncertainty while preserving core age‑discrimination protections. This would be patterned based on the safe harbor added by the Older Workers Benefit Protection Act of 1990.

The Impact 

Older workers entering flex roles usually have different financial and personal needs when compared to indefinite, full‑time career employees. Allowing employers and workers to fashion employment and benefits to reflect those different preferences and needs would make flex work more rewarding without increasing employer costs.

Additionally, some employers hesitate to hire older flex workers because they fear legal exposure should separation become necessary. A second, carefully crafted safe harbor, patterned after the “same actor” rule (where hiring and terminating entities are the same) would reduce that concern and expand opportunities for older workers without weakening essential anti‑discrimination protections.

A Win‑Win for Workers and Employers 

Expanding flexible work options would strengthen retirement security, help employers fill critical labor shortages, and keep experienced talent engaged in the workforce. Updating employment and benefit rules to support flex work is a practical step that might benefit millions of older Americans and the companies that can utilize their skills and achieve a competitive advantage.